Deckers Bets on Brand Momentum: Can HOKA & UGG Keep Up the Growth?

Core Insights - Deckers Outdoor Corporation's performance is primarily driven by strong consumer demand for its flagship brands, HOKA and UGG, with year-over-year sales growth of 10% and 3.6% respectively in Q4 FY25 [1][9] Brand Performance - HOKA's sales reached $2.2 billion in FY25, reflecting a 23.6% year-over-year increase, supported by new product launches and international expansion, particularly in EMEA and China [4][2] - UGG generated $2.5 billion in sales for FY25, marking a 13.1% year-over-year growth, with a focus on expanding its product line beyond cold-weather offerings [4][3] International Growth - HOKA's international revenues grew by 39% year-over-year, now accounting for 34% of total brand sales, while UGG's international revenues increased by 20%, representing 39% of total sales [4][2] Competitive Landscape - Key competitors in brand innovation include Wolverine World Wide, Inc. and Urban Outfitters Inc., with Wolverine's Saucony and Merrell brands showing strong revenue growth [5][6] - Urban Outfitters' brand portfolio also demonstrated positive performance, with notable increases in net sales for its brands [7] Financial Performance and Valuation - Deckers' shares have declined by 50% year-to-date, compared to a 17.6% decline in the industry [8] - The company trades at a forward price-to-earnings ratio of 16.45X, slightly below the industry's average of 17.01X [10] - Zacks Consensus Estimate indicates a projected earnings decline of 4.4% for FY26, with a potential recovery of 9.1% in FY27 [11]