Strong progress at Hoka One One leads sales gain at Deckers

By

Robin Driver

Published
Oct 25, 2019

Deckers Brands reported improved revenues and earnings for the second quarter on Thursday and upped its full-year financial outlook, as sales at its Hoka One One athletic footwear brand bounded forward 49.9%.

 
For the second quarter ended September 30, 2019, the Goleta, California-based apparel, accessories and footwear company’s total net sales were $542.2 million, an increase of 8.0% (9.5% in constant currencies) compared to the $501.9 million reported in the prior-year period.
 
Hoka One One’s sales totaled $78.1 million, up from $52.1 million in the previous year’s second quarter. Revenues also increased 2.2%, from $396.3 million to $404.9 million, at the company’s Ugg brand and 6.7%, from $21.5 million to $23.0 million, at Teva.

The news was, however, less positive at Deckers’ fourth largest brand, Sanuk, where sales dropped 22.4% to $10.7 million, down from $13.8 million in the same period in the previous year.
 
Globally, the company’s sales results were also something of a mixed bag, with a 14.9% increase in domestic revenues totaling $358.0 million being partially offset by a 3.2% decrease in international sales, which totaled $184.2 million.
 
Progress was a little more consistent when broken down by distribution channel, with the company’s wholesale and direct-to-consumer (DTC) channels posting sales increases of 8.7% and 5.1%, respectively. Wholesale revenues still account for the vast majority of Deckers’ sales, contributing $443.5 million in the quarter, while the DTC channel accounted for $98.7 million of the company total.
 
The group’s quarterly net earnings came to $77.8 million, or $2.71 per diluted share, compared to $74.4 million, or $2.48 per diluted share, in the prior-year period.
 
Taking the first quarter into account, Deckers’ net sales totaled $819.0 million in the first half of the year, up from $752.5 million, while net income was $58.5 million, up from $44.0 million.
 
“We continue to see positive momentum in the fiscal year," said Deckers President and CEO Dave Powers in a release. "As we move into the third quarter, the teams are intently focused on our key strategies and are committed to building excitement around new product offerings through planned targeted marketing investments that will be visible in the coming months.”
 
In line with its strong performance in the second quarter, Deckers has increased its full-year guidance and now expects to see net sales in the range of $2.115 billion to $2.140 billion, while diluted earnings per share are predicted to be between $8.90 and $9.05.
 
In the third quarter, net sales are expected to be in the range of $885 million to $900 million, with diluted earnings per share anticipated to total between $6.30 and $6.40.