• Revenue: Increased 20% to $1.3 billion.

• Gross Margin: 55.9%, up 250 basis points from last year.

• Diluted Earnings Per Share: Increased 39% to $1.59.

• HOKA Revenue: Increased 32% in the first half, reaching $2 billion over the trailing 12 months.

• UGG Revenue: Increased 13% in the first half.

• International Revenue: Increased 28% for the total company.

• Direct-to-Consumer (DTC) Revenue: Increased 22% in the first half.

• Wholesale Revenue: Increased 20% versus last year.

• Cash and Equivalents: $1.23 billion as of September 30, 2024.

• Inventory: $778 million, up 7% from last year.

• Share Repurchase: $104 million worth of shares repurchased at an average price of $152.09.

• Fiscal Year 2025 Revenue Guidance: Increased to approximately $4.8 billion, up 12% from last year.

• Fiscal Year 2025 Gross Margin Guidance: Expected to be in the range of 55% to 55.5%.

• Fiscal Year 2025 Diluted EPS Guidance: Increased to $5.15 to $5.25.

• Warning! GuruFocus has detected 5 Warning Signs with SAM.

Release Date: October 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Deckers Outdoor Corp (NYSE:DECK) reported a 20% increase in revenue for the second quarter, reaching $1.3 billion.

• The HOKA brand achieved a significant milestone by surpassing $2 billion in revenue over the trailing 12-month period.

• Gross margins improved to 55.9%, up 250 basis points from the previous year.

• Diluted earnings per share increased by 39% to $1.59, compared to $1.14 last year.

• The company raised its full-year revenue growth expectations to approximately 12%, reflecting strong demand for its brands.

Negative Points

• The company anticipates a more promotional environment in the second half of the fiscal year, which could impact margins.

• There are concerns about macroeconomic pressures, including potential recessionary impacts and inflationary pressures.

• Inventory levels increased by 7% compared to the same period last year, which could pose a risk if demand slows.

• The company faces potential headwinds from increased freight costs, which have already impacted gross margins.

• There is uncertainty regarding tariffs and geopolitical tensions, which could affect future financial performance.

Q & A Highlights

Q: Can you discuss the impact of higher-priced HOKA styles like Skyward X and Cielo X1 on top-line growth and brand expansion? A: Stefano Caroti, President and CEO, noted that Pinnacle products like Cielo X1 and Skyward X have exceeded expectations, breaking the $200 price point. Steve Fasching, CFO, added that these styles are crucial for market penetration and distribution expansion, improving both top-line growth and margin profiles.