You might also like
Deckers Outdoor Corporation is a global leader in the design, marketing, and distribution of innovative footwear, apparel, and accessories for both everyday casual lifestyle use and high-performance activities . The company markets its products under six proprietary brands, competing across various markets, including fashion, casual lifestyle, performance, running, and outdoor markets . Deckers' product offerings include premium footwear, apparel, and accessories, with a strong emphasis on resilience, comfort, and style .
- UGG - Offers a highly recognized line of premium footwear, apparel, and accessories, known for its resilience and broad demographic appeal .
- HOKA - Provides performance footwear with enhanced cushioning and stability, appealing to athletes and everyday users .
- Teva - Known for sport sandals and outdoor footwear, catering to active and outdoor enthusiasts .
- Sanuk - Focuses on casual shoes and sandals with an emphasis on comfort and sustainability .
- Koolaburra - Targets value-oriented consumers with casual footwear offerings .
- AHNU - Combines high-performance technology with style in its footwear products .
- With earlier wholesale shipments contributing to revenue growth in Q2, how do you anticipate this will impact your third-quarter growth, and are you concerned about potential pull-forward effects that might soften future results?
- Inventory levels increased 7% compared to last year; how are you managing the risk of excess inventory, especially considering uncertainties in consumer demand and the potential for a more promotional retail environment in the second half?
- Given the expected moderation in UGG's growth to mid-single digits after achieving 13% growth in the first half, what factors contribute to this deceleration, and could there be upside potential based on new product introductions?
- With plans to expand HOKA's distribution through opening more doors, how are you ensuring that this expansion doesn't dilute the brand's premium positioning and cannibalize existing channels?
- Considering the possibility of future tariffs not factored into your current guidance, what strategies do you have in place to mitigate potential impacts on costs and margins if tariffs are implemented?
Recent developments and announcements about DECK.
Financial Reporting
- Revenue Growth: DECK reported a 17% year-over-year increase in revenue, reaching $1.83 billion for the quarter, driven by strong performances from its UGG and HOKA brands.
- UGG revenue grew 16% to $1.24 billion, with balanced growth across direct-to-consumer (DTC) and wholesale channels.
- HOKA revenue increased 24% to $531 million, supported by controlled global growth and market share gains.
- Gross Margin: Improved to 60.3%, up 160 basis points from the prior year, driven by favorable product mix, reduced closeouts, and higher levels of full-price selling.
- Earnings Per Share (EPS): Diluted EPS rose 19% to $3, compared to $2.52 in the prior year.
- Fiscal Year 2025 Revenue Outlook: DECK raised its full-year revenue guidance to just above $4.9 billion, representing approximately 15% growth.
- UGG is expected to grow by 10%, while HOKA is projected to achieve a 24% annual growth rate.
- Gross Margin: Full-year gross margin is now expected to be at or slightly better than 57%, reflecting strong full-price selling and product mix benefits.
- Operating Margin: Anticipated to be approximately 22%, with SG&A expenses remaining at 35% of revenue.
- EPS Guidance: Increased to a range of $5.75 to $5.80 for the fiscal year.
- Brand Performance:
- UGG continues to expand beyond its traditional product categories, with strong growth in sneakers, clogs, and sandals.
- HOKA is focusing on selective and thoughtful distribution, particularly internationally, and has a robust pipeline of innovative products, including the upcoming Clifton 10 and Cielo X1 2.0.
- International Growth: DECK aims to increase international sales to 50% of total revenue over time, with strong performance in markets like Europe and Asia.
- Inventory Management: Improved inventory positioning allowed DECK to capture incremental demand in Q3, though limited inventory may constrain Q4 sales.
- Margins and Headwinds: Management acknowledged potential pressures from freight costs (150 basis points) and foreign exchange (FX) headwinds in Q4 but emphasized the strength of its brands and disciplined marketplace management.
- Wholesale and DTC Channels: HOKA’s wholesale expansion in FY 2025 contributed to growth, but no significant increase in wholesale door count is planned for FY 2026.
- Competitive Landscape: HOKA remains competitive with innovative products like the Bondi 9 and Cielo X1 2.0, which are expected to drive future growth.
- Revenue: Increased by 17% year-over-year to a record $1.83 billion.
- Diluted Earnings Per Share (EPS): Increased by 19% to a record $3.00.
- Gross Margin: Improved to 60.3%, up from 58.7% in the same period last year.
- Operating Income: Rose to $567.3 million, compared to $487.9 million in the prior year.
- UGG®: Net sales increased by 16.1% to $1.244 billion.
- HOKA®: Net sales surged by 23.7% to $530.9 million.
- Teva®: Net sales decreased by 6.0% to $24.1 million.
- Other Brands: Net sales declined by 16.6% to $28.0 million.
- Domestic Sales: Increased by 11.5% to $1.169 billion.
- International Sales: Grew by 28.5% to $657.9 million.
- Revenue Growth: Raised to approximately 15%, reaching $4.9 billion .
- Diluted EPS: Updated to a range of $5.75 to $5.80 .
- Operating Margin: Expected to be approximately 22%.
- Gross Margin: Anticipated to be at or slightly better than 57%.
- During the quarter, Deckers repurchased approximately 275,000 shares of its common stock for a total of $44.7 million.
- The UGG® brand continues to experience strong global demand, while HOKA® is scaling through innovative performance products.
- The company has maintained its commitment to high operating margins and consistent revenue growth, marking its fifth consecutive year of mid-teens or higher growth.
Earnings Call
Deckers Outdoor Corporation (DECK) recently released its earnings call transcript for the third quarter of fiscal year 2025, highlighting record-breaking performance and providing updates on its financial outlook and strategic initiatives. Below is a summary of the key points:
Revenue and Profit Performance
Management’s Forward Guidance
Strategic Initiatives and Market Conditions
Analyst Questions and Management Responses
Key Takeaways
DECK’s record-breaking quarter underscores the strength of its UGG and HOKA brands, disciplined marketplace management, and focus on long-term growth. While Q4 may face some headwinds, the company remains confident in its ability to deliver sustainable growth and profitability.
For further details, DECK’s full earnings call transcript provides additional insights into its financial performance and strategic priorities.
Earnings Report
Deckers Brands (DECK) Third Quarter Fiscal Year 2025 Earnings Results
Deckers Brands has released its financial results for the third quarter of fiscal year 2025, ending December 31, 2024. Below are the highlights:
Key Financial Metrics
Brand Performance
Geographical Performance
Updated Full-Year Guidance for Fiscal Year 2025
Capital Allocation
Conference Call Details
Deckers will host a conference call on January 30, 2025, at 4:30 PM ET to discuss these results. A replay will be available for 30 days on their investor relations website.
Significant Trends
For more details, visit the Deckers Brands investor relations page.
Sources: ,