Shares of Deckers Outdoor Inc. rose 13 percent on Friday, topping the $1,000 mark for the first time, after the company reported strong fourth-quarter results and was fueled by the growing popularity of Ugg boots and Hoka sneakers among Americans.
The company’s shares have soared since the beginning of last year, rising about 35% this year after rising 67% into 2023. In contrast, Nike is down 15% this year.
“FY24 was a great year for DECK, as the company’s two largest brands delivered the strongest growth across footwear and demonstrated its ability to continue to gain new customers,” Citi Research analyst Paul Lejuez wrote in a note.
Hoka’s net sales increased 34% in the fourth quarter, accounting for about 56% of Deckers’ revenue, while UGG’s net sales increased 14.9%, accounting for about 38% of Deckers’ total sales.
These strong sales figures have led at least 14 analysts to raise their price targets on the company’s shares.
While big names like Nike and Adidas have been hit, emerging brands like On Holdings Inc. and Deckers Outdoor Inc. have been able to maintain demand as wholesalers stock shelves with innovative products.
Hoka and Ugg have become two of the strongest, most sought-after brands in the footwear industry, CEO David Powers said on a conference call after the company released earnings on Thursday.
“We were cautious on Hoka going into the fourth quarter due to competitive risks from the channel investigation, but the quarter ended up significantly exceeding our expectations,” said Jessalyn Wong, analyst at Evercore ISI.
The average rating of 22 analysts on the stock is a “buy,” with a median price target of $1,039, according to LSEG data.
Wedbush analyst Tom Nikic said Deckers remains one of the “fundamentally strongest stocks” the brokerage covers.
