In This Article:
A slowdown in Hoka direct-to-consumer sales in the fourth quarter coupled with concerns of tariffs is causing shares for Deckers Brands to drop nearly 20 percent on Friday.
On the company’s fourth quarter earnings call on Thursday, Deckers chief financial officer Steven Fasching, noted that the Hoka’s brand DTC sales hit a “slight decline” in the U.S. due to some unique factors in the quarter.
More from WWD
-
Shares of Hoka, Ugg Parent Company Deckers Brands Sink on Trump Tariff Uncertainty
-
Canada Goose Expects Only 'Minimal Impact' From Tariffs - and Stock Jumps
“These included consumers opting to explore and purchase new product updates in store, higher levels of promotion on outgoing models and slower new consumer acquisition in the face of macroeconomic uncertainty,” Fasching said. “While in the near term, this has put pressure on the Hoka brand’s DTC growth, we are encouraged by the online retention metrics from repeat consumers in both the U.S. and internationally and expect this trend to improve following the first fiscal quarter.”
The CFO did point out that the Hoka brand drove a 3 percent increase versus last year from a DTC standpoint, which reflected continued strong growth from international regions.
Further, the executive said that global wholesale was the “primary driver” of growth in the fourth quarter for Hoka, as the brand benefited from expanded distribution sell-in of the Bondi 9 that launched in mid-January and experienced strong sell-through in the channel throughout the quarter as many consumers sought out new products in store.
Pressed further by some analysts on Thursday’s call, Fasching added that the company expected “some pressure” on the DTC business in the quarter.
“I’m not entirely surprised by that performance, generally where the quarter came in is where we expected Hoka to come in,” the CFO noted. “But once we get beyond Q1, with the success that we’re seeing with the new introductions in Hoka, we’re encouraged that you’re going to start to see those numbers improve.”
Stefano Caroti, president and chief executive officer of Deckers Brands, further pointed out on the call that Q4 was the “biggest quarter ever” for Hoka, and it grew $425 million year-over-year.
“I personally never felt stronger about the power of this brand, the team that we’ve in place as the financial model, and we see no change to our long-term expectations,” the CEO said.
Williams Trading analyst Sam Poser agreed with Caroti’s assessment in a research note, writing that he isn’t concerned about Hoka’s DTC slowdown in Q4.