Out with the UGG, in with the HOKA (DECK)

April 3, 2024

Uggs (Deckers' insulated boot pride and joy) were the hottest shoe of Winter. 

In Q3, UGG revenue rose 15% to achieve its first-ever billion-dollar quarter. DTC revenue for UGG increased 20%, accounting for 62% of the brand's total revenue.

As peak season for Uggs cools off, DECK can showcase another rising star in its portfolio: HOKA, a highly-touted and extremely comfortable running shoe.

HOKA has achieved impressive success in attracting new customers and maintaining loyalty among existing ones, with the brand witnessing a 50% increase in new international customer acquisitions and a 27% increase domestically; furthermore, HOKA has seen a 55% rise in customer retention internationally and a 33% increase in the U.S.

LikeFolio data suggests the HOKA brand may just be getting started -- HOKA web visits have increased by +43% YoY, the highest rate of traffic growth for any athletic shoe in our universe.

The introduction of new products like the Cielo X1, a high-performance running shoe, and lifestyle-oriented products are bolstering consumer demand.

HOKA's digital traffic growth is helping to keep DECK web visits at large positive on a YoY basis as its UGG brand runs out of steam a bit -- collective web visits for DECK are up by +12% YoY.

DECK mentions are also positive, up +31% on a YoY basis, driven recently by -- you guessed it -- HOKA.

Last quarter DECK's revenue growth at large was impressive, especially considering its healthy split of in-store vs. eCommerce sales. Total company revenue increased 16% to $1.56 billion, with direct-to-consumer (DTC) revenue up 23%, making up 55% of total company revenue.

But boy is the bar high. DECK shares have doubled over the last year.

We'll be keeping a close eye on this one heading into earnings. As the company's stock price rises, so do expectations. So far HOKA appears to be holding DECK's head above water, but any slowdown could spook the market.

We're about a month out, so stay tuned.

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