Ugg boots and Hoka sneaker lovers helped parent company
Deckers Outdoor
post a strong second quarter, and analysts are optimistic the popularity of the brands is here to stay.
The shoe maker reported fiscal second-quarter earnings of $6.82 a share on revenue of $1.09 billion after the close on Thursday. Analysts surveyed by FactSet were expecting
Deckers
(ticker: DECK) to post earnings of $4.43 a share on revenue of $960.5 million.
“Deck put up what is likely to be the strongest beat this EPS season,” Wells Fargo analyst Ike Boruchow said in a research note. He raised his price target to $540 from $520 and maintained his Equal Weight rating on the stock.
The stock surged 16% Friday to $560.32 and was on pace for its largest percentage increase since March 2020, according to Dow Jones Market Data. Deckers has risen 40% this year.
The second-quarter beat was driven by strong consumer demand for Ugg and Hoka brands. Ugg sales increased 28% from the prior year to $610.5 million while Hoka sales jumped 27% to $42 million.
“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,” Chief Executive Dave Power said in a statement.
Seaport Research analyst Mitch Kummetz said in a research note Friday that when it comes to Ugg, the company “did a much better job capturing demand in [the second quarter] than a year ago.”
“This was driven by a better inventory position of the right product and an earlier marketing campaign that helped stimulate demand and conversion,” the analyst said.
Deckers also raised its fiscal 2024 revenue forecast to be about $4.03 billion, up from prior guidance of $3.98 billion. Fiscal 2024 earnings estimates of between $22.90 a share and $23.25 a share were also an increase from previous guidance of between $21.75 a share and $22.25 a share.
“The two big brands are performing extremely well, and they continue to manage Hoka’s normalizing growth extremely well,” Wedbush analyst Tom Nikic wrote in a research note Friday.
Nikic raised his price target on Deckers to $650 from $614, which implies a 32% upside from the stock’s closing price on Thursday. He also maintained his Outperform rating on the stock.
Write to Angela Palumbo at [email protected]
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