The Popularity of Hoka and Ugg Provides Deckers With a Competitive Edge

We rate Deckers as a narrow moat company based on a brand intangible asset. Our moat rating is based on the brand strength of Ugg (52% of fiscal 2024 sales) and Hoka (42%). They have powered the firm to four consecutive years of double-digit sales growth, and we forecast a 15% increase in fiscal 2025. Specifically, we project Deckers’ total sales to reach $4.9 billion, up from less than $2 billion before fiscal 2019. Its profitability has also expanded, with annual operating margins exceeding 20%, up from around 9%-12% (adjusted) in fiscal years 2015-18.