Hoka and Ugg Help Deckers Deliver Its Largest Quarter Ever
Deckers Brands delivered its largest quarter in history for the third quarter of fiscal 2022 despite ongoing supply chain issues and a slowdown in its Sanuk and Koolaburra brands.
The footwear conglomerate – which also owns Hoka, Ugg, and Teva – reported a revenue increase of 10.2% to $1.188 billion in the third quarter compared to $1.078 billion for the same period last year. Operating income came in at $293.4 million in third quarter compared to $328.7 million for the same period last year.
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“Our portfolio of brands delivered Deckers’ largest quarter in history, with balanced growth among our direct-to-consumer and wholesale channels and across multiple geographies,” said Dave Powers, president and CEO in a statement. “We believe Hoka and Ugg are two of the strongest brands in the footwear industry, which are complimented by our strong operating model and fortified balance sheet.”
Breaking down sales by brand, Ugg saw net sales for the third quarter increase 7.9% to $945.9 million compared to $876.8 million for the same period last year. Hoka saw net sales increase 30.3% to $184.6 million compared to $141.6 million for the same period last year. And Teva reported that its net sales increased 31.4% to $20.6 million compared to $15.7 million for the same period last year.
Sanuk, on the other hand, saw net sales decrease 13.4% to $6.1 million compared to $7.0 million for the same period last year. Other brands, primarily composed of Koolaburra also saw net sales decrease in the quarter by 16.6% to $30.6 million compared to $36.7 million for the same period last year.
Courtesy of Ugg
Moving to its wholesale business, Deckers reported a 7.3% increase in the third quarter to $598.4 million compared to $557.9 million for the same period last year. Direct-to-Consumer (DTC) also saw an increase in the quarter with net sales climbing 13.4% to $589.4 million compared to $519.9 million for the same period last year.
Supply chain issues continue to be a nuisance for the company. In its earnings release, Deckers stated that it has experienced disruption and delays within its sourcing network related to the COVID-19 pandemic.
In its third quarter earnings Deckers said that, “Fiscal year to date, the most significant macro-level supply chain impacts the company has experienced are extended transit lead times and cost pressures related to container shortages, port congestion, and trucking scarcity that have caused shipping delays and a higher usage of air freight.”
The company noted that the full effect and duration of disruptions and delays are not yet known, and there are no indicators signaling improvement in the near-term. Deckers also mentioned that while all its owned and third-party facilities are open and operational, they are continuing to experience capacity constraints and labor shortages, which may continue to have an adverse effect on its operations, the company said.
“While we have continued to experience unprecedented demand for our brands, we are still navigating a challenging supply chain and pandemic environment,” added Powers. “Even with these headwinds, I have great confidence in our organization and its ability to deliver another impressive year while positioning the company for long-term success.”
Looking ahead, Deckers is now expected its net sales to be in the range of $3.03 billion to $3.06 billion for fiscal 2022.
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