Deckers shares are up 2.5% in after hours trading after the company reported strong results for its first quarter of the fiscal year. And its Hoka brand was largely to thank for these results.
Revenue from Hoka, the running brand in the footwear conglomerate’s portfolio, accounted for more than 50% of Decker’s portfolio revenue in Q1, a new milestone for the brand. Hoka net sales increase 54.9% to $330 million. Deckers — which owns the Ugg and Teva brands as well — reported an overall net sales increase in Q1 of 21.8% to $614.5 million. Net income was $44.8 million and diluted earnings per share was $1.66.
The results marked a milestone for the Hoka brand, which achieved a one-billion dollar revenue milestone within the last 12 months. The running brand has seen a meteoric rise in the last few years, as more consumers take to running throughout the pandemic.
“The Hoka brand’s speed to achieve this feat is exciting, especially as the brand’s increasing penetration to our portfolio benefits Deckers’ overall quarterly financial and operational performance,” said Deckers president and CEO Dave Powers in a statement.
In June, Hoka revealed its first-ever global brand campaign, dubbed “Fly Human Fly,” along with new running shoe, the Mach 5. In May, president of performance lifestyle at Deckers Brands Wendy Yang stepped down from her role. She was responsible for several brands that rose to prominence under her watch, most notably Hoka and Teva. Stefano Caroti, Deckers’ president of omnichannel, has taken on the role on an interim basis.
Decker said 83% of visitors on the Fly Human Fly landing page on HOKA.com were new visitors, in line with the company’s goal to broaden the running brand’s reach to new consumers. Powers said he sees opportunity to expand into hiking, walking and lifestyle lanes. He also highlighted opportunities to reach consumers at wholesale channels such as Foot Locker.
“We’re starting to hear comments about people are trading their all white Nikes for all white Hokas, Powers said. “And so that’s very encouraging for us as well.”
Hoka also plans to expand its retail footprint to reach new consumers as well. The brand plans to open its first permanent retail store in New York City in the spring of 2023 and another pop-up in the city as well.
After Hoka, Ugg was the next top performing brand for Deckers in Q1, with net sales decreasing 2.4% to $207.9 million. Teva sales increased 2% to $59.6 million.
While Deckers noted that current macro-economic conditions could impact its business moving forward, the company reaffirmed its outlook for 2023. Net sales are expected to be between $3.45 billion and $3.50 billion. The company raised its outlook for diluted earnings per share and expects it to be in the range of $17.50 to $18.35.