Brace Yourself: Ugg Season May Be Even Bigger Than Usual This Year

his year the Ugg frenzy may be even bigger than usual.
NEW YORK, NY - SEPTEMBER 05: A view of UGG Australia at Mercedes-Benz Fashion Week Spring 2015 Collections at Lincoln Center on September 5, 2014 in New York City. (Photo by Thos Robinson/Getty Images for UGG Australia)
NEW YORK, NY - SEPTEMBER 05: A view of UGG Australia at Mercedes-Benz Fashion Week Spring 2015 Collections at Lincoln Center on September 5, 2014 in New York City. (Photo by Thos Robinson/Getty Images for UGG Australia)

Each year as the temperature dips, women across the country turn to their closets and dig their Ugg boots out of hibernation. Others head to stores to score a pair of the squat sheepskin booties in preparation for a chilly winter.

This year the Ugg frenzy may be even bigger than usual. Sales at the Ugg brand rose nearly 24 percent last quarter to $417 million, compared to $337 million for the same period the year prior, parent company Deckers reported Thursday. The spike was due to higher wholesale sales, online sales and new retail store openings worldwide.

And now, Ugg is about to enter its prime season.

"With temperatures turning cold in recent weeks, sell-through of weather boots and classics have gained pace across the majority of our markets," Deckers chief executive Angel Martinez said on a conference call with analysts on Thursday.

Ugg's upcoming product lines are "as compelling as we have ever seen for the company," Sam Poser, an analyst at Sterne Agee, wrote in a note to clients on Friday. He added that Ugg's reaping the benefits of favorable fashion trends, as shoppers search the aisles for comfy clothes like stretchy leggings and oversized sweaters.

However Ugg's holidays turn out, "Ugg Season" will remain. The annual donning of the Uggs has even made its way into memes, like "Girls be like."

Meanwhile, Ugg's plan to diversify its offerings seems to be working. Ugg is now selling more items that aren't dependent on cold weather. It launched a home goods line in October, offering an assortment of sheepskin area rugs, knit pillows and floor poufs. There's also Ugg's loungewear line, a casual clothing label. On the call, Martinez said that Ugg's home and loungewear businesses are still "small but burgeoning" and early results have been "very strong." Ugg will be pushing both lines hard through the holidays.

In an attempt to tell customers Ugg sells more than just shearling boots, the brand launched an advertising campaign in August with the tagline "THIS IS UGG," featuring sketch artist Langley Fox Hemingway and New England Patriots quarterback Tom Brady.

But until those lines get bigger, Ugg remains a slave to the elements. According to a report from Nomura Securities, Deckers is the best example of a company that's exposed to weather risk, something it could never hope to control. So far, the climate has treated Deckers, which also owns footwear brands Teva and Sanuk, quite well this year.

"Despite the mild weather conditions over the last two winters, this year was more seasonably cool and snowy in many parts of the U.S., which had a substantially large impact on companies with a great deal of cold weather product including Deckers," Nomura analyst Bob Drbul wrote in the report.

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