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Why Shares of Deckers Outdoor Jumped 12.6% in December

What happened

Shares of Deckers Outdoor (NYSE: DECK) rose 12.6% in December, according to data provided by S&P Global Market Intelligence, but it was part of a larger rally in its stock that began back in May 2020.

So what

Although retail was decimated by the COVID-19 pandemic, consumers chose to spend more time doing things outdoors. Healthy leisure activities became the norm for many, and that sparked sales of Deckers products, particularly its Hoka One One brand of running shoes.

Hoka One One running shoes. Image source: Deckers Outdoor.

While Ugg footwear remains the apparel company's biggest brand, in Deckers' fiscal 2021 second quarter, which ended in September, it was Hoka One One that saw sales run 83% higher for the period, an acceleration from the 37% gain it saw in the fiscal first quarter.

CEO Dave Powers said, "Our brands are operating from a position of strength, and while we continue to navigate the challenges of a global pandemic, the demand for our brands combined with our strong operating model and healthy balance sheet leave Deckers well positioned for the long-term."

DECK data by YCharts.

Now what

Apparel companies have been one of the worst-hit sectors of the economy during the coronavirus outbreak. According to spending patterns analyzed by cash-back app Ibotta, apparel purchases during the pandemic plunged 37%, suggesting that because Deckers Outdoor was able to see such phenomenal growth nonetheless, it should be well positioned for the coming year.

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Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


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