By Ananya Mariam Rajesh
(Reuters) -Deckers Outdoor shares jumped as much as 17% on Friday, after multiple brokerages raised their price targets following the company's bet on full-price sales of its hot-selling Hoka running shoes and UGG boots to raise its annual profit forecast.
The stock touched a one-month high of $980 and is on track for its best day in nine months, if gains hold. Shares of On Holding, backed by Tennis star Roger Federer, and Nike (NYSE:NKE) were up 6.2% and 1.7%, respectively.
Products from brands such as Hoka and On, like the Clifton 9 and Cloudmonster 2 which are known for their extra cushion and durability, have largely resonated with customers, mainly in the running category.
"Even in a choppier macro environment people are spending money on things they care about and these two are products that people care about," said Truist Securities analyst Joseph Civello.
Civello added Hoka has "incredibly designed shoes" with different growth opportunities as the brand has also developed a fashion-following with people interested in buying their newest color shoes.
Truist Securities increased Deckers' price target to $1,225 from $1,200, and is the highest on Wall Street.
Retailers such as Dicks Sporting Goods and Nordstrom (NYSE:JWN) have also responded by offering more shelf space for those brands while trimming down on Nike's products, which are lagging in terms of innovation and appeal to customers.
Deckers reported a nearly 30% rise in Hoka sales in the first quarter, driven by demand in wholesale channels. The UGG banner had a 14% jump in sales.
Wedbush analyst Tom Nikic wrote in a note there has been less discounting with the UGG brand and it appears to be taking a share in the sandal market.
Deckers now expects annual profit in the range of $29.75 to $30.65, compared with its previous forecast of $29.50 to $30.