On Nov. 29, Hoka will be honored with the Brand of the Year award at the 37th annual FN Achievement Awards. Below is an article from the magazine’s Nov. 27 print issue about why the hot running brand is doing so well.
Hoka’s winning streak is showing no signs of slowing down.
Since Deckers acquired the running brand in 2012, Hoka has continued to see skyrocketing growth. That success became even more pronounced in the pandemic. And for fiscal 2023, Hoka crossed the billion-dollar mark, with sales totaling $1.41 billion, up 58.5 percent from the prior year’s $891.6 million. In its most recent second quarter, Hoka posted net sales of $424 million, up 27.3 percent from the same period the previous year.
To Deckers Brands CEO Dave Powers, Hoka has the runway to grow into a “multibillion-dollar performance brand,” he told analysts in a call in October. To do that, Hoka will innovate within core performance categories and explore long-term opportunities in apparel, the exec told FN via email.
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“We believe Hoka can continue to excite its existing consumer base, while attracting new consumers with compelling product that creates emotional connections and experiences with our brand,” Powers said.
Here are five reasons Hoka has been so successful, according to analysts and brand leaders.
Rooted in purpose — and performance product
Stefano Caroti, chief commercial officer at Deckers, explained that Hoka’s popularity can be attributed to its original mantra from 2009.
“The Hoka brand was born with a purpose: to make running downhill easier and faster,” said Caroti, who also serves as interim president of Deckers’ performance lifestyle group (including Hoka). “That is really the fundamental reason for our success.” When it comes to specific product, Powers called out the Clifton, Bondi, Speedgoat and Mach as popular franchises, and noted that new performance products outside of the “typical run space” are winning over more consumers.
“The commitment to our performance foundation, while continuing to expand our share of closet through our hike, trail, lifestyle and apparel assortments is our winning recipe,” Powers said.
Crossover into lifestyle
Matt Powell, an advisor at Spurwink River and senior advisor at BCE Consulting, explained that while Hoka started out as a performance running brand, it eventually “tipped over into the lifestyle world, which is where the real sales volume is.”
In other words, Hoka’s commitment to performance and comfort has resonated with a broad base of consumers who might not necessarily be running a marathon, but want a comfy sneaker for work or travel.
To cater to this sector, Hoka has released some of its shoes in on-trend colors and materials, like suede. But even amid the fashion-forward updates, Caroti said Hoka’s roots in performance give the brand legitimacy in the lifestyle space.
“I firmly believe that if you’re not connected with something authentic and real, the lifestyle consumer will not take you seriously,” Caroti said. “The connection to performance is critical for us going forward in the lifestyle space.”
Keeping their attention
Hoka has generally managed to keep demand hot by avoiding flooding its products into the marketplace.
In a late October note to investors, Williams Trading analyst Sam Poser said that Hoka is playing the long game when it comes to growth and is not sacrificing brand sanctity for short-term gains.
“It will soon become clear that Hoka has the well-managed scarcity model, with innovative new product across categories, including road running, outdoor, trail running and recovery, which creates a strong brand that’s well positioned for longterm, profitable growth,” Poser wrote.
Omnichannel focus
In the first half of the year, Hoka’s direct to-consumer revenue increased 54 percent over the prior year, to represent 38 percent of total revenue. While the brand is mainly focused on growing its DTC channel, leaders also see wholesale as an important distribution channel.
“We want to lead with DTC,” Caroti said, “but this doesn’t mean DTC first at the expense of wholesale.”
As he explained, having a strong DTC arm allows Hoka to test and learn new concepts with its product and then bring those learnings to the wholesale channel.
When it comes to choosing wholesale partners, Powers said Hoka is “extremely discerning.”
“Hoka has continued to be one of the fastest-turning brands within the majority of its wholesale accounts, while staying aligned with Deckers’ aim to increase the proportion of direct-to-consumer business,” he said.
A strong team
Beyond product and distribution strategy, Powers said Hoka’s success is ultimately a testament to its stellar class of employees and leaders. As for its top leader, Hoka is still in the process of searching for its next brand president to take over from Caroti.
“We are proud to not only attract world class employees but to provide them a community they want to grow in,” Powers said. “None of our success today would be possible without our incredible team members — what you see today is a direct result of their ingenuity and passion, both for our consumers and for making the world a better place.”
For 37 years, the annual FN Achievement Awards — often called the “Shoe Oscars” — have celebrated the style stars, best brand stories, ardent philanthropists, emerging talents and industry veterans. The 2023 event is supported by sponsors Authentic Brands Group, Birdies, Caleres, Crocs, FDRA, Nordstrom, Saucony and Vibram.
