Latest news with #Deckers'
Yahoo
5 days ago
- Business
- Yahoo
Deckers jumps as international demand for UGG, Hoka drives Q1 results beat
(Reuters) -Deckers Outdoor's shares surged 11% premarket on Friday after resilient demand for its sneakers and boots in international markets helped the Hoka parent beat first-quarter revenue and profit estimates. Strong demand for Hoka shoes and UGG boots in Europe and China helped shield Deckers from the impact of tariff-related concerns and sticky inflation on consumer spending in the United States, the company's largest market by revenue. "Coming off a spectacular fiscal 2025, Deckers faces uneven U.S. sportswear demand, higher tariffs on imports, and tough comparisons after strong Hoka wholesale sell-in last year. Yet, it is capitalizing on large international opportunities, and its brands remain popular," said Morningstar analyst David Swartz in a note. International market sales nearly doubled from last year, partly aided by the company opening its own stores in key markets. Shares of Roger Federer-backed On Holding also rose about 5% after Deckers' results. However, Deckers' U.S. sales growth for the quarter ended June slowed to 2.8% from about 11% reported last quarter, and the company refrained from providing full-year targets again, citing tariff-related uncertainty. Deckers sources most of its shoes from Vietnam, which has been hit with 20% tariffs by the U.S., which is expected to weigh on its margins in the second half of the year. The company's second-quarter sales target was largely in line with estimates, but its profit forecast was a tad below. Deckers' first-quarter results were strong, but the lack of visibility in fiscal 2026 and the increased tariff pressure remain a concern, said Telsey Advisory Group analyst Dana Telsey. German sportswear brand Puma said it now expects an annual loss as sales decline and U.S. tariffs dent profit, sending its shares 16% lower on Friday. Deckers' stock is trading at 16.13 times analysts' average estimate for the company's earnings for the next 12 months, compared with Nike's 34.85 and Puma's 18.86.
Business of Fashion
30-05-2025
- Business
- Business of Fashion
Why Hoka Is Slowing and On Keeps Growing
In the race to become the next sneaker giant, Hoka's pace is flagging while On shows no signs of slowing. The two European brands are regularly mentioned in the same breath as the challengers shaking up the running market and putting a scare in behemoths like Nike and Adidas. Hoka was born in the French Alps in 2009, On in the Swiss Alps in 2010. Both are known for their distinctive midsoles — an exaggerated, stacked platform in Hoka's case, and an array of tubular segments in On's — and just as importantly, for their runaway growth over the past several years. But recently, their paths have diverged. Last week, Hoka-owner Deckers Group reported that Hoka's sales increased just 10 percent in the quarter through March 31, with growth in its direct-to-consumer channels of 23 percent. Those numbers would be welcome to many companies, but they signalled a significant deceleration from Hoka's typical growth rates, sending Deckers' stock down more than 19 percent since, as investors wonder whether the brand is losing momentum and seeing performance more typical of a mature brand. On, meanwhile, reported 43 percent year-on-year growth in the same period, beating Wall Street's expectations. Sales in its DTC channels grew 45.3 percent. Hoka and On's growth rate diverged this earnings season. (Lei Takanashi /Business of Fashion) 'Overall, Hoka has had tremendous growth, but there is increasing competition, and the need to constantly update and innovate is required to continue to maintain the growth metrics,' said Dana Telsey, chief executive of Telsey Advisory Group, which downgraded Deckers' stock after its recent results. The question now is whether the slowdown is temporary. Deckers' leadership attributed Hoka's results to slower acquisition of new customers due to macroeconomic uncertainty; high levels of promotion for outgoing product models as the brand introduces new ones; and shoppers opting to move towards wholesale accounts to try on and buy new products, which hit its DTC sales. It expressed confidence that performance will pick up as it moves through these issues. Both Hoka and On, however, are looking for their route forward as they strive to maintain their growth, and they could see different levels of success in their strategies. For Hoka, a brand that built its customer base around performance-running, it's working to reach a new lifestyle consumer, evident through actions such as its first luxury collaboration with Marni this year. For On, which has long-established wholesale relationships with fashion and lifestyle retailers around its CloudTec sneakers, as well as an ongoing collaboration with Loewe, the brand is shifting gears to emphasise more innovative performance-focussed products, like its Cloudboom Strike sneakers made with LightSpray technology that podiumed the Kenyan distance runner Hellen Obiri at this year's Boston Marathon. The Hoka-Marni Bondi 3LS was released on April 4 in four colorways. (Hoka) Victor Diaz, founder of the fashion-forward specialty running retailer Renegade Running, believes both brands have achieved recent wins with their respective strategies. Diaz currently finds that the best middle and long-distance elite runners today are running for On rather than Adidas or Nike. And when it comes to high-heat lifestyle sneaker releases, he believes Hoka has quickly come up to speed with collaborations and can rival larger brands such as New Balance. But On's current streak of innovation around supershoes could leave Hoka in the dust. 'Hoka hasn't crossed that threshold yet. They're still struggling to find their racing shoe or their fast shoe,' said Diaz. Strengths and Weaknesses Diaz said that Hoka and On are both strong brands that customers continue gravitating towards for different reasons. When it comes to who's currently winning in regards to selling high-priced innovation, he finds that his 25 to 35-year-old customer base is paying up for On's premium supershoes, such as its $330 Cloudboom Strike LS sneakers or its $220 Cloudmonster Hyper. Hoka has lagged behind on innovation in his view, and while it continues to resonate with trail runners, it's still catching up to On in the lifestyle market. However, he feels both brands are losing grip of a middle-market they once dominated and allowing larger players to grab a hold, pointing to shoes such as Adidas' Adizero EVO SL and Asics' Novablast. 'There are shoes [by Asics, Nike and Adidas] that just feel more lively than anything that Hoka and On are doing in that middle-range, $140 to $160 price point,' said Diaz. Hoka is hoping to reassert its grip with recent updates to franchises like the Bondi 9 and Clifton 10, but its rollouts for these products haven't gone as smoothly as planned. The brand has only had limited colour assortments upon release, while discounted pairs of older styles have remained widely available through wholesale channels, eating away Hoka's DTC sales. On, meanwhile, has been able to mitigate any competitive challenges with a more diversified offering that includes products for tennis, hiking and training. These categories also open up more avenues for future growth. 'New categories build a broader positioning for the brand as it grows into a perceived white space in the premium segment of the market,' wrote William Blair consumer research analyst Dylan Carden in a recent research note. 'Power of the brand in turn opens new categories, where the company will follow a similar playbook, building performance credibility from which it can offer broader lifestyle products.' Setting a New Pace But analysts who are still bullish on Deckers believe Hoka's slower growth this quarter wasn't about cooling demand. UBS analyst Jay Sole, for instance, said in a recent note that he anticipates Hoka's growth will improve with more colours arriving for its best-selling franchises, old products being cleared out and other new product launches coming down the pipeline. 'I'm not really seeing the demand erosion,' said Sam Poser, a Williams Trading equity analyst. 'My guess is in their next quarter, we're going to see some kind of a flip where the domestic DTC business in the US inflects positively and is better than wholesale.' Hoka is also gaining ground outside of the US as it builds awareness globally. Deckers shared on its recent earnings call that Hoka's international sales now represent 34 percent of its total revenue, with chief financial officer Steven Fasching adding that 'internationally [Hoka] would outpace what we're seeing in the US.' Deckers' chief executive Stefano Caroti shared that Hoka was 'moving up brand rankings' with specialty partners in the UK, Germany and Italy, and that it was 'increasing its partner footprint in key cities' in China. The brand is approaching international growth in a meticulous and cautious way by focussing on sell-ins rather than sell-throughs, according to Poser. And even with brands like Nike and Adidas putting out new running styles that are clicking with shoppers, Hoka remains a well-known — and trusted — name in the running world. 'Very serious runners, because of the risk of injuries, like to stick to products they already know,' said Cole Townsend, founder of the running-fashion newsletter and online directory Running Supply. For that reason, many runners will still gravitate towards Hoka for daily trainers. On, meanwhile, still has work to do to win over legions of more serious runners, though Townsend does believe the brand is making inroads with professional runners. Granted that lifestyle is a segment On has a stronger footing in, analyst Telsey believes that Hoka's authenticity and connection to customers such as Townsend will move them to try new offerings from Hoka, in running and beyond. 'They're going through a period of transition a bit given the new product that's being introduced,' said Telsey.
Yahoo
28-05-2025
- Business
- Yahoo
Looming U.S. Tariffs Drove Swiss Watch Export Surge in April
PARIS – Watchmakers and retailers rushing to beat a looming, but moving, deadline for U.S. tariffs fueled timepiece exports in April. A total of 1.3 million watches with a value of 2.45 billion Swiss francs left the country during the month, an 18.2 percent increase year-on-year, according to figures published Tuesday by the Federation of the Swiss Watch Industry. More from WWD Tiptoeing Around Trump, Fashion Refines Trade War Rhetorical Style Is Deckers' Hot Streak Coming to An End? Hoka's U.S. Slowdown + Tariff Worries Weigh on Stock Trump Threatens 50% Tariffs on EU, Rattling Markets The U.S. alone took a 33 percent share of the market, with exports leaping 149 percent to 851.9 million Swiss francs. That is equivalent to a fifth of last year's full-year exports to the country. But the April boom does not signal the end of a turbulent period marked by shrinking markets across the board. 'The sharp rise in exports is more a reflection of a one-off response to an uncertain commercial situation than a genuine sign of a structural strengthening of demand,' the industry body said. 'Without the U.S., the month result would have been a decline [in value] of 6.4 percent, again penalized by China and Hong Kong,' territories that once occupied the top steps of the podium and have now sunk to fifth and sixth place respectively, it added. On April 2, the U.S. announced 31 percent tariffs for goods made in Switzerland, although negotiations are ongoing and exports are currently subject to the global 10 percent rate. Bar the American market, the rest of the world presented a mixed picture, similar to earlier months of 2025, with the U.K. and Japan showing slim, single-digit growth. Along with France, which rose nearly 5 percent, those were the only markets in the top 10 to grow in April. China and Hong Kong tumbled 30.5 and 22.8 percent respectively, while Singapore sank 9.2 percent. Results for April were 'consistent with the Swiss Watch Federation's previous downbeat outlook comment that global Swiss watch exports should decline again in 2025 given no imminent turnaround in Chinese demand,' said Thomas Chauvet, head of European equity research, luxury goods at Citi. By materials, it seems the American consumer has a taste for steel, precious metal and bimetallic watches. The federation pointed out that without the U.S., the total number of watches exported would have declined 5.7 percent, but did not specify the effect on value. As it stands, units exported to North America rose by 77 percent. The dominant steel watch category drove the increase in volume with an 18.9 percent leap, with bimetallic and precious metal pieces also seeing a sharp uptick, albeit on far smaller unit numbers as a base. In value, precious metal watches came first at 953 million Swiss francs and a 23.4 percent increase, followed by steel and bimetallic watches. U.S. demand may not be the only factor contributing to the growth in value. Bernstein's Luca Solca said that 'beyond the tariff pull-forward, export values also reflect the impact of high gold price inflation,' with the growth in gold-steel and precious metal pieces 'indicating double-digit [year-on-year] export price inflation.' The 'other materials' and 'other metals' categories did not benefit from increased shipments to the U.S., shrinking in value and volume by high-single or mid-teen percentages. The bell-shaped curve by price category continued, with the high end of the market of watches priced above 3,000 Swiss francs at export price growing 22.9 percent in value and almost 20 percent in volume, while entry-price pieces under 200 Swiss francs rose by a more modest 10.4 percent in value and 6.5 percent in number of units. Meanwhile, the middle segment was mainly flat in volume, while value contracted for the 200-to-500 Swiss francs category while growing 5 percent for the 500-to-3,000 range. 'The data suggests that Swiss exports to the US in the [200-to-500 Swiss francs] range are a negligible portion of total global exports to this price range, while the U.S. remains a key market for exports priced below 300 and above 3,000 [Swiss francs],' said Solca. 'We note that most smartwatches are priced in the 200 to 500 [Swiss francs] range.' Best of WWD Watch Industry Tastemakers on Their Top 10 Timepieces and What Makes a Collectible Zenith Releases Two Timepieces Blancpain Expands Air Command Range Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
26-05-2025
- Business
- Yahoo
BofA Cuts Deckers' (DECK) Price Target Amid HOKA Growth Concerns
On May 24, BofA Securities analyst Chris Nardone adjusted his price target for Deckers Outdoor Corporation (NYSE:DECK) from $154 to $128 while keeping a Neutral rating. Nardone voiced doubts about Deckers' HOKA brand's ability to spur growth in the cutthroat U.S. running market after sales slowed in the fourth quarter. HOKA's Clifton and Bondi shoe lines now come in a broader range of colors, which the analyst believes could increase sales. However, he is not convinced that the changes in these lines will speed up growth in a meaningful way, and he has projected a 13% growth for HOKA in Fiscal Year 2026. Furthermore, according to Nardone, Deckers' UGG brand may be able to outperform its growth algorithm with the help of pricing strategies and the significant order volumes generated by last year's successful holiday season. According to current trends, the availability of essential UGG products has improved, and the brand is expected to grow by 7% in Fiscal Year 2026, though the analyst warns that price changes may reduce consumer demand. While we acknowledge the potential of DECK to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than DECK and that has 100x upside potential, check out our report about the cheapest AI stock. Read More: and . Disclosure: None.
Yahoo
26-05-2025
- Business
- Yahoo
BofA Cuts Deckers' (DECK) Price Target Amid HOKA Growth Concerns
On May 24, BofA Securities analyst Chris Nardone adjusted his price target for Deckers Outdoor Corporation (NYSE:DECK) from $154 to $128 while keeping a Neutral rating. Nardone voiced doubts about Deckers' HOKA brand's ability to spur growth in the cutthroat U.S. running market after sales slowed in the fourth quarter. HOKA's Clifton and Bondi shoe lines now come in a broader range of colors, which the analyst believes could increase sales. However, he is not convinced that the changes in these lines will speed up growth in a meaningful way, and he has projected a 13% growth for HOKA in Fiscal Year 2026. Furthermore, according to Nardone, Deckers' UGG brand may be able to outperform its growth algorithm with the help of pricing strategies and the significant order volumes generated by last year's successful holiday season. According to current trends, the availability of essential UGG products has improved, and the brand is expected to grow by 7% in Fiscal Year 2026, though the analyst warns that price changes may reduce consumer demand. While we acknowledge the potential of DECK to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than DECK and that has 100x upside potential, check out our report about the cheapest AI stock. Read More: and . Disclosure: None. Sign in to access your portfolio
