The sale of men’s shoes by UGG grew by 20% in the last quarter (July to September 2021). An exploit that explains the good trend of the brand (+8%), which is working towards becoming a lifestyle brand and conquer Europe. A market, the latter, where “demand is higher than the supply (due to supply chain issues), to the point that the growth performance we hoped to obtain is at risk”. These are the words of David Powers, CEO of Deckers Brand (group that owns UGG), which has made 721.9 million USD in sales in the quarter and grew and equivalent of 15.8%.
UGG’s performance
UGG’s growth and strategy were at the center of the conference with analysts, together with the interruptions suffered by the supply chain. “UGG continued to diversify its product portfolio and further establishing itself as a globally relevant lifestyle brand.”, said Mr. Powers. “Another area of strength this year has been men’s footwear, which increased revenue north of 20% in the second quarter”, points out the CEO, citing the success of the Tasman line and the good performance of the leather apparel collection. Deckers’ CEO also highlighted how UGG’s success, after the US, is reaching Europe thanks to young consumers. Lastly, he announced a price increment for Fall 2022.
Supply chain
The hottest topic though remains a different one: Supply chains and the related issues. “Starting with footwear production, I can confirm the majority of our products are produced in Vietnam”, says the CFO Steven J. Fasching, explaining that only 10% of production comes from southern Vietnam, the area most impacted by the pandemic. “We do not expect factory shutdowns that occurred in the second quarter to cause a material negative top line effect on our full year fiscal 2022 guidance”. Mainly because Deckers is investing in the (forced) diversification of its supply chain. The group stated there are no problems tied to raw materials. Specifically, ovine leather, which characterizes UGG’s products, says Fasching, isn’t suffering from price oscillations.
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