By Granth Vanaik

(Reuters) - Deckers Outdoor raised its annual profit forecast after beating first-quarter estimates on Thursday, betting on strong demand for the footwear and apparel firm's Hoka sneakers and UGG boots.

WHY IS IT IMPORTANT?

Brands such as On Holding and Deckers are gaining popularity as their new and innovative products are attracting more younger customers at a time when sportswear giants such as Nike are taking a hit.

CONTEXT

Earnings reports of several retailers have indicated that customers are selectively shopping for non-essential products they have been coveting, even as sticky inflation strains household budgets.

Retailers such as Dick's Sporting Goods and Nordstrom have both seen demand increase for Hoka and On's fashionable products.

KEY QUOTES

"HOKA and UGG continue to drive robust full-price demand in the global marketplace by delivering compelling product that consumers love," said CEO Dave Powers.

MARKET REACTION

Deckers' shares, which have risen nearly 26% this year, were up about 8.4% in extended trading.

"I think the figures continue to be positive ... there's room for growth for Hoka and UGG continues to do very well. It's a well run business," said Jane Hali & Associates analyst Jessica Ramirez.

GRAPHIC

BY THE NUMBERS

Deckers now projects annual earnings per share in the range of $29.75 to $30.65, compared to its prior forecast of $29.50 to $30.

It continues to expect net sales for fiscal 2025 to grow 10% to $4.7 billion.

Net sales came in at $825.3 million, compared to estimates of $807.9 million.

The company posted earnings per share of $4.52. Analysts on average had expected $3.48 per share, according to LSEG data.

Sales at Hoka jumped 29.7%, while UGG banner climbed 14%.

Its direct-to-consumer channel saw sales surge 24%, while wholesale business soared 21%.

(Reporting by Granth Vanaik in Bengaluru; Editing by Sriraj Kalluvila)