Core Insights - The competition between On Holding (On) and HOKA has intensified, with On showing a significant growth advantage over HOKA in recent financial results [1][3][5]. Financial Performance - On reported a revenue increase of 24.9% to 794.4 million Swiss Francs (approximately 7.09 billion RMB) for Q3, significantly exceeding market expectations [3]. - HOKA's parent company, Deckers Brands, reported a revenue growth of 9.1% to 1.431 billion USD (approximately 10.15 billion RMB) for Q2 of FY2026, with HOKA's growth slowing to 11.1% [5]. - On's gross margin increased to 65.7%, and net profit surged by 289.9% to 119 million Swiss Francs (approximately 1.06 billion RMB) [3]. Market Dynamics - On's Asia-Pacific market saw a remarkable revenue increase of 109.2%, becoming a key driver of overall performance [3]. - HOKA's international revenue declined by 29.3%, indicating challenges in its global market presence [5]. - Both brands entered the Chinese market around 2017-2018, with On currently operating 70 stores in China, while HOKA has 28 [6]. Brand Strategy and Positioning - On has diversified its product line beyond running shoes to include fitness, tennis, and outdoor categories, enhancing its market appeal [8]. - HOKA's strength lies in its cushioning technology, appealing to specific consumer segments, but it has faced challenges in product line innovation [8]. - The competitive landscape includes traditional giants like Nike and Adidas, as well as emerging domestic brands, intensifying the rivalry in the high-end running shoe market [10].

Core Viewpoint - HOKA, a rising brand in the outdoor running market, is experiencing a slowdown in growth despite a strong past performance, with net sales growth of 11.1% reaching $634.1 million as of September 30, indicating a decline from previous quarters where growth exceeded 20% [1][2] Financial Performance - HOKA's revenue increased from $150 million in 2018 to $1.81 billion in 2024, achieving a six-year CAGR of 51% and increasing its share of parent company Deckers Brands' revenue from 8% to 42% [2] - The brand's sales growth was only 10% year-over-year for the quarter ending March 31, with previous quarters showing growth rates of 29.7%, 34.7%, and 23.7% [2][3] - Deckers Brands forecasts a low double-digit growth of 10%-15% for HOKA's sales in the current fiscal year due to cautious consumer attitudes and pressures from tariffs and rising product prices in the U.S. market [4][5] Market Dynamics - The competitive landscape is shifting, with HOKA facing pressure from brands like ANTA, which maintained a growth rate of 37.2% in the first half of the year, particularly in the Asia-Pacific region [3] - Changes in market environment and channel structures, including increased collaboration between major brands like Nike and top retailers, have impacted HOKA's wholesale channel performance [4] Brand Strategy and Future Directions - HOKA's growth model is transitioning, emphasizing brand establishment and channel efficiency as key factors for future success [6] - The brand is focusing on expanding its apparel line and increasing direct-to-consumer (DTC) sales, with plans to enhance its presence in the Asia-Pacific market [7][10] - HOKA has established a significant first-mover advantage in the Chinese trail running market, with a market share among the top three brands in terms of footwear worn in events [9] Retail Expansion - HOKA is actively expanding its retail presence in China, with a focus on flagship stores in major cities like Shanghai and Beijing, and has opened the largest brand experience center globally [11][12] - The brand's strategy includes collaborating with local retailers to penetrate second-tier markets, reflecting a broader trend of outdoor brands increasing their presence in high-end shopping centers [13][14] Consumer Trends - The Chinese outdoor sports market is characterized by a bifurcation in consumer preferences towards "high cost-performance" and "high quality" products, with sports brands becoming important lifestyle and value expression tools for the middle class [15][16] - The market is shifting from outdoor trail running to urban road running, increasing competition among mid-to-high-end running shoe brands [18][19]

Core Viewpoint - HOKA, a key brand under Deckers Brands, is experiencing a slowdown in growth despite maintaining double-digit increases in sales and net profit, attributed to market saturation and increased competition [1][3][9]. Financial Performance - Deckers Brands reported net sales of $1.431 billion for Q2 of fiscal year 2026, a year-on-year increase of 9.1%, with net profit reaching $268 million, up 10.74% [3]. - HOKA's net sales for the same period were $634 million, reflecting an 11% growth, while UGG sales were $759 million, up 10.1% [3]. - The company anticipates total net sales of approximately $5.35 billion for the fiscal year 2026, with HOKA's growth expected to be in the low double digits of 10%-15% [3]. Brand Growth and Market Position - HOKA's sales growth has been significant over the past years, with a 23.6% increase in fiscal year 2025, reaching $2.233 billion, and a 27.9% increase in fiscal year 2024 [4]. - HOKA currently contributes 45% to Deckers Brands' total sales, closely following UGG's 51% share [5]. Market Dynamics - The running shoe market is becoming increasingly competitive, with brands like Nike, Adidas, and domestic players such as Anta and Xtep entering the mid-to-high-end segments [10][12]. - The demand for professional running shoes has surged due to the growth of mass participation events like marathons, benefiting brands like HOKA that have established a strong reputation in niche markets [9][11]. Consumer Trends - The rise of consumer spending on sports brands is driven by a shift towards a more active lifestyle and the popularity of running events, which has expanded the customer base for brands like HOKA [5][8]. - HOKA's marketing strategy focuses on appealing to urban consumers who prioritize health and quality of life, leveraging social media and KOL marketing to enhance brand image [8]. Challenges Ahead - HOKA's growth rate has slowed from over 50% to around 11%, reflecting a natural deceleration as the brand matures and faces intensified competition [9][10]. - The brand must innovate and enhance its market positioning to sustain growth, particularly in the high-end consumer segment [13].

Core Insights - HOKA, a key brand under Deckers Brands, is experiencing a slowdown in growth despite maintaining double-digit increases in sales and net profit, attributed to market saturation and increased competition [1][3][9] Financial Performance - For the second quarter of fiscal year 2026, Deckers Brands reported net sales of $1.431 billion, a year-over-year increase of 9.1%, and net profit of $268 million, up 10.74% [3] - HOKA's net sales reached $634 million, growing 11% year-over-year, while UGG's sales were $759 million, up 10.1% [3] - The overall sales forecast for Deckers Brands in fiscal year 2026 is approximately $5.35 billion, with HOKA's growth expected to be in the low double-digit range of 10%-15% [3] Brand Development - HOKA's sales growth has been impressive over the past few years, with a 23.6% increase in fiscal year 2025, reaching $2.233 billion, and a 27.9% increase in fiscal year 2024 [4] - HOKA currently contributes 45% to Deckers Brands' total sales, closely following UGG's 51% share [5] Market Trends - The running shoe market is becoming increasingly competitive, with brands like Nike, Adidas, and domestic brands such as Anta and Xtep entering the mid-to-high-end segment [10][12] - The demand for professional running shoes has surged due to the growth of mass participation events like marathons and trail running [9][11] Consumer Behavior - The rise of HOKA and similar brands in China is linked to consumer upgrades and the growing popularity of sports lifestyles, appealing to urban consumers who prioritize health and quality of life [8][9] - HOKA's marketing strategy focuses on product innovation and leveraging social media to build a high-end brand image [8] Competitive Landscape - The running shoe sector is described as a "red ocean," with numerous brands competing for market share, leading to increased pressure on HOKA and similar brands [10][12] - As HOKA's market presence grows, maintaining high growth rates becomes more challenging due to market saturation and heightened competition [12][13]

Core Insights - Deckers Outdoor Corp experienced a nearly 12% decline in stock price following its Q2 FY2026 results, despite surpassing revenue and EPS expectations, primarily due to a cautious full-year outlook and external pressures [1] - The stock has dropped 55% year-to-date, reflecting market sentiment rather than the company's operational achievements [1] Group 1: Brand Performance - HOKA brand continues to lead growth, increasing its market share by two points in the U.S. road-running sector and achieving mid-single-digit growth in wholesale sell-through [3] - International sales for HOKA surged nearly 30%, driven by strong performance in Europe and Japan, with direct-to-consumer (DTC) sales accounting for 39% of total revenue [3] - UGG brand saw low-teens growth in digital traffic and improved in-store conversion rates, indicating strong brand equity despite challenging consumer spending conditions [3] Group 2: Operational Efficiency - Inventory increased by only 7% year-over-year, showcasing improved supply-chain discipline amid varying demand across regions [4] - Management aims to enhance inventory turns by 0.5x in FY2026 while maintaining stable to slightly elevated average selling prices through strong full-price sell-through [4] - E-commerce represented 48% of DTC revenue, with unchanged return rates year-over-year, indicating better product fit and customer retention [5] Group 3: Strategic Growth Initiatives - Deckers is expanding its direct-to-consumer presence, operating 42 HOKA-owned stores globally, up from 34 the previous year [7] - Wholesale activity remains robust, with UGG reorder rates reported as "better than planned," suggesting strong retail demand [7] - Strategic advancements in DTC locations, streamlined inventory, and balanced channel distribution position Deckers to respond effectively once consumer spending normalizes [8] Group 4: Overall Assessment - The Q2 results reflect a recalibration rather than disappointment, with management focusing on brand control and margin integrity over short-term growth [9] - Key indicators such as market share gains, healthy DTC metrics, stable pricing, and leaner inventory suggest that Deckers continues to outperform its sector [9]

Core Insights - HOKA, a key brand under Deckers Brands, is experiencing a slowdown in growth despite maintaining double-digit increases in sales and net profit, attributed to market saturation and increased competition [1][2][8] Financial Performance - For Q2 of fiscal year 2026, Deckers Brands reported net sales of $1.431 billion, a year-over-year increase of 9.1%, and net profit of $268 million, up 10.74% [2] - HOKA's net sales reached $634 million in Q2, reflecting an 11% year-over-year growth, while UGG's sales were $759 million, growing by 10.1% [2] - The overall sales forecast for Deckers Brands in fiscal year 2026 is approximately $5.35 billion, with HOKA's growth expected to be in the low double digits of 10%-15% [2][3] Brand Development - HOKA's net sales grew by 23.6% in fiscal year 2025, reaching $2.233 billion, and had previously seen growth rates exceeding 55% in earlier years [3] - HOKA contributes 45% to Deckers Brands' total sales, closely following UGG, which accounts for 51% [3] Market Trends - The growth of HOKA and similar brands is driven by consumer spending upgrades and the expansion of professional sports into the mass market, appealing to a broader consumer base [4] - The running shoe market in China is rapidly expanding, with significant increases in sales and participation in running events, indicating a growing demand for specialized running shoes [6][9] Competitive Landscape - The running shoe market is becoming increasingly competitive, with both international brands like Nike and Adidas and domestic brands like Anta and Xtep intensifying their presence [9][10] - HOKA faces challenges from traditional brands launching similar products and a potential consumer fatigue regarding the "thick sole" trend [10] Strategic Recommendations - To sustain growth, HOKA needs to enhance brand positioning towards high-end consumers, focus on product innovation, and embrace digital transformation to improve customer experience [10]

Group 1: Market Dynamics - Forever 21 has made its fourth return to the Chinese market, highlighting China's significance in global apparel consumption, driven by a large young consumer base [1][3] - Authentic Brands Group, which owns Forever 21, has established its Asia-Pacific headquarters in Shanghai, emphasizing the city as a strategic market for global expansion [3][4] - The Shanghai metro line 18 has been rebranded with Forever 21's colors to engage young consumers, indicating a targeted marketing strategy [3] Group 2: Global Brand Strategies - HOKA has opened its first global brand experience center in Shanghai, reflecting the city's importance in the brand's Asia-Pacific strategy [4][5] - Authentic's retail revenue in the Asia-Pacific region is approximately $10 billion, with ambitions to increase its share from 2% to 5% in the next three years [12][13] - Adidas has seen a resurgence in the Greater China region, achieving €1.83 billion in revenue in the first half of 2025, indicating a recovery in the market [13][14] Group 3: Manufacturing and Globalization - Shenzhou International has expanded its manufacturing footprint in Vietnam and Cambodia, with significant investments aimed at integrating its supply chain [8][9] - The global footwear manufacturing landscape is shifting, with companies like HOKA and Adidas increasing production in Vietnam and Indonesia, reducing reliance on China [9][10] - China's textile and apparel exports remain dominant, with a total of $582 billion in exports in the first five months of 2025, surpassing other major exporting countries combined [10] Group 4: Consumer Insights - Research indicates that China's consumption power is often underestimated, with a report suggesting that actual consumption levels are closer to those of developed countries than previously thought [14][15] - The average Chinese consumer purchases approximately 22 pieces of clothing annually, comparable to Mexico, while the footwear purchase rate is stable at about 2 pairs per year [15] - The report highlights that the perceived gap in consumption levels is largely due to price advantages and currency discrepancies, suggesting potential for growth in both quantity and quality of consumption in China [15]

Core Insights - HOKA has become a frequent presence in the shoe cabinets of Chinese middle-class consumers, experiencing rapid growth since being acquired by Deckers Brands in 2013 [1] - The company reported its best-ever quarterly performance for HOKA, but the growth rate is showing signs of decline [1][4] Financial Performance - Deckers Brands achieved revenue of $965 million in Q1 2026, a year-over-year increase of 16.9%, with a gross margin of 55.8% [2] - HOKA's net sales grew by 19.8% to $653.1 million, compared to $545.2 million in the same period last year [2] - UGG also performed well, with net sales increasing by 18.9% to $265.1 million [2] Regional Growth - The EMEA region was a key growth driver, with record replenishment volumes in wholesale and steady growth in DTC channels [3] - The APAC region showed impressive growth, with HOKA expanding its market presence through partnerships and self-operated retail stores in China [3] Growth Rate Decline - HOKA's growth rate has slowed, dropping from 29.7% in Q1 2025 to 19.8% in Q1 2026, indicating a nearly 10 percentage point decline [4] - Overall net sales growth for Deckers Brands also decreased from 22.1% to 16.9% in the same timeframe [4] Competitive Landscape - HOKA faces intensified competition in the high-performance running shoe market, particularly from Brooks in the U.S. and local competitor Kailas in China [5] - Brooks reported a 15% increase in global revenue, while HOKA's growth in the U.S. is slowing [5] - Kailas dominates the domestic market with a 34.8% share in trail running shoes, while HOKA holds 24.6% [5] Future Outlook - For Q2 2026, Deckers Brands expects net sales between $1.38 billion and $1.42 billion, with diluted earnings per share projected between $1.50 and $1.55 [6] - The outlook is contingent on the stability of business conditions and potential macroeconomic uncertainties [6]

Core Viewpoint - The competition between HOKA and On is intensifying, with HOKA experiencing a significant slowdown in growth while On continues to thrive, raising questions about the reasons behind these divergent paths in a similar market environment [3][5][32]. Group 1: HOKA's Performance - HOKA's sales growth has slowed to 10% in the latest quarter, down from 24% and 35% in the previous two quarters, with sales reaching $586 million [3][5]. - The brand's product innovation has been insufficient, leading to a decline in consumer interest, as evidenced by a drop in natural search volume for new products [25][32]. - HOKA's positioning has become somewhat mediocre, lacking breakthroughs in professional fields and being overly conservative in its fashion transformation [32][54]. Group 2: On's Performance - On has reported a remarkable 43% growth, with net sales reaching 727 million Swiss francs, and has raised its annual forecast for at least 28% growth in the upcoming fiscal year [5][33]. - The brand has successfully established itself in the high-end running market, with an average shoe price exceeding 1,000 yuan, and has received endorsements from elite athletes [42][52]. - On's marketing strategy includes collaborations with high-fashion brands and a focus on community engagement, which has strengthened its brand positioning and consumer loyalty [44][50]. Group 3: Market Dynamics - The outdoor sports market in China has significant growth potential, with a current penetration rate of only 28%, compared to over 50% in overseas markets [54]. - Both brands face competition not only from each other but also from established giants like Nike and Adidas, as well as emerging niche brands [56]. - The ongoing competition between HOKA and On highlights the necessity for brands to continuously innovate and capture consumer attention in a rapidly changing market [54][58].