Earnings season is in full swing.
VF, Deckers, Skechers, Ralph Lauren and Capri Holdings all recently reported earnings results. In some cases, these companies posted record sales, despite ongoing headwinds from supply chain disruptions and inflation.
Overall, the results were strong, and companies raised their expectations for sales moving forward. Here were our top three takeaways from the reports this week:
Deckers Brands, Skechers USA Inc. and Columbia Sportswear all posted record-breaking results for their most recent quarters.
In the case of Deckers, which owns the Hoka One One, Ugg, Teva, Sanuk and Koolaburra brands — the company delivered its largest quarter in history for its fiscal Q3, with a revenue increase of 10.2% to $1.19 billion. In a statement, Deckers president and CEO Dave Powers called out Hoka and Ugg, calling them “two of the strongest brands in the footwear industry, which are complemented by our strong operating model and fortified balance sheet.”
Skechers also reported a new record for full-year sales in 2021, at $6.29 billion. And 2021 was also a record year of growth for Columbia Sportswear, which said net sales grew 25% year-over-year to a record $3.13 billion .
“This extraordinary financial performance demonstrates that our brand portfolio is resonating with consumers, and we are well positioned to benefit from consumer and outdoor trends,” said Columbia CEO and president Tim Boyle in a call with investors. “While I’m excited about our results, I’m even more optimistic about our ability to realize the tangible growth opportunities that we have ahead of us.”
Sneakers Are in Demand
Within Columbia, executives said they expect the Sorel brand to be the company’s fastest-growing brand in 2022.
“Sorel’s successful evolution to a year-round, function-first fashion footwear brand is evident in the breadth of popular non-insulated styles,” Boyle said, explaining how only 15% of Sorel’s North American sales in 2021 were for insulated winter boots. “The brand’s success in the hyper-competitive multibillion-dollar sneaker category speaks to Sorel’s brand heat and trend-setting designs.”
At Deckers, running brand Hoka saw net sales increase 30.3% in fiscal Q3 to $184.6 million, compared with $141.6 million for the same period last year. And Teva reported that its net sales increased 31.4% to $20.6 million, compared with $15.7 million for the same period last year.
And at Capri Holdings, Versace’s revenue rose 29% to $251 million in the third quarter, with the Trigreca and La Greca sneakers standing out. Versace also saw a positive response to the new men’s Greca Labyrinth trainer featuring a chunky Greca pattern sole. Meanwhile, Jimmy Choo’s revenue increased 47% to $178 million in the quarter with both casual and dress footwear performing well. Sneaker growth was strong for the luxury label, spurred by a positive consumer reaction to its new Memphis trainer.
“We are encouraged by the progress we are making toward our goal of growing revenue at Jimmy Choo to $1 billion over time,” Capri Holdings chairman and CEO John Idol said.
DTC is Still Important
Many companies mentioned their continued focus on direct-to-consumer channels.
At VF Corp., The North Face is gearing up to welcome a new global president this summer, Nicole Otto, a 16-year Nike veteran. In her new role, Otto will focus on leading a shift toward direct-to-consumer and digital channels, while maintaining a true omnichannel experience. Overall, the goal is to drive engagement, leverage consumer insights and build loyalty.
The North Face’s Explorer Pass loyalty program is already a major DTC asset to the brand, executives said in the earnings call last week. The program added 1.1 million new members in Q3, for a total of almost 9 million loyalty members, and reached 33% more sign-ups during holiday weeks compared with last year. These loyalty members are responsible for the majority of revenue in DTC channels, said VF CEO Steven Rendle in a call with investors on Friday.
Skechers also mentioned its push to DTC, which saw 30% growth in Q4. At the same time, the company is focusing on its wholesale business as well, which has benefitted from a larger industry trend to turn away from retail partnerships in favor of a robust direct-to-consumer model. As Nike, Crocs and other major brands exit wholesale partnerships, Skechers is picking up wins in these retail channels while maintaining DTC growth at the same time.