Footwear Insight

THE FOOTWEAR EYE M arket momentum for the Hoka One One brand, whose global revenues rose 58 percent in FY20 to $353 million, is forecast to continue this fiscal year, but at a slower rate. Senior executives at parent Deckers Outdoor Corp. last week told analysts that Hoka's projected sales increase for the fiscal year that began April 1 is likely to be lower than the "low 30 percent range" sales gain achieved by the brand during the first 45 days of the FY. "We will continue to fuel the Hoka brand with digital marketing campaigns and virtual touchpoints to engage with consumers," Dave Powers, president and CEO of Goleta, CA-based Deckers told analysts. "There's little to no discounting on the brand. That's because we managed inventory tightly…It's selling through, the margins are high, and our partners are benefitting from that high average retail and margin." While specialty run retail has been crucial to Hoka's trajectory, the brand could take a small hit if some of these businesses don't continue post-COVID-19. Decker's senior management is hopeful any lost business transfers online or to another account. Hoka recently opened Dick's Sporting Goods after a test some three or four years ago. As for some other Deckers' brands, Ugg sales increased 5 percent for a second consecutive year in FY20, helped by a more diversified product assortment; and Koolaburra global revenues jumped 58 percent last year to $70 million, bol- stered by market share gains in the U.S. family value channel. Koolaburra, which is expanding into loungewear via a license this fall, is said to be well positioned to grab demand from budget-conscious consumers. As of last week, Deckers hadn't experienced a large number of cancellations for any of its brands. Nonetheless, it's taking a cautious approach in planning the back half of its FY21 busi- ness. Backlog at March 31 was up 4.6 percent year-over-year. "I think what we're finding is both Hoka and Ugg are proving to be really important brands for consumers right now," Powers said. "Ugg on the work from home comfort, lifestyle perspec- tive. And then a lot of consumers are doing home workouts and trying to exercise more." —Bob McGee Deckers Will Continue Investing in HOKA STRATEGY Hoka One One Challenger ATR 5 S hoe Carnival said it was pleased with the perfor- mance of athletic and children's styles in a challenging period as it moved swiftly to ramp up e-commerce and real- ized a triple-digit increase in the segment in the first quarter. CEO Cliff Sifford pre- dicted continued strength in laidback looks, saying, "Lifestyle is going to be much more casual going into next year." As chainwide e-commerce revenues grew more than 500 percent for the four weeks ended May 16, the Evansville, IN-based family footwear retailer said more than 70 percent of sales in reopened doors were generated by its loyalty club members. Menomonee Falls, WI-based Kohl's is exiting eight women's private apparel brands this year but says it remains com- mitted to growing the active category, pointing out that it has doubled the seg- ment's sales since 2013. New brands being introduced this fall online and in-store include Toms, which the retailer believes will resonate with its Millennial customers. Hibbett Sports, which had its 1,000-plus store base open for approximately 60 percent of the period, suffered a 21 percent drop in first-quarter sales and a year-over- year comp sales decline of 19.5 percent. Still, the Birmingham, AL-based sporting goods retailer realized a nearly 111 per- cent increase in first-quarter e-commerce sales to slightly more than 22 percent of period revenues, or an implied $59.4 mil- lion. Responding to customer need during the pandemic, Hibbett implemented a curbside pick-up program in a six-hour period. Susquehanna's Sam Poser think the retailer has a distinct advantage going forward, with most of its locations in rural areas or off-mall.—Bob McGee Retailers See Casual Athletic On Top EARNINGS REPORT footwearinsight.com June 2020 ~ Footwear Insight • 9

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