Deckers Brands’ shares were down less than 1% in after hours trading on Thursday after the company beat expectations for earnings and sales in the second quarter, with Ugg sales leading the momentum.
Overall, net sales at Deckers increased 21.3% to $875.6 million and diluted earnings per share were $3.80, both of which were ahead of expectations from analysts surveyed by Yahoo.
By brand, Ugg led the way in terms of sales, with $476.5 million in Q2, marking a growth of 6.3%. Hoka, which had $333 million in sales in Q2, saw the most growth out of any Deckers brand, with a 58.3% increase from last year. Teva net sales increased 4.3% to $30.1 million and Sanuk net sales decreased 25.2% to $7.5 million.
Deckers’ president and CEO Dave Powers said the company’s strong Q2 results came amid a “challenging macroeconomic backdrop.”
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“As we head into the Ugg brand’s peak selling season and continue to fuel expanding demand for Hoka performance footwear, we are confident in our ability to deliver our maintained full year guidance,” Powers said.
While Deckers noted that current macro-economic conditions could impact its business moving forward, the company reaffirmed its outlook for 2023. Net sales are expected to be between $3.45 billion and $3.50 billion. The company still expects diluted earnings per share to be in the range of $17.50 and $18.35.
The Hoka brand has been the star of Deckers’ growth story in the last few years — the brand achieved a one-billion dollar revenue milestone within the last 12 months. Hoka has seen a meteoric rise throughout the pandemic, as more consumers take to running and exercise.
The Ugg brand, which relies on later quarters for the bulk of its sales, has also been a growth driver for Deckers. According to an Oct. 14 note from Williams Trading analyst Sam Poser, Ugg sales were already off to a strong start in fall 2022.
“The strength of Hoka and Ugg is the result of brand first focus, compelling new product, and improving DTC/Omni-Channel consumer engagement and sales,” Poser wrote.
