Hoka Continues to Be Deckers’ Rising Star as COVID-19 Becomes a Boon to Sales

Hoka One One continues to power parent Deckers Brands.

Sales at the running shoe brand rose 37.1% to $109 million in the first quarter — as novice runners and elite athletes alike increasingly turned to the outdoors for leisure exercise amid lockdowns — making it the only banner in the Goleta, Calif.-based corporation’s roster to record an increase in sales for the three months ended June 3.

Today, Deckers announced a loss per share of 28 cents, compared with last year’s loss of 67 cents. Sales, on the other hand, improved 2.3% to $283.2 million. Market watchers had anticipated an adjusted loss of $1.11 per share and revenues of $257.84 million.

At Ugg, which continues to rake in the lion’s share of revenues at Deckers, sales fell 10% to $124.7 million. Revenues at Teva dipped 7.9% to $35.2 million, while those at Sanuk slid 29.2% to $13.2 million.

Although the company’s wholesale revenues dropped 27.1% to $143.3 million, its direct-to-consumer business saw a 74.2% gain to $139.8 million. Plus, its domestic sales advanced 10.2% to $184.3 million, even though international revenues sank 9.7% to $98.9 million.

“First-quarter performance was a testament to the resilience of our brands, the strength of our e-commerce platform and the hard work of our employees,” president and CEO Dave Powers said in a statement. “While we are encouraged by the positive start to fiscal year 2021, we expect further challenges related to the COVID-19 pandemic, depending on the duration and severity of economic effects.”

Over the past few months, many of the company’s stores around the world were temporarily shuttered to help flatten the outbreak’s curve. Roughly 20% of its locations were open for the entire 90-day period, while the average outpost, it said, was operational for about half of the quarter.

As of this week, about 90% of Deckers’ entire brick-and-mortar fleet has reopened to the public, albeit many with modified or limited operations, plus enhanced health and safety protocols. The retail group shared that it “anticipates potential risk of additional closures or limitations during peak periods,” given ongoing circumstances related to the pandemic.

At the end of the quarter, Deckers had a liquidity position of more than $1.1 billion dollars, which included $661.9 million in cash and equivalents, as well as $469.7 million available under its existing revolving credit facilities. It has paused share repurchase activity and opted against providing a full-year outlooks due to unpredictabilities surrounding the coronavirus health crisis.

“We continue to believe our powerful brands, advanced omnichannel capabilities and healthy balance sheet provide the foundation for our organization to weather this challenging environment and succeed over the long term.”

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