Deckers Outdoor shares dash ahead on surging demand for Hoka shoes
(Reuters) – Deckers Outdoor (NYSE:DECK) shares jumped about 15% in premarket trading on Friday after the shoemaker raised its annual sales forecast and beat second-quarter expectations, on resilient demand.
Trendy and innovative brands such as Hoka, UGG, New Balance and Roger Federer-backed On are a hit among consumers, especially in the running category, and has eaten into the market share of giants such as Nike (NYSE:NKE).
Deckers reported a nearly 35% jump in Hoka sales in the second quarter, while the UGG brand rose 13%.
“DECK continues to deliver strong results in an uncertain macro operating environment, speaking to its strong market position with a healthy brand portfolio that can continue to drive growth longer-term,” Dana Telsey, analyst with Telsey Advisory Group said.
Hoka has been gaining shelf space at Dick’s Sporting Goods (NYSE:DKS) and Nordstrom (NYSE:JWN) as the retailers replenish their stock with consumer favorites.
“The company is executing well in driving brand heat and elevating global brand awareness and view higher marketing investments as an important strategic decision that should continue to support top line growth,” Joseph Civello, analyst with Truist Securities said.
Deckers expects annual sales to rise 12% to $4.8 billion, compared with previous forecast of 10% rise to $4.7 billion.
Its quarterly net sales of $1.31 billion beat expectations of $1.20 billion, while it posted adjusted profit of $1.59 per share, compared to estimates of $1.23.
Deckers’ forward price-to-earnings ratio for the next 12 months, a common benchmark for valuing stocks, was 25.95, compared with Nike’s 26.59 and On’s 43.62.
