Shares of Deckers Outdoor Inc. soared as much as 17% on Friday after several brokerages raised their price targets after the company bet on full-price sales of its best-selling Hoka running shoes and Ugg boots to boost its full-year profit forecast.
Deckers shares rose to as high as $961 a share before giving up some of the gains to close at $894.70, up 6.5 percent.
Shares in rivals On Holdings Inc. (backed by tennis star Roger Federer) and Nike Inc. also rose, with On Holdings shares up 6.2% and Nike’s up 1.7%.
Shoe makers are boosting sales of running shoes, but Oregon-based Nike is struggling to keep up with competitors’ innovations.
Hoka and On have won over customers with new running shoe designs that offer even more “cloud-like” cushioning.
Hoka has also built a repeat fanbase that wants to buy the latest colorways of running shoes, much like Apple fanatics who line up for the latest iPhone.
And Deckers’ UGG boots are back in style. The fluffy winter boots peaked in the early 2000s but are back in style again. Popularity set to surge in 2022 and 2023 That’s because comfort has become a priority for post-pandemic shoppers.
Wedbush analyst Tom Nikic wrote in a note that Ugg brand discounts have decreased and the brand also appears to be gaining share of the sandal market.
“Even in times of uncertainty in the macroeconomic environment, people are spending money on things they care about, and these are two products that people care about.” “The tech giant is well positioned to continue to grow its presence in the U.S.,” said Joseph Sivero, an analyst at Truist Securities..
Truist Securities raised its price target on the 51-year-old clothing company to $1,225 from a Wall Street high of $1,200.
Meanwhile, retailers like Dick’s Sporting Goods and Nordstrom are adding fuel to the fire by giving more shelf space to Hoka and Ugg shoes and reducing their stock of Nike.
Deckers reported that Hoka sales increased about 30% in the first quarter, while UGG sales increased 14%.
Deckers Annual earnings per share forecast The company now expects earnings to range from $29.75 to $30.65, compared to its previous forecast of $29.50 to $30.00.
With post wire
