Quarterly shoe reports: UGG on a roll, Vans not so much

Quarterly shoe reports: UGG on a roll, Vans not so much

UGG on a roll. Vans, what’s up? UGG sold around 2 billion shoes in the last financial year (+15.4% on the previous year). In the January-March 2022 period, growth came close to 25%, beating analysts’ estimates. Flattering results for the brand, which is known for its sheepskin boots, is now growing thanks to a lifestyle strategy. Opposite situation, Vans seems to have exhausted the momentum of a few years ago. So much so, that sales in the first quarter were stable year-on-year. For analysts, a decisive factor is the difficulty the brands have in the supply chain.

UGG on a roll

UGG has long set itself the goal of diversifying its product, offering to become a lifestyle brand. And it achieved record sales last financial year (April 2021-March 2022) with 1.98 billion dollars (+15.4%). All to the benefit of Deckers’ balance sheet. UGG, in fact, generates almost two-thirds of the parent company’s total revenue, which for the full year was 3.15 billion dollars, +24% on the financial year ending March 2021 and +48% on the previous one. A record.

Vans is slowing down 

Vans, on the other hand, is slowing down. Let’s start with the numbers. In the full fiscal year 2022, sales rose 20% to 3.47 billion dollars. But in VF Corp’s fourth quarter (January-March 2022), the sneakers brand’s revenue remained flat (991 million dollars). And even for the current financial year, VF Corp believes that Vans’ growth will not exceed double-digit percentages. Not surprisingly, last March, VF Corp CEO Steve Rendle called back Kevin Bailey as president of Vans. Bailey had held the same position from 2009 to 2016. The manager, WWD reports, will focus on three areas: classic models, which generate about two-thirds of the business but have lost ground since Vans diversified; the Chinese market; and brand strength, which has been damaged by the pandemic.

Supply chain issue

But the difference in the performance of the two brands may have been influenced by the supply chain. Williams Trading analyst Sam Poser points out to Footwear News that “UGG will not experience the delays that other brands are experiencing at the moment, as its periods with the highest delivery volumes are September and December”. On the other hand, Vans, which manufactures in Vietnam, is more affected by supply difficulties and sales in China threatened by the pandemic.

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