Move Over Ugg — Hoka One One Is Driving Double-Digit Growth at Deckers

Deckers Brands today reported better-than-expected first-quarter results, thanks to steady — yet explosive — growth at Hoka One One and more stable advances at breadwinner label Ugg.

The Goleta, Calif.-based firm — also parent to Sanuk and Teva — said today that its revenues for the period ended June 30 rose 10.5% to $276.8 million, significantly besting the $259.7 million analysts had expected.

Ugg, having recently emerged from a period of unevenness around 2017, continued to bring in the lion’s share of revenues, eking out a gain of 1.5% to $138.5 million during the quarter. But it was the firm’s smaller performance running brand, Hoka One One, that showed the most impressive gains, posting sales growth of nearly 70% to $79.5 million, which continues a streak that has persisted for multiple quarters.

The France-born brand has been generating significant buzz in recent months, as a growing roster of celebrities and style influencers have been spotted out in its wares. (Pippa Middleton, Reese Witherspoon and Britney Spears are among the big names that Hoka counts as fans.)

Meanwhile, business remained challenged at sandal brand Sanuk, which saw sales tumble 23.5% to $18.7 million. Teva’s sales also continued to trend downward, decreasing 4.3% to $38.3 million.

Overall, Deckers managed to narrow its net losses, posting a loss of $19.6 million, or 67 cents per share, compared with $32.5 million, or $1, in the year-ago quarter. On an adjusted basis, its net losses were 98 cents per share — better than the $1.12 Wall Street anticipated.

“I am proud of the positive momentum that our portfolio of brands continues to build as we remain focused on the strategies that have proven successful in strengthening our operations over the past few years,” said president and CEO Dave Powers. “The Deckers team continues to drive excitement behind innovative product introductions and remains disciplined in delivering top-tier levels of profitability. With the first quarter now behind us, we are firmly committed to our strategies and remain confident in our abilities to deliver on them.”

The firm boosted its fiscal 2020 outlook and now expects net sales in the range of $2.1 billion to $2.125 billion and adjusted diluted EPS of around $8.40 to $8.60. It previously called for sales of $2.095 billion to $2.12 billion and adjusted EPS in the range of $8.20 to $8.40.

Although the company’s results topped forecasts and it upped its guidance — two factors that usually excite market watchers — it did not appear to pacify investors, who sent its shares tumbling in after-hours trading. As of 4:30 p.m. ET, Decker shares were in the red more than 3% to $172.

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