Deckers Brands’ sales growth gained momentum in the fiscal fourth quarter, led by the continued global expansion of Hoka One One and a strong showing at its core Ugg brand.
Sales in the three months ended March 31 increased by 49.7 percent to $561.2 million and were up by 47.9 percent on a constant currency basis. Net profit more than doubled, to $33.5 million from $16.1 million the year earlier. Gross margin expanded to 53.2 percent from 51.5 percent, reflecting improved full price selling, a higher proportion of direct-to-consumer business and favorable foreign exchange rates, partially offset by increased freight and transportation costs.
The strongest growth was recorded by Hoka One One, which saw brand sales soar by 74.2 percent in the quarter to $177.5 million. Ugg brands sales grew by 53.1 percent to $300.5 million, driven by strength in classic boots, winter boots and spring fluff products, while also benefiting from a positive comparison effect to the fourth quarter of the previous fiscal year, when wholesale shipments were disrupted and retail stores closed in the last two weeks of March. Teva sales inched up by 1.0 percent to $60.2 million and Sanuk sales decreased by 8.8 percent to $12.1 million. Koolaburra and other brands saw sales surge by 178.5 percent to $10.9 million.
In the fourth quarter, wholesale sales increased by 41.4 percent to $326.1 million while direct-to-consumer (DTC) sales rose by 63.0 percent to $235.1 million.
U.S. sales jumped by 64.3 percent to $379.2 million while international sales climbed by 26.2 percent to $181.9 million.
For the full fiscal year, overall sales grew by 19.4 percent to $2,546 million and were up by 18.4 percent on a constant currency basis. Net profit grew to $328.6 million from $276.1 million the year earlier and gross margin rose to 54.0 percent from 51.8 percent.
In the full year, Hoka One One’s top line increased by 62.0 percent to $571.2 million. Ugg sales increased by 12.9 percent to $1,717 million, as growth of its U.S. business offset international declines. Teva sales rose by 0.6 percent to $138.1 million while Sanuk saw sales decrease by 18.2 percent to $41.8 million and Koolaburra and other brands saw sales increase by 9.4 percent to $76.7 million. DTC sales grew to represent 42 percent of total sales compared to 35 percent in the previous fiscal year.
“Fiscal 2021 revenue exceeded our pre-pandemic expectations as we saw an acceleration of certain growth opportunities,” said Dave Powers, the CEO of Deckers Brands. “With brands scaling faster than previously anticipated, we now need to accelerate critical investments to scale our supply chain and logistics infrastructure, as well as bolster our teams with additional talent to prepare for emerging opportunities.”
Deckers expects Hoka to achieve sales of about $800 million in the fiscal year ending March 31, 2022, representing growth of about 40 percent. Ugg’s growth is seen ranging from a high single digit to a low double-digit percentage rise, led by domestic wholesale strength and its international business returning to growth. Teva’s sales are seen up by a mid-single digit rate while Sanuk is expected to be approximately flat and Koolaburra is seen growing by a low double-digit rate.
Overall, Deckers expects sales of $2,950 million to $3,000 million in fiscal year 2022, representing a mid-to-high teen percentage growth, and a gross margin of approximately 53.3 percent, down by 0.7 percentage points compared to fiscal year 2021.
Powers said Deckers aims to build Hoka to become a “global performance brand” with revenues of over $1 billion. The company also plans to expand its overall DTC business to approach 50 percent of global revenues as well as ”scaling international markets across brands and seeding opportunities beyond footwear,” he explained.