Ugg parent company Deckers Brands hit another home run in the third quarter, proving that its efforts to diversify the brand’s product lineup beyond its signature shearling boots are paying off.
The Goleta, Calif.-based company — which also owns the Hoka One One, Koolaburra, Sanuk and Teva brands — reported record revenues of $873.8 million, up 7.8 percent over the prior year, blowing past Wall Street’s expectations of $827 million. Earnings per share were $6.68, beating the consensus estimate of $5.31.
The company also raised its full-year guidance for fiscal 2019, forecasting earnings per share of $7.85 to $7.95, up from a prior view of $6.65 to $6.85.
On a call with investors and analysts, Deckers CEO Dave Powers highlighted the growth in Ugg’s men’s business — which now accounts for 15 percent of the brand’s total sales — as well as the increasing popularity of women’s nonclassic styles.
The women’s shoe category, he said, nearly doubled in volume over the prior year, led by the Neutra sneaker and Fluff Yeah slipper. “Those are normally not big drivers in the business, but we saw those really kicking in in October and November through existing and new wholesale distribution, as well as online,” he said. The all-weather Adirondack boot also saw double-digit sales growth despite a price increase.
In men’s, the chukka-style Neumel boot drove gains with younger consumers, and the Tasman slipper more than doubled in volume versus the same period last year.
“This shift in the Ugg brand’s revenue composition demonstrates that we’re continuing to make progress in becoming less reliant on core classic styles, allowing us to showcase the breadth of what the brand can offer,” he said.
Ugg’s sales increased 3.6 percent to $761.0 million, compared with $734.7 million for the same period last year. This was bolstered by cold weather early in the season, along with strong full-price sell-through in both the wholesale and direct-to-consumer channels.
The Hoka One One brand was another highlight for the company, with net sales growing 79.2 percent to $56.9 million — a record quarter for the performance running brand — compared with $31.8 million for the same period last year.
Powers also noted that the company’s direct-to-consumer channels saw 1.9 million new consumers make purchases during the 2018 calendar year.
Deckers stock was up about 10 percent as of 2:45 p.m. on Friday.
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