US footwear group Deckers Brands has reported record sales for the 2020 full fiscal year driven by a 58% surge in revenue at its Hoka One One brand but revenue and profit tumbled in the fourth quarter amid the Covid-19 pandemic.
For the fourth quarter ended 31 March, the maker of Ugg footwear reported a 32.9% drop in net income to US$16.1m, down from $24m a year earlier. Gross margin narrowed to 51.5% from 51.6% for the same period last year.
Deckers also recorded a 4.9% decline in net sales to $374.9m, compared to $394.1m for the same period last year. On a constant currency basis, net sales decreased by 4.5%.
Ugg brand net sales for the fourth quarter slumped 17.9% to $196.3m, compared to $239m last time. Hoka One One sales surged 51.8% to $101.9m from $67.1m last year. Teva brand revenues also increased, rising 12.5% to $59.6m from $52.9m in the prior-year period, while net sales for the Sanuk brand decreased 57.8% to $13.3m from $31.5m a year ago.
Domestic net sales fell 8.4% in the quarter to $230.8m, while international net sales increased 1.4% to $144.1m.
For fiscal year 2020, net income amounted to $276.1m, compared to $264.3m a year ago, while gross margin expanded to 51.8% from 51.5%. Net sales also increased, rising 5.6% to a record $2.13bn from $2.02bn last year. On a constant currency basis, net sales increased by 6.5%.
Ugg brand net sales decreased by 0.8% to $1.5bn, while Hoka One One sales soared 58% to $352.6m. Teva brand revenues edged up 0.4% to $138m, while sales for the Sanuk brand tumbled 38.1% to $51.2m.
Domestic net sales for the period were up 9.6% to $1.4bn, while international net sales declined 1.5% to $731m.
“Fiscal year 2020 performance was driven by the strength of our brand portfolio, fuelled by targeted investments in our key initiatives, coupled with disciplined financial management,” said CEO Dave Powers. “We expect fiscal year 2021 results to be impacted depending on the duration and severity of the Covid-19 pandemic, but our in-demand brands, omnichannel capabilities, and healthy balance sheet position us well to weather this challenging environment.”
The company did not provide full-year guidance for fiscal year 2021 and said it continues to “modify and evolve” its operations in response to the Covid-19 pandemic.
Deckers, which maintains a network of strategic sourcing partners that include material vendors and production factories, added it experienced certain disruptions to sourcing with its third-party manufacturers during the fourth quarter of fiscal year 2020.
“While these disruptions have since been mitigated, it is possible that there will be disruptions in the future,” it noted.