Hoka One One started to run again in the second quarter of Deckers Brands' financial year, ended Sept. 30. Hoka's sales jumped by 39 percent, lifted by the successful launch of its Clifton 3 shoe, helping the group's Other category to post a 23.3 percent sales increase to $37.7 million, with a currency-neutral rise of 23.9 percent.
Deckers is now stepping up its efforts to capitalize on Hoka's international sales prospects. It plans to extend the brand's reach beyond running into other categories. While it is still relatively small, the management believes that it could become equal in size to Brooks Running in three to five years' time, but this sounds optimistic.
The group's total revenues declined by 0.2 percent to $485.9 million in the quarter. They were off by 0.3 percent in local currencies and lower than expected, mainly due to $6 million worth of orders being shipped late because of a shift to a third-party logistics provider in Europe.
The transfer caused Deckers' international sales to decline by 5.1 percent in constant currencies and by 6.3 percent in dollars, down to $301.6 million. Domestic sales climbed by 3.6 percent to $312.2 million.
Like other companies operating in similar categories, Deckers lowered its forecast for the full financial year ending next March, predicting that they will decline by between 1.5 and 3 percent as its wholesale clients have cut back their orders because of last year's warm winter. The management was mainly referring to Ugg, which accounted for 85 percent of the turnover in the latest quarter.
Ugg's sales fell by 2.1 percent to $412.2 million in the quarter. Among the group's other major brands, Teva saw its sales drop by 4.2 percent to $17.1 million, while Sanuk recovered with a 9.2 percent increase to $18.9 million.
The group's gross margin gained 0.5 percentage points and reached 44 percent. Reduced expenses contributed to raise Deckers' net profit for the quarter by 3 percent to $37.5 million.
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