Deckers, the parent company of Hoka, reported slowing sales growth for the performance running brand — a miss that sent shares tumbling nearly 20%. Meanwhile, Swiss rival On Holding posted another strong quarter, intensifying the battle for market leadership.
Why it matters
Hoka’s explosive rise over the past five years has made it a dominant player in performance footwear. But its recent slowdown suggests a turning point, especially as competitors like On gain ground with aggressive expansion and lifestyle crossovers.
What’s happening
- Hoka’s Q4 net sales reached $586.1 million, up 10% year-over-year — its slowest growth quarter in over a year, down from 23.7% in Q3.
- Full-year sales rose 24% to $2.2 billion.
- U.S. direct-to-consumer (DTC) sales dipped slightly, with wholesale leading growth.
- International revenue grew 39% and now accounts for 34% of Hoka’s business.
- Deckers withdrew its fiscal 2026 guidance, citing macroeconomic uncertainty and potential tariff impacts.
- Up to $150 million in new costs are expected next year, with selective price hikes planned to offset pressure.
Between the lines
Hoka remains strong overseas but faces domestic headwinds.
- Three key factors were cited for the Q4 slowdown: higher promotions on older models, in-store preference for new styles like the Bondi 9, and weak new customer acquisition.
- Consumers may be drifting toward lower-priced options, a challenge for premium brands like Hoka.
- Analysts warned Hoka’s hypergrowth phase may be over, with firms including Evercore and KeyBanc cutting ratings or price targets.
“The high growth story is behind us.” — Evercore ISI analyst note
Meanwhile, On Running is still climbing
- Q1 2025 sales rose 43.5% to CHF 726.6 million (~$801 million USD).
- DTC sales surged 45.3%, while wholesale rose 41.5%.
- On raised its full-year outlook to CHF 2.86 billion (~$3.15 billion USD), up 28%.
- Gross margins improved to 59.9%, with strong demand for the Cloudsurfer 2 and other new products.
- Net income fell 38% due to continued global investment — but investors remained bullish.
Strategic divergence
Both brands rose rapidly by disrupting traditional players, but their approaches are evolving.
- Hoka is expanding global retail, with a new flagship in Shanghai and growth across Europe.
- On is pushing hybrid lifestyle-performance products, digital growth, and urban market penetration — connecting with younger, trend-driven buyers.
What they’re saying
Deckers CEO Stefano Caroti remains confident in Hoka’s trajectory:
“We’re still in the early miles of a long-distance run.”
He noted that U.S. awareness has doubled to 50% in the past year and international markets remain a key focus.
The bottom line
Hoka is still a powerhouse in performance running — but its domestic momentum is cooling, and costs are rising. Meanwhile, On’s sharp strategy, innovation, and global appeal are giving it an edge.
The race between these two brands is far from over — but the Swiss upstart is surging at mile 20.
