Deckers Will Continue Investing in Hoka
Market momentum for the Hoka One One brand, whose global revenues rose 58 percent in FY20 to $353 million, is forecast to continue this fiscal year but at a slower rate. Senior executives at parent firm Deckers last week told analysts that Hoka’s projected sales increase for the fiscal year that began April 1 is likely to be lower than the “low 30 percent range” sales gain achieved by the brand during the first 45 days of the FY.
“We will continue to fuel the HOKA brand with digital marketing campaigns and virtual touchpoints to engage with consumers,” Dave Powers, president and CEO of Deckers, told analysts. “There’s little to no discounting on the brand. That’s because we managed inventory tightly…it’s selling through, the margins are high, and our partners are benefitting from that high average retail and margin.”
While specialty run retail has been crucial to HOKA’s trajectory, the brand could take a small hit if some of those businesses don’t continue post-COVID-19. Decker’s senior management is hopeful any lost business transfers online or to another account. HOKA recently opened Dick’s Sporting Goods after a test some three or four years ago.
As for some other Deckers’ brands, UGG sales increased 5 percent for a second consecutive year in FY20, helped by a more diversified product assortment, and Koolaburra global revenues jumped 58 percent last year to $70 million, bolstered by market share gains in the U.S. family value channel. Koolaburra, which is expanding into loungewear via a license this fall, is said to be well-positioned to grab demand from budget-conscious consumers.
As of last week, Deckers hadn’t experienced a large number of cancellations for any of its brands. Nonetheless, it’s taking a cautious approach in planning the back half of its FY21 business. Backlog at March 31 was up 4.6 percent year-over-year.
“I think what we’re finding is both Hoka and Ugg are proving to be really important brands for consumers right now,” Powers said. “Ugg [is resonating] on the work-from-home comfort lifestyle perspective… And then a lot of consumers are doing home workouts and trying to exercise more. And so that trend is also continuing to keep Hoka as a critical brand.”