Deckers Brands raised its outlook for the year after reporting results for the fiscal first quarter ended June 30 that surpassed analyst targets. Direct-to-consumer (DTC) growth net sales increased 35.3 percent to offset a slight wholesale decline.¬†Among major brands, sales of Hoka jumped 27.4 percent while Ugg’s sales decreased 6.0 percent.

EPS in the quarter was $2.41, 28 cents better than the consensus analyst estimate of $2.13. Revenue for the quarter came in at $676 million versus the consensus estimate of $661.28 million.

“Deckers begins fiscal year 2024 in a position of strength, accelerating towards our outlook for the full year, which has been raised to reflect Hoka brand momentum,” said Dave Powers, president and chief executive officer. “We remain dedicated to delivering results in alignment with our strategic focus to grow DTC and build our presence within international markets. Combined with our disciplined brand marketplace management and nimble operating model, this approach underscores our confidence to achieve our increased full-year outlook and drive long-term success for our brands.”

First Quarter Fiscal 2024 Financial Review
(Compared to the Same Period Last Year)

  • Net sales increased 10.0 percent to $675.8 million compared to $614.5 million. On a constant-currency basis, net sales increased 11.1 percent;
  • By channel, wholesale net sales were $425.4 million compared to $429.4 million, down 0.9 percent. DTC net sales increased 35.3 percent to $250.4 million compared to $185.1 million. DTC’s comparable net sales increased 33.4 percent;
  • By geography, domestic net sales increased 9.1 percent to $419.5 million compared to $384.5 million, and International net sales increased 11.4 percent to $256.3 million compared to $229.9 million;
  • Gross margin was 51.3 percent compared to 48.0 percent;
  • SG&A expenses were $275.7 million compared to $238.4 million;
  • Operating income was $70.7 million compared to $56.3 million; and
  • Diluted earnings per share were $2.41 compared to $1.66.

First Quarter Fiscal 2024 Brand Summary
(Compared to the Same Period Last Year)

  • Hoka brand net sales increased 27.4 percent to $420.5 million compared to $330.0 million.
  • Ugg brand net sales decreased 6.0 percent to $195.5 million compared to $207.9 million.
  • Teva brand net sales decreased 18.8 percent to $48.4 million compared to $59.6 million.
  • Sanuk brand net sales decreased 32.3 percent to $9.6 million compared to $14.2 million.
  • Other brands, primarily composed of Koolaburra, net sales decreased 33.9 percent to $1.8 million compared to $2.7 million.

Balance Sheet
(June 30, 2023, as compared to June 30, 2022)

  • Cash and cash equivalents were $1.047 billion compared to $695.2 million.
  • Inventories were $740.6 million compared to $839.5 million.
  • The company had no outstanding borrowings.

Stock Repurchase Program
During the first quarter, the company repurchased approximately 52 thousand shares of its common stock for a total of $25.5 million at a weighted average price paid per share of $485.95. As of June 30, 2023, the company had approximately $1.331 billion remaining under its stock repurchase authorization.

Full Fiscal Year 2024 Outlook for the Twelve Month Period Ending March 31, 2024
The company’s full fiscal year 2024 outlook is forward-looking in nature, reflecting our expectations as of July 27, 2023, and is subject to significant risks and uncertainties that limit our ability to accurately forecast results. This outlook assumes no meaningful changes to the company’s business prospects or risks and uncertainties identified by management that could impact future results, which include but are not limited to supply chain disruptions, constraints and related expenses; labor shortages; changes in economic conditions including foreign currency fluctuation, inflationary pressures, consumer confidence and discretionary spending; and geopolitical tensions.

  • Net sales are now expected to be approximately $3.980 billion. Previous guidance called for sales of approximately $3.950 billion;
  • Gross margin is still expected to be approximately 52 percent;
  • SG&A expenses as a percentage of sales are still projected to be approximately 34 percent;
  • Operating margin is still expected to be approximately 18 percent;
  • Effective tax rate is still expected to be approximately 22 percent to 23 percent;
  • Diluted earnings per share is now expected to be in the range of $21.75 to $22.25. Previous guidance called for EPS in the range of $21.10 to $21.60; and
  • The earnings per share guidance does not assume any impact from potential future share repurchases.

Photo courtesy Hoka