International Growth Opportunities
Q: How are you approaching UGG and HOKA's international growth and margin potential?
A: Deckers sees significant international opportunities for both UGG and HOKA, aiming for international growth to outpace the U.S. over time. Currently, one-third of their business is international, with 50% from Europe and 35% from Asia Pacific. They are investing in building brand awareness, selectively expanding distribution with key partners, and accelerating growth internationally. While FY24 saw extraordinary gross margin expansion, they expect margins to normalize in FY25 but remain strong.

HOKA's DTC and Wholesale Strategy
Q: How should we think about HOKA's wholesale growth versus DTC growth?
A: HOKA continues to experience healthy demand from wholesale partners but is keeping wholesale channels tight to drive more revenue to DTC, which is expected to grow faster than wholesale. They plan to open select doors with strategic partners, focusing on international markets. Recent product launches like Skyward X are performing beyond expectations, further bolstering DTC growth.

UGG's Growth Outlook
Q: What gives you confidence in mid-single-digit growth for UGG after a big year?
A: Confidence stems from strong demand among 18- to 24-year-old consumers, the success of reimagined classic styles, and a healthy full-price business with less markdowns. UGG saw an 18% revenue increase despite low single-digit unit growth, indicating strong pricing power. They expect continued growth in DTC and are optimistic about international expansion.

DTC Profitability and Mix Shift
Q: Is the high DTC profitability sustainable, and will the margin mix shift continue?
A: While FY24 benefited from exceptional gross margins due to full-price selling and a channel mix shift to DTC, they expect some normalization in FY25. However, DTC remains highly profitable, and they aim to increase its proportion over time, though not at the same pace as in FY24 due to strategic wholesale expansion.

Product Innovation and Launch Strategy
Q: How are you approaching HOKA's product launches and catering to new consumers?
A: HOKA prioritizes its performance business while welcoming new consumers adopting the brand for lifestyle use. They continue to innovate with key products like the Bondi and Clifton, and have significant launches planned, including a new trail franchise and the Skyflow run specialty exclusive. They believe running is becoming the new streetwear, and they'll capitalize on this trend while maintaining performance integrity. ,

SG&A Investment and Reinvestment
Q: Where are you in the SG&A reinvestment cycle, and will you reinvest upside?
A: SG&A as a percentage of revenue is expected to remain flat in FY25 after prior deleverage, reflecting ongoing investments in talent, infrastructure, and distribution to support growth. They are carefully managing expenses to align with growth and will continue to monitor opportunities for reinvestment if revenues exceed expectations.

Impact of Prior Year Benefits on Guidance
Q: Are you guiding differently this year after outperforming prior guidance?
A: They acknowledge that the benefits experienced in FY24, such as full-price selling, price increases, and a scarcity model driving DTC traffic, may not repeat at the same level in FY25. The current guidance reflects anticipation of a more normalized environment without the same level of favorable factors. They are cautious due to uncertainties in the promotional landscape.

Meeting Unfulfilled UGG Demand
Q: How does unfilled UGG demand from last year affect this year's outlook?
A: Some of the demand lost in December due to stockouts was captured in Q4 as inventory levels improved. While there's opportunity this year, the environment remains challenging. They plan to maintain high levels of full-price sales without new price increases and will strategically manage wholesale and DTC channels. Comping an 18% growth is challenging, but they are optimistic about their product assortment.

Breakdown of Q4 Wholesale and DTC by Brand
Q: Can you provide Q4 wholesale and DTC figures by brand?
A: In Q4 FY24, global wholesale and distributor combined sales were approximately $139 million for UGG, $350 million for HOKA, $46 million for Teva, and about $5 million for the other brands.

UGG Classics vs New Styles Growth
Q: How is UGG balancing growth between classic styles and new products?
A: Classics remain a steady part of UGG's business at around 25-30%, with consistent sell-through and margins. Growth is driven by reimagined classics and new styles resonating with younger consumers. They have a strong pipeline of innovative products, including hybrid slipper/sandal models, and see excitement in the men's segment as well.