Deckers Brands, a fashion and footwear company based in Goleta, posted record-setting earnings for the quarter ended Dec. 31 and beat analysts’ expectations with ease behind the strength of its most recognizable brand, Ugg, and its latest rising star, Hoka One One.
Deckers reported a 14.8% increase in revenue compared to the same quarter a year earlier, at $1.07 billion in the third quarter of 2020-21, an all-time best for the company. Earnings per share were up to $8.99, a 26% gain from the same quarter a year earlier, another record figure.
Zacks Consensus Estimate projected Deckers to post earnings per share of $6.94, a 2% decrease from the same quarter a year prior, and revenue of $965 million.
Deckers released its earnings after the market closed on Feb. 4. Shares shot up about 2.5% in after-hours trading, to around $325, after closing the day at $316.88.
“Global demand for Hoka, domestic strengthening for Ugg and disciplined approach to strategic
investments and an incredible display of resiliency by our employees operationally led Decker’s to double-digit quarterly revenue and earnings growth in the midst of a pandemic,” CEO Dave Powers said during the company’s earnings call.
The Ugg boot and shoe brand produced net sales of $876.8 million in the third quarter, up 12.2% from the same quarter a year earler.
The Ugg consumer is also becoming younger, according to Powers. Ugg experienced a 44% increase in customers aged 18 to 34 years old in the U.S., which was the largest increase of any group and represented the largest percentage of total customers.
“Over the past four years, Ugg has established an impressive resume of collaborations that have helped rebuild the brand’s fashion credibility,” Powers said. “As Ugg continues to expand its audience with younger consumers, it has been critical to enhance the brand’s e-commerce engine and digital marketing expertise.”
The running shoe brand Hoka One One had another strong performance, posting revenue growth of 52.1% from a year earlier with sales of $141.6 million.
Powers said he expects the brand to reach the $500 million full-year threshold when the company reports its fourth quarter earnings in May.
“We are still in the very infancy of Hoka apparel, but it’s promising to see such a positive response so early in the development process,” Powers said.
Strong demand for the brands has been attributed partly to people wanting more comfortable footwear since many are working from home.
However, Powers said he is confident that new consumers are falling in love with the brand. Deckers said it has added 2 million new consumers during this fiscal year.
“I think the long-term value of those consumers gives us real competence that if the slipper trend does start to wane or the tailwind from COVID and work from home slows down a little bit, we have new consumers that have now fallen in love with the brand in a different way than our prior consumers,” Powers said.
Wholesale business at Deckers rose 6.2% to $557.9 million, while direct-to-consumer sales improved 25.7% to $519.9 million.
Domestic revenues increased 19.3% to $770.5 million and international business grew 4.8% to $307.2 million.
About 75% of the company’s brick-and-mortar stores were open during the third quarter, but that could change in the fourth quarter if conditions with the pandemic worsen, Deckers said.