Deckers Brands slightly raised its EPS guidance for its fiscal year after reporting earnings and sales in the fiscal first quarter ended June 30 topped Wall Street’s targets. The gains were led by an outperformance by Hoka, with sales up 54.9 percent year-over-year.

“Fiscal year 2023 is off to a solid start, with Hoka driving strong growth, propelling the brand to eclipse the billion-dollar milestone over the trailing twelve-month period,” said Dave Powers, President and CEO. “The Hoka brand’s speed to achieve this feat is exciting, especially as the brand’s increasing penetration to our portfolio benefits Deckers’ overall quarterly financial and operational performance. In addition, our Board’s recent approval of a significantly increased share repurchase authorization shows a great deal of confidence in our long-term strategic plan and the opportunities that lie ahead.”

First Quarter Fiscal 2023 Financial Review
(compared to the same period last year)

  • Net sales increased 21.8 percent to $614.5 million compared to $504.7 million. On a constant-currency basis, net sales increased 23.5 percent;
  • Gross margin was 48.0 percent compared to 51.6 percent;
  • SG&A expenses were $238.4 million compared to $198.7 million;
  • Operating income was $56.3 million compared to $61.8 million; and
  • Diluted earnings per share were $1.66 compared to $1.71.

Revenue for the quarter at $614.5 million topped the consensus estimate of $567.34 million. EPS of $1.66 was well above the average analyst estimate of $1.25. 

First Quarter Fiscal 2023 Brand Summary
(compared to the same period last year)

  • Hoka brand net sales increased 54.9 percent to $330.0 million compared to $213.1 million;
  • Ugg brand net sales decreased 2.4 percent to $207.9 million compared to $213.0 million;
  • Teva brand net sales increased 2.0 percent to $59.6 million compared to $58.5 million;
  • Sanuk brand net sales decreased 5.9 percent to $14.2 million compared to $15.0 million; and
  • Other brands, primarily composed of Koolaburra, net sales decreased 45.3 percent to $2.7 million compared to $5.0 million.

Balance Sheet
(June 30, 2022 as compared to June 30, 2021)

  • Cash and cash equivalents are $695.2 million compared to $956.7 million;
  • Inventories, which include amounts in-transit, are $839.5 million compared to $457.7 million; and
  • The company has no outstanding borrowings.

Stock Repurchase Program
During the first quarter, the company repurchased approximately 384 thousand shares of its common stock for a total of $100.0 million at an average price paid per share of $260.12. As of June 30, 2022, the company had $354.0 million remaining under its stock repurchase authorization.

In addition, the Board of Directors has approved an increase of $1.2 billion to the company’s stock repurchase authorization, which brings the company’s total outstanding authorization to approximately $1.5 billion.

Full Fiscal Year 2023 Outlook
(for the twelve-month period ending March 31, 2023)

  • Net sales are still expected to be in the range of $3.45 billion to $3.50 billion;
  • Gross margin is still expected to be approximately 51.5 percent;
  • SG&A expenses as a percentage of sales are still projected to be approximately 34 percent;
  • Operating margin is still expected to be in the range of 17.5 percent to 18.0 percent;
  • Effective tax rate is still expected to be approximately 22 percent to 23 percent;
  • Diluted earnings per share are now expected to be in the range of $17.50 to $18.35, up from a range of $17.40 to $18.25 previously; and
  • The earnings per share guidance does not assume any impact from additional share repurchases.

Photo courtesy Hoka