Deckers Outdoor’s Mixed Growth Prospects: UGG’s Success vs. HOKA’s Challenges

In a report released yesterday, Jim Duffy from Stifel Nicolaus maintained a Hold rating on Deckers Outdoor (DECK – Research Report), with a price target of $127.00.

Jim Duffy has given his Hold rating due to a combination of factors affecting Deckers Outdoor’s growth prospects. The company experienced a notable increase in UGG revenue and gross margin, which were above expectations. However, the HOKA brand did not meet revenue estimates, marking its first miss since December 2021, raising concerns about its growth momentum.
While HOKA has potential for future growth through brand awareness and international expansion, the slowdown in direct-to-consumer sales, especially in the U.S., poses challenges to its long-term growth visibility. Additionally, the shift in growth composition towards wholesale and increased UGG contributions is seen as less favorable compared to the previously successful direct-to-consumer model. Despite an intriguing valuation, the analyst seeks stronger indications of HOKA’s brand extensibility before considering a more positive outlook.

DECK’s price has also changed moderately for the past six months – from $192.150 to $126.090, which is a -34.38% drop .