The topic of innovation is top of mind in the performance running shoe market – especially if you ask Nike, which has been widely criticized for having a lackluster product pipeline by analysts and the Street in recent months.
But for Deckers chief executive officer Dave Powers, this isn’t an issue for its star running brand Hoka. Indeed, on the product front, Hoka is driving growth and consumer acquisition through innovative updates and new introductions across a diverse assortment of footwear.
Powers told analysts on the company’s fourth quarter earnings call on Thursday that Hoka’s fiscal year 2024 performance was primarily driven by road running favorites like the Clifton and Bondi franchises, stability staples like the Arahi and Gaviota, both of which received updates during the year, trail conquers like the Speedgoat, Challenger and Stinson franchises and everyday performance lifestyle shoes like the Transport, Solimar and the Kawana.
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“We expect these styles will continue to contribute to the growth of Hoka moving forward but are also really excited about the brand’s ongoing efforts to constantly infuse new innovations into the product assortment,” Powers said.
“Innovation is the Hoka brand’s top priority, continuing to develop groundbreaking products that energize consumers around the world,” the soon-to-be retired CEO continued. “We are fortunate to have a phenomenal roster of Hoka athletes, who we will continue partnering with to drive greater athlete enhanced innovations into our most pinnacle products while also further developing the assortment to segment and differentiate Hoka distribution as we continue to scale. The recently launched Skyward X is the perfect example of new product innovation that benefits our segmentation efforts. This all-new style was developed as our first carbon-plated shoe that is designed for everyday runs with maximum cushion.”
Looking ahead, Powers noted that the company is “methodically” widening Hoka’s distribution over the next year. “We intend to selectively expand our distribution with key partners while carefully monitoring the productivity of those doors,” he said.
This comes as Deckers wrapped up fiscal 2024 on a high note, with net sales increasing 18.2 percent to a record $4.288 billion for the year. At Hoka, the company reported that the brand’s net sales in fiscal 2024 rose 27.9 percent to $1.807 billion, up from $1.413 billion in 2023.
As for fiscal 2025, Deckers is optimistic that Hoka will remain the main driver of growth across the company. The company said that it expects Hoka’s net sales to increase 20 percent over fiscal 2024 next year through consumer acquisition and retention gains in its direct-to-consumer channel, expanding strategically through key partners while maintaining disciplined marketplace management and maintaining a dedicated focus on growing awareness and market share internationally.
Company-wide, Deckers is expecting net sales for fiscal 2025 to increase approximately 10 percent to $4.7 billion, with diluted earnings per share expected to be in the range of $29.50 to $30.00.
