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01/11 03:18
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals strong financial performance with 16% revenue growth, improved margins, and a 30% EPS increase. The shareholder return plan is robust with a significant share repurchase program. Despite some U.S. DTC pressure and tariff concerns, international growth and wholesale expansion are promising. Positive guidance and strategic initiatives like product launches and a balanced DTC-wholesale strategy further support a positive sentiment. The market is likely to react positively, especially with optimistic future revenue guidance.
Revenue $4,986,000,000 (16% increase year-over-year) driven by HOKA's incremental $426,000,000 revenue growth and broad-based UGG growth.
Gross Margin 57.9% (230 basis points increase year-over-year) primarily due to favorable brand and product mix shifts and higher margin products within UGG.
Operating Margin 23.6% (200 basis points increase year-over-year) reflecting improvement in gross margin and exceptionally low levels of promotional activity.
Earnings Per Share (EPS) $6.33 (30% increase year-over-year) due to record performance and lower share count from share repurchase activity.
Cash and Equivalents $1,900,000,000 at year-end, with $567,000,000 worth of shares repurchased during the year.
Inventory $495,000,000 (4% increase year-over-year) indicating a strategic increase to mitigate potential tariff impacts and support warehouse transitions.
SG&A Expenses $1,710,000,000 (17% increase year-over-year) representing 34.2% of revenue, with increased investments in marketing and talent.
Fourth Quarter Revenue $1,020,000,000 (6% increase year-over-year) driven by HOKA and UGG, with HOKA seeing a 104% increase.
Fourth Quarter Gross Margin 56.7% (50 basis points increase year-over-year) due to higher levels of full price selling for UGG.
Fourth Quarter SG&A $406,000,000 (39.7% of revenue) down 150 basis points year-over-year due to favorable foreign currency exchange rate impacts.
HOKA Revenue Growth: Global revenue for HOKA increased 24% to $2,200,000,000, with DTC revenue rising 23% and international revenue expanding 39%.
UGG Revenue Growth: UGG's global revenue increased 13% to $2,500,000,000, with strong growth across channels and regions.
New Product Launches: HOKA introduced new models including Bondi 9 and Clifton 10, with positive consumer feedback.
HOKA Experience Center: Opened a flagship store in Shanghai, featuring a high-tech testing lab and community hub.
Market Expansion: HOKA's international revenue now represents 34% of total revenue, up from 30% last year.
Brand Awareness: Consumer awareness of HOKA in the U.S. reached 50%, a 25% increase from last year.
Wholesale Expansion: HOKA is expanding its wholesale presence, with strong sell-through rates and new partnerships.
Operational Efficiency: Gross margin improved to 57.9%, with operating margins increasing to 23.6%.
Inventory Management: Inventory increased by 4% to $495,000,000, managed to support growth and mitigate tariff impacts.
Strategic Focus: Deckers aims for a balanced channel mix of 50% DTC and 50% wholesale.
Long-term Strategy: Focus on consumer-first approach, brand-led growth, and international market expansion.
Macroeconomic Environment: There is significant uncertainty due to shifting U.S. trade policy, which is expected to impact business in fiscal 2026.
Tariff Costs: Anticipated increase of up to $150 million in cost of goods sold due to tariffs, with potential demand erosion from price increases and general softness in consumer spending.
Supply Chain Challenges: Less than 5% of footwear production comes from China, with the majority sourced from Southeast Asia, primarily Vietnam. The company is monitoring tariff policy changes and evaluating mitigation strategies.
Competitive Pressures: There is concern about potential changes in competitive dynamics in the trail and road category, particularly in the U.S. market.
Consumer Behavior: There is a noted softness in consumer spending, particularly in the U.S., which may affect demand.
Inventory Management: The company is intentionally increasing inventory levels to mitigate potential tariff impacts and manage a transition in distribution centers.
DTC Performance: The U.S. direct-to-consumer (DTC) segment is experiencing pressure due to model changeovers and increased competition, impacting growth rates.
Wholesale Expansion: The company is strategically expanding wholesale distribution, which may temporarily pressure DTC performance but is seen as a long-term growth opportunity.
Long-term Strategy: Deckers Brands remains committed to a consumer-first mindset, focusing on brand-led growth through awareness-building activations and product innovation.
HOKA Brand Growth: HOKA is expected to continue as the fastest-growing brand, with a focus on expanding market share through innovation and increased brand awareness.
UGG Brand Growth: UGG aims to capture growth from male consumers and increase year-round product offerings to enhance market share.
Wholesale Expansion: Deckers plans to strategically expand wholesale distribution to increase brand presence and consumer engagement.
International Growth: International markets are expected to outpace U.S. growth, with a focus on expanding HOKA and UGG's presence globally.
Product Innovation: Continued investment in product innovation is a priority, with new models and technology upgrades planned for both HOKA and UGG.
Revenue Expectations: For Q1 FY26, revenue is expected to be between $890 million to $910 million, with HOKA growing at least low double digits and UGG at least mid single digits.
Gross Margin Outlook: Gross margin is expected to decline approximately 250 basis points due to increased freight costs and promotional activity.
SG&A Expenses: SG&A is expected to increase slightly faster than revenue as investments in brand building continue.
Tariff Impact: An increase of up to $150 million in cost of goods sold is anticipated due to tariffs, with potential demand erosion.
Capital Expenditures: Planned capital expenditures for FY26 are in the range of $120 million to $130 million.
Share Repurchase Authorization: The Board approved an increase in share repurchase authorization to $2.5 billion, reflecting confidence in the strategic plan.
Share Repurchase Program: In fiscal year 2025, Deckers Brands repurchased approximately $567,000,000 worth of shares, which included repurchasing 3,800,000 shares at a weighted average price of $149.21 per share. In the fourth quarter alone, they repurchased approximately $266,000,000 worth of shares at a weighted average price of $149.62. As of May 9, 2025, the company had approximately $291,000,000 remaining under its stock repurchase authorization. The Board of Directors approved an increase of $2,250,000,000 on top of the existing stock repurchase authorization, bringing the total to $2,500,000,000.
The earnings call reveals strong financial performance with a 9% revenue increase and a 14% EPS growth, driven by HOKA and UGG brands. Despite tariff pressures, gross margins improved. Share repurchases indicate confidence in stock value. Positive guidance for HOKA and UGG, along with strategic inventory management and balanced DTC and wholesale growth, suggests a favorable outlook. While tariffs and consumer demand fluctuations pose challenges, the company's proactive measures and strong brand positioning support a positive sentiment, likely resulting in a 2% to 8% stock price increase over the next two weeks.
The earnings call reveals a mixed outlook. Positive aspects include strong revenue growth, brand initiatives, and stock repurchase plans. However, the lack of formal guidance, expected margin decline, and increased costs due to tariffs temper enthusiasm. The Q&A section highlights innovation and international growth, but concerns about tariffs and promotional activity impact sentiment. Overall, the balanced positive and negative factors suggest a neutral short-term stock price movement.
The earnings call reveals strong financial performance with a 16% revenue increase and a 30% EPS increase, supported by strategic share repurchases. Despite some concerns about tariffs and economic conditions, the company maintains optimistic growth expectations for its brands, particularly HOKA. The substantial increase in share repurchase authorization further boosts investor confidence. However, management's lack of clarity on specific growth expectations and the impact of tariffs tempers the sentiment slightly. Overall, the positive financial metrics and shareholder return plans outweigh the concerns, suggesting a positive stock price movement.
The earnings call reveals strong financial performance with 16% revenue growth, improved margins, and a 30% EPS increase. The shareholder return plan is robust with a significant share repurchase program. Despite some U.S. DTC pressure and tariff concerns, international growth and wholesale expansion are promising. Positive guidance and strategic initiatives like product launches and a balanced DTC-wholesale strategy further support a positive sentiment. The market is likely to react positively, especially with optimistic future revenue guidance.
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