Deckers Outdoor Corporation DECK continues to achieve strong financial growth, driven by the success of UGG and HOKA, international expansion, and an increasing focus on direct-to-consumer (DTC) sales. The company’s disciplined inventory management and strong brand equity support sustained demand and profitability.
Moreover, investments in digital sales, omnichannel capabilities and loyalty programs enhance customer engagement, while international markets, particularly in high-growth regions, present significant opportunities. Deckers has been committed to innovation, expanding its product offerings across lifestyle and performance footwear. With a solid financial position and an optimistic outlook, the company is well-positioned for long-term success.
Deckers' Strong Brand Performance & DTC Strength
DECK continues to strengthen its brand portfolio through innovative product development, optimized distribution and global expansion. The growing popularity of UGG and HOKA, combined with a diversified product mix, has driven strong financial results, including record-breaking sales in the third quarter of fiscal 2025.
UGG maintains its dominance in the premium lifestyle footwear market, while HOKA is rapidly gaining traction in high-performance athletics. The company’s ability to sustain full-price sell-through highlights its strong brand equity and disciplined inventory management. In the fiscal third quarter, HOKA and UGG achieved impressive year-over-year sales growth of 23.7% and 16.1%, respectively, reinforcing Deckers’ position in the footwear industry.
A key driver of DECK's success is the rapid expansion of its DTC business, which enhances brand control, improves customer engagement and drives higher-margin sales. DTC net sales rose 17.9% year over year to $1.01 billion in the fiscal third quarter, with comparable net sales increasing 18.3%.
The company has steadily expanded its DTC penetration, benefiting from strong digital sales and growth of flagship stores. Investments in omnichannel capabilities, e-commerce enhancements and loyalty programs like UGG Rewards significantly strengthened customer acquisition and retention, ensuring sustained demand and deeper brand connections.
International Expansion - A Major Driver for DECK
International markets are playing an increasingly important role in driving the performance, particularly for HOKA, which continues to see strong adoption worldwide due to increasing brand awareness and carefully managed wholesale expansion.
UGG’s diversification into new product categories and international markets solidified its position. The company is also focusing on high-potential regions such as China, where targeted growth efforts present a significant opportunity for long-term revenue acceleration.
Product Innovation - A Key Pillar of Deckers
DECK’s commitment to innovation continues to be a key factor in maintaining its competitive edge. HOKA’s latest product launches, including the Bondi 9 and Cielo X1, reinforce its leadership in the performance footwear segment, while UGG is expanding beyond core winter products into sneakers, hybrid footwear and men’s fashion.
The company’s ability to successfully introduce and scale new product categories highlights its innovation strength, positioning it for continued success.
DECK’s Financial Strength & Shareholder Value
Deckers maintains a strong financial position, supported by a debt-free balance sheet, substantial cash reserves and disciplined capital allocation. As of Dec. 31, 2024, the company held $2.24 billion in cash and cash equivalents. In the fiscal third quarter, it repurchased approximately 275,000 shares for $44.7 million, with $640.7 million remaining under its share repurchase authorization.
The company’s ability to generate significant cash flow allows it to support ongoing share repurchases and other growth initiatives, reinforcing investor confidence.
Deckers’ Promising Outlook for FY25
DECK’s expansion efforts have played a crucial role in driving its strong financial performance. The company, which shares space with Skechers SKX, Urban Outfitters URBN and Abercrombie ANF, expects fiscal 2025 total revenues to grow 15% year over year to $4.9 billion, with HOKA rising 24% and UGG up 10%. This marks an upward revision from the previous forecast of $4.8 billion.
The company also anticipates an improvement in the gross margin, expecting it to reach or slightly exceed 57% compared with the prior mentioned 55-55.5%. The current view suggests an expansion from the gross margin of 55.6% registered last year. Additionally, management raised its fiscal 2025 earnings outlook to $5.75-$5.80 per share from the $4.86 reported in the previous year and an earlier forecast of $5.15-$5.25.
Synopsis of Other Stocks
Skechers aims to continue expanding its direct-to-consumer segment and bolstering international sales growth. The company plans to invest in opening stores, enhancing its omni-channel capabilities and constructing a second distribution center in China.
These initiatives align with its long-term growth strategy, and focus on maximizing operational efficiency and customer reach. Skechers expects fiscal 2025 sales between $9.70 billion and $9.80 billion, suggesting a rise from the $8.97 billion recorded in 2024. It predicts earnings per share between $4.30 and $4.50, whereas it registered $4.16 in 2024.
Urban Outfitters' strong fourth-quarter fiscal 2025 performance paves the way for continued growth in fiscal 2026. The company projects mid-single-digit total sales growth for both the first quarter and fiscal 2026, supported by steady retail segment performance. Free People and Anthropologie expect positive sales momentum, whereas Nuuly anticipates double-digit revenue growth, driven by a rising subscriber base.
The wholesale segment is also set to expand, with notable growth in the fiscal first quarter. The gross margin is expected to improve, benefiting from reduced markdowns, along with efficiencies in occupancy and delivery expenses. Urban Outfitters intends to invest $240 million in capital expenditure, with 50% allocated to retail store expansion, 25% dedicated to technology and logistics, and the remaining 25% for home office growth.
Abercrombie is on track to achieve its fiscal 2025 target of demonstrating sustainable, profitable growth. The company expects to continue benefiting from strength in its brands, driven by its focus on delivering high-quality, on-trend assortments for new and retained customers across regions and brands. It has also been focused on making investments across stores, digital and technology, which are slated to aid the company in the long term.
Backed by the strong fourth-quarter fiscal 2024 results, management provided first-quarter and fiscal 2025 views. Net sales are projected to rise 4-6% in the fiscal first quarter from the $1.02 billion recorded in the year-ago period. For fiscal 2025, the company expects year-over-year sales growth of 3-5% from the $4.95 billion registered last year. This upside is likely to be backed by growth across regions and brands.
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