Core Viewpoint - Deckers Outdoor's brands Uggs and Hoka are experiencing a loss of sales momentum, which is expected to pressure the company's profit margins. Bernstein has rated Deckers as "underperform" with a target price of $100 [1] Group 1: Hoka Brand Analysis - Hoka has reached saturation in the U.S. running shoe market and is exiting a prolonged popularity cycle. Future growth rates are expected to slow to high single digits, primarily driven by international markets [1] - Hoka's cushioning technology has been imitated by competitors, and retailers are showing fatigue towards this trend. Nike's strong return in the running shoe sector poses a threat due to its more extensive product line, while On Running continues to expand its market share [2] Group 2: Uggs Brand Analysis - Uggs has seen significant growth in the global casual shoe market, but this category is gradually shrinking as consumers shift towards athletic shoes. The growth rate for Uggs is projected to be around 4%, a decline from the double-digit growth rates seen in previous years [2] Group 3: Financial Performance - Deckers' stock has declined by 43% year-to-date, closing at $115.43, down 2.74% as of the last trading day [3] - Despite both brands currently being profitable with gross margins close to 60%, the anticipated slowdown in growth and shifts in revenue structure towards wholesale and lower-priced categories are expected to gradually decrease profit margins. A forecasted decline of 190 basis points in gross margin is expected from fiscal year 2026 to 2030 [1]

Core Viewpoint - The recent launch of the Bluetooth remote key for the Zhijie model by Hongmeng Zhixing has sparked significant backlash from car owners, who feel it is unfair that they must purchase this feature separately while other models from the same brand come standard with it. This dissatisfaction coincides with a notable decline in sales for the Zhijie brand in April 2023, raising concerns about its market performance and brand reputation [2][3][5]. Sales Performance - In April 2023, Zhijie brand's sales were only 4,461 units, representing a year-on-year decline of 10.99% and a month-on-month decline of 55.41% [3][5]. - The brand reached a peak sales figure of 17,736 units in December 2022, but has seen a significant downward trend in 2023, with January sales at 13,000 units, followed by 10,004 and 10,005 units in February and March respectively [5]. - The sales performance for the week of April 28 to May 4, 2023, was also poor, with a reported sales figure of 1,100 units, reflecting a 23% decline [6]. Competitive Landscape - The decline in Zhijie sales is partly attributed to increased competition from the newly updated Tesla Model Y, which has introduced attractive financing options and a competitive price point that diminishes Zhijie's pricing advantage [7][8]. - The Zhijie R7 model competes directly with the Aito M7, leading to potential internal competition that could further impact sales [8]. Customer Sentiment - Customer dissatisfaction is evident, particularly regarding the Bluetooth remote key, which is not included as standard equipment for the Zhijie models, unlike other models from the same brand [10][11]. - The pricing of the Bluetooth remote key, originally set at 719 yuan and currently offered at a promotional price of 498 yuan, has also been criticized as being too high [10][11]. - The official response from Hongmeng Zhixing indicates that the Bluetooth key is an optional feature, but this has not alleviated customer concerns regarding the initial marketing of the product [11]. Brand Strategy - To improve sales, Zhijie must address the competitive pressure from Tesla and enhance customer satisfaction to rebuild its brand reputation and market presence [11].