Hoka brand footwear demand strong, Deck Outdoor (DECK.US) beats Q2 earnings, raises full-year sales guidance

Zhitong Finance learned that Deck Outdoor Co., Ltd. (DECK.US) exceeded expectations in the second quarter and raised its annual sales forecast due to strong demand. The Company's second-quarter profit grew 35% YoY to $240mn, or $1.59/share, topping analysts' EPS estimate of $1.24/share. Sales rose 20% YoY to $1.31bn, topping the consensus of $1.2bn. Shares rose over 14% before the market.

The Company expects net sales in fiscal 2025 to grow 12% YoY to $4.8bn (prev. guidance of $4.7bn), gross margin in the range of 55%-55.5%, and EPS in the range of $5.15-$5.25.

Its fashion innovation brands, including Hoka, UGG, New Balance, and Roger federer-supported On, are popular among consumers, especially in running products, eating into the market share of giants such as Nike (NKE.US). Deck reported that Hoka's sales grew nearly 35% in the second quarter, while UGG's sales grew 13%.

Dana Telsey, analyst at Telsey Advisory Group, said: "In an uncertain macro operating environment, Deck continues to deliver strong results, showing its strong market position and healthy brand portfolio can continue to drive long-term growth."

With Dick's Sporting Goods (DKS.US) and Nordstrom (JWN.US) replenishing consumer favorites, Hoka is taking up more shelf space at both retailers.

Joseph Civello, analyst at Truist Securities, said: "The Company has performed well in driving brand heat and enhancing global brand awareness, and has made a strategic decision to increase marketing investment, which will continue to support revenue growth."

Deck's forward 12-month P/E is 25.95x, Nike's is 26.59x, and On's is 43.62x.