- Hoka One One is the dedicated running brand of Deckers Outdoor Corporation holding company.
- In the last fiscal year, Hoka obtained impressive results that encourage us to think about a strong growth of the company.
- Investments in the sector should be very well analyzed because Adidas, the second player in the industry, is in the midst of a restructuring process.
Hoka One One, the Deckers-owned running brand, continues to break records year after year in its financial figures. This time, at the close of fiscal 2022 and 2023, it surpassed $811 million in revenues, which places the period among the most important in its history.
Analyzing segment by segment, in Hoka One One ‘s numbers it can be seen that it continues to foster the business of Deckers Outdoor Corporation. The company, which specializes in running, posted revenues of more than $1 billion (926 million euros) in the first three quarters of its fiscal year.
This represents a 66 percent year-on-year growth and the surpassing of the billion-dollar mark in revenue.
In addition, the brand has already surpassed the 890 million dollars (811 million euros) of business with which it ended the last fiscal year, which was a figure never seen before. A very important factor in this success was the good progress made in the third three months (period from September to December), in which it was able to bill 351 million dollars (319 million euros), an increase of 91 percent compared to the same period in 2021.
Deckers Outdoor’s revenue is dependent on Hoka One One
With these financial results, it can be seen that Hoka One One is the fastest growing company within the Deckers holding company and continues to gain importance in the group: in that last period it accounted for 27 percent in the total revenue figure, up from 10 percent in 2021.
With regard to the Deckers business as a whole, revenues of 1,345 million dollars (1,226 million euros) were recorded in those months, an increase of almost 14 percent.
Dave Powers, president and CEO of Deckers, noted in text accompanying the results that its brands posted another stellar three months, which saw record numbers at Hoka and its consolidated business-to-consumer business. He added that the continued strength of Deckers’ business figures so far in the current fiscal year, despite macroeconomic headwinds, are a consequence of its market management policies and long-term strategic prioritization.
The holding company believes that UGG Australia and Hoka One One are two subsidiaries that are well positioned and consistent in their respective markets, which could make them the mainstay of growth in the next two years.
The changes at Adidas may favor Hoka One One
Adidas will be restructured and, being one of the most important worldwide, this process will have implications throughout the sports fashion sector.
Competitors such as Nike, which has remained firmly in the top spot for years, may take market share away from the German-based company.
Adidas’ problems (or, more precisely, changes within the organization), moreover, may leave room for some of the startups in the market, such as Hoka One One, to do the same as Nike.
The U.S. multinational Foot Locker, which is also going through a restructuring of its own company, could be affected by the changes in Adidas, as it plans to add more items from the German brand to add sales in the coming years. This strategy is not voluntary on the part of FT, but is what it is forced to do after Nike has reduced its stock in several wholesalers during the pandemic.
According to industry experts, if the reduction in turnover that Adidas is forecasting this 2023 adds to the pressure in Mexico, Canada and the United States, it could spell big trouble for Foot Locker’s plans to expand its range of goods.
Problems at Adidas impact the entire industry
The obstacles Adidas will face in its strategy to overhaul its entire business may be compounded by another problem: Yeezys. The brand of the controversial rapper Kaney West (now called Ye) was removed from the German brand’s catalog, but the remaining stock is huge and cannot be sold under the same conditions.
The high stock and promotions of Yeezys, in addition to the drop in sales in China, affected both the German company and its biggest competitor Nike.
Finally, analysts say they have a sense that Adidas is setting the bar very low for this year in order to avoid downward revisions, as it has been all of last year.
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