Deckers Brands, the parent of Ugg and other footwear brands, saw its net income progress by 5.0 percent to $77.8 million in its second fiscal quarter, ended on Sept. 30. Revenues rose by 8.0 percent to $542.2 million, or by 9.5 percent constant currencies, driven by gains at Ugg and Hoka One One. The group's gross margin improved by 0.2 percentage points to 50.4 percent.
Hoka was again the shining star in the quarter, with sales jumping by 49.9 percent to $78.1 million and with balanced growth across geographic areas and channels. The running shoe brand was number two in the U.S. run specialty market in August, according to NPD.
Meanwhile, Teva's sales increased 6.7 percent to $23 million, driven by the Universal and Hurricane franchises, while Sanuk was down by 22.4 percent to $10.7 million. Ugg's sales advanced by 2.2 percent to $404.9 million, led by the domestic business, but the brand did not perform as well in the EMEA region, where it has decided to be more selective (more on this brand in Shoe Intelligence).
Overall, Deckers' wholesale revenues grew by 8.7 percent to $443.5 million, while direct-to-consumer sales improved by 5.1 percent to $98.7 million, including a gain of 7.2 percent in comparable store sales.
U.S. sales benefited from the expansion of Ugg and Hoka, and soared by 14.9 percent to $358 million. However, the international business was hindered by Ugg's softness, particularly in Europe, and as a result, total international sales declined by 3.2 percent to $184.2 million, or by 0.5 percent in constant currencies.
The management has decided to raise its full-year outlook to reflect the acceleration it is seeing in the Hoka brand, while at the same time maintaining expectations for the Ugg brand heading into the peak selling season. For the current financial year, the company is now projecting sales of $2,115 million and $2,140 million, instead of the previously expected $2,100 million to $2,125 million. The gross margin forecast has been raised to 50.8 percent from 50.5 percent.
Meanwhile, the board of directors has appointed Mike Devine, who has served as a board member since 2011, as its new chairman. He succeeds John Gibbons, who has served as chairman since September 2017.