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

Market IntelFriday, Oct 25, 2024 8:10 am ET

1min read

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.

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