Demand for Hoka and Ugg drives Deckers' growth
“The strength of demand for our Hoka and Ugg brands continued to drive exceptional performance, producing record revenue and earnings for Deckers in both the second quarter and first half of fiscal year 2024”, commented Dave Powers, President, and Chief Executive Officer. "Our team’s ability to deliver compelling products that create emotional connections with consumers through engaging marketing campaigns differentiates our brands in a competitive marketplace. This, paired with our strategic approach to marketplace management, led by our DTC channel, remains paramount to the success of our brands and Company”, he explained.
Second Quarter Results
In the second quarter of fiscal 2024, which ended on the 30th of September, the Californian-based company recorded a net sales increase of 25.7%, as compared to the same period of in the last fiscal year, reaching 1.09 billion US dollars; on a constant currency basis, net sales rose by 24.2% year-over-year.
Deckers’ direct-to-consumer channel saw its net sales grow by 38.8% in this second quarter, totalling 331.7 million US dollars, and wholesale net sales amounted to 760.2 million US dollars, up by 19.4%, on a comparable basis to the same quarter of fiscal 2023.
At home, the company’s net sales reached 748.0 million US dollars in the three months to the end of September, growing by 21.1%, and internationally, there was a 33.3% growth in this period to 343.9 million US dollars, as compared to the same period of the previous fiscal year.
In the second quarter of the current fiscal year, the company’s gross margin widened to 53.4% from 48.2% in a similar period of fiscal 2023. In addition, Deckers posted diluted earnings per share of 6.82 US dollars in this period, which reflects an increase of 79% from 3.80 US dollars in the second quarter of last fiscal year.
Brands Summary
Ugg recorded a net sales increase of 28.1% to 610.5 million US dollars and Hoka’s net sales rose by 27.3% to 424.0 million US dollars, on a comparable basis to the second quarter of the previous year. Other brands, primarily composed of Koolaburra, also registered a slight net sales increase in this period, respectively, of 7.2% year-over-year, totalling 28.5 million US dollars.
Meanwhile, in this second quarter, Teva brand’s net sales amounted to 21.5 million US dollars, decreasing by 28.4%, and Sanuk brand’s net sales declined by 28.5% to 5.4 million US dollars, as compared to a similar period of fiscal 2023.
At the same time as releasing its second quarter results, Deckers took the opportunity to announce its intention to sell the Sanuk brand. “Consumers have long valued Sanuk for its fun, innovative, and comfort-first products, and the Company will be working to find the right owner to support the brand's next chapter”.
Full Year Outlook
The US-based company raised its guidance for fiscal 2024. It now expects net sales to reach approximately 4.03 billion US dollars and diluted earnings per share in the range of 22.90 US dollars to 23.25 US dollars.
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