Deckers Brands reported earnings in the fiscal first quarter that ended June 30 coming in well ahead of analyst targets. This was boosted by a spike in gross margins and 22.1 percent sales growth. Hoka again led the top-line gains, with sales jumping 29.7 percent. Ugg’s sales gained 14.0 percent.

Earnings came in at $4.52 versus Wall Street’s consensus target of $3.52. Sales of $825.3 million topped analysts’ consensus target of $805.5 million. Deckers slightly lifted its EPS guidance for the year.

“As this is my last quarter to report as CEO, I am pleased to share these strong results to kick off fiscal year 2025,” said Dave Powers, president and chief executive officer of Deckers. “Hoka and Ugg continue to drive robust full-price demand in the global marketplace by delivering compelling product that consumers love. Deckers has an exciting future ahead as Stefano transitions into his new role as CEO next week.”

“Fiscal year 2025 is off to a great start, with Hoka and Ugg delivering fantastic first-quarter results that have contributed to our increased outlook for the full fiscal year,” said Stefano Caroti, chief commercial officer and incoming president and chief executive officer. “I’m excited by the opportunity to now lead Deckers and its iconic brands, with the support of our talented teams that remain focused on the long-term opportunities ahead for this great company.”

First Quarter Fiscal 2025 Financial Review
(compared to the same period last year)

  • Net sales increased 22.1 percent to $825.3 million compared to $675.8 million. On a constant currency basis, net sales increased 23.0 percent.
  • Channel
    • Direct-to-consumer (DTC) net sales increased 24.0 percent to $310.6 million compared to $250.4 million. DTC comparable net sales increased 21.9 percent.
    • Wholesale net sales increased 21.0 percent to $514.8 million compared to $425.4 million.
  • Geography
    • Domestic net sales increased 23.0 percent to $515.9 million compared to $419.5 million.
    • International net sales increased 20.8 percent to $309.5 million compared to $256.3 million.
  • Gross margin was 56.9 percent compared to 51.3 percent.
  • Selling, general and administrative (SG&A) expenses were $337.2 million compared to $275.7 million.
  • Operating income was $132.8 million compared to $70.7 million.
  • Diluted earnings per share was $4.52 compared to $2.41.

First Quarter Fiscal 2025 Brand Summary
(compared to the same period last year)

  • Hoka brand net sales increased 29.7 percent to $545.2 million compared to $420.5 million.
  • Ugg brand net sales increased 14.0 percent to $223.0 million compared to $195.5 million.
  • Teva brand net sales decreased 4.3 percent to $46.3 million compared to $48.4 million.
  • Sanuk brand net sales decreased 28.4 percent to $6.9 million compared to $9.6 million.
  • Other brands, primarily composed of Koolaburra, net sales increased 123.5 percent to $4.0 million compared to $1.8 million.

Balance Sheet
(June 30, 2024, as compared to June 30, 2023)

  • Cash and cash equivalents were $1.438 billion compared to $1.047 billion.
  • Inventories were $753.3 million compared to $740.6 million.
  • The company had no outstanding borrowings.

Capital Allocation
During the first fiscal quarter, the company repurchased approximately 177 thousand shares of its common stock for $152.0 million at a weighted average price paid per share of $858.79. As of June 30, 2024, the company had approximately $789.7 million remaining under its stock repurchase authorization.

After the quarter-end, the company agreed to divest the Sanuk brand, which it expects to close in August 2024.

Full Fiscal Year 2025 Outlook
(for the twelve-month period ending March 31, 2025)

  • Net sales are still expected to increase approximately 10 percent to $4.7 billion.
  • Gross margin is now expected to be approximately 54 percent.
  • SG&A expenses, as a percentage of net sales, are now expected to be in the range of 34 percent to 34.5 percent.
  • Operating margin is now expected to be in the range of 19.5 percent to 20 percent.
  • Effective tax rate is still expected to be in the range of 22 percent to 23 percent.
  • Diluted earnings per share are now expected to be in the range of $29.75 to $30.65. Deckers’ previous forecasted a range between $29.50 to $30.00.

Image courtesy Hoka