Deckers Brands, the group behind Uggs, Teva, Hoka One One and others, has turned in a quarter of record sales as its stock continues to rise. The stocks are now sitting at the highest point in the company’s recorded history, at $177.58 as of market close Wednesday.
In a Nutshell: Deckers has had success garnering consumer interest in recent seasons, especially for Hoka One One, which saw its sales increase by nearly 70 percent during the quarter. Of course, first-quarter sales are also up at Uggs, the group’s primary earner.
However, the group also fell into the red during the quarter, though the loss was far below the mark analysts expected and the company’s own projections.
In related news, the company recently filed a second lawsuit against Target Corp. for allegedly reproducing its Ugg brand designs unlawfully.
Sales: Net revenue for the Deckers increased by 10.5 percent during the quarter for a total of $276.8 million compared to $250.6 million in the same period last year, and above the $259.71 million analysts predicted. Ugg sales rose by 1.5 percent to $138.5 million from $136.5 million in FY19 while Teva fell 4.3 percent to $38.3 million from $40 million the previous year.
Hoka One One was, again, the standout for Deckers in Q1, pulling in $79.5 million in sales—an increase of 69.2 percent over the $47 million it earned in the comparable period last year.
Earnings: In its previous financial release, Deckers warned of a pending loss of between $1.25 and $1.15 per share as it looked to weather the warm seasons and a pending trade war between the U.S. and China. Analysts followed suit, predicting a loss of $1.12 in the brand’s first quarter. However, that prediction turned out to be overblown as Deckers was able to contain its losses to 67 cents per share in Q1, compared to a loss of 98 cents in the prior year period. As a result of the company’s positive growth, Deckers has raised its full-year outlook to a range of $8.40 to $8.60 from its previous mark at $8.20 to $8.40.
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CEO’s Take: Commenting on the group’s strong start, Deckers president and CEO, Dave Powers, said the company remains focused on profitability as it continues to deliver relevance and innovation through Deckers’ premier brands.
“The Deckers organization experienced a strong start to fiscal year 2020,” Powers said. “I am proud of the positive momentum that our portfolio of brands continues to build as we remain focused on the strategies that have proven successful in strengthening our operations over the past few years. The Deckers team continues to drive excitement behind innovative product introductions and remains disciplined in delivering top-tier levels of profitability. With the first quarter now behind us, we are firmly committed to our strategies and remain confident in our abilities to deliver on them.”