Financial Data and Key Metrics Changes - Revenue for Q2 2025 increased by 20% year-over-year to $1.311 billion, with gross margins at 55.9%, up from 53.4% last year [9][25][27] - Diluted earnings per share rose 39% to $1.59 compared to $1.14 in the previous year [9][27] - Cash and equivalents at the end of September 2024 were $1.23 billion, with inventory at $778 million, a 7% increase year-over-year [28] Business Line Data and Key Metrics Changes - HOKA brand revenue grew 32% in the first half, reaching $2 billion in trailing 12-month revenue for the first time [10][11] - UGG brand revenue increased by 13% in the first half, driven by strong performance in key initiatives and international markets [16][20] - Direct-to-consumer (DTC) revenue for HOKA increased by $100 million, while UGG DTC revenue grew by $25 million [21][22] Market Data and Key Metrics Changes - International revenue for HOKA grew significantly, outpacing U.S. growth, with strong performance in Europe and Asia [14][15][19] - UGG's international markets maintained high demand, with Europe showing exceptional DTC growth [18][19] - Overall, revenue growth was balanced across DTC and wholesale channels, with DTC global revenue increasing by 22% [21][22] Company Strategy and Development Direction - The company is focusing on a consumer-first mindset, brand-less philosophy, innovation, and global market expansion as guiding principles for future growth [8][9] - HOKA aims to become a leading performance athletic brand through innovation, while UGG focuses on evolving iconic franchises [32] - The company is strategically managing its marketplace to maintain strong consumer demand and market share [24][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brands' ability to capture market share despite a dynamic consumer environment [24][31] - The company anticipates a more promotional environment in the second half of the fiscal year but remains optimistic about maintaining premium pricing [20][30] - Updated guidance for fiscal year 2025 includes a revenue growth expectation of approximately 12% and an increase in diluted earnings per share to the range of $5.15 to $5.25 [29][30] Other Important Information - A six-for-one forward stock split was executed, affecting share prices and financial metrics [5] - The company has a remaining authorization of approximately $685 million for share repurchase [28] Q&A Session Summary Question: Impact of higher-priced styles on HOKA's growth - Management noted that new Pinnacle products have exceeded expectations, contributing positively to both top-line growth and brand margin profile [34][35] Question: Guidance for HOKA's growth in the second half - Management indicated that while first-half growth was strong, they expect a moderation in the second half due to earlier wholesale shipments and controlled distribution [37][39] Question: Performance in Asia, particularly China - Management reported strong performance in China despite economic challenges, with HOKA gaining market share in major races [68]

Financial Performance - Second quarter FY 2025 revenue increased 20.1% to $1.311 billion compared to $1.092 billion[2] - Diluted EPS for the second quarter FY 2025 increased 39% to $1.59 compared to $1.14[2] - FY 2025 revenue guidance raised to approximately $4.8 billion, reflecting an expected increase of about 12%[6][7] - Gross margin for the second quarter FY 2025 was 55.9%, up from 53.4% in the same period last year[2] - Direct-to-Consumer (DTC) net sales increased 19.9% to $397.7 million, with comparable DTC net sales up 17.0%[2] - International net sales increased 33.0% to $457.4 million compared to $343.9 million[2] - HOKA® brand net sales increased 34.7% to $570.9 million, while UGG® brand net sales increased 13.0% to $689.9 million[3] Shareholder Actions - The company repurchased approximately 686 thousand shares for a total of $104.3 million at an average price of $152.09 per share[5] Expenses and Liabilities - SG&A expenses for the second quarter FY 2025 were $428.2 million, compared to $358.4 million in the prior year[2] - Total current liabilities increased to $875,640 thousand from $719,993 thousand, an increase of 21.6%[19] - Trade accounts payable rose to $536,581 thousand, up from $378,503 thousand, representing an increase of 42.0%[19] - Other long-term liabilities decreased to $89,296 thousand from $94,820 thousand, a decline of 5.9%[19] Assets and Cash Position - The company had cash and cash equivalents of $1.226 billion as of September 30, 2024, compared to $823.1 million a year earlier[4] - Total current assets increased to $2,701,294 thousand as of September 30, 2024, up from $2,443,483 thousand as of March 31, 2024, representing a growth of 10.5%[19] - Cash and cash equivalents decreased to $1,225,681 thousand from $1,502,051 thousand, a decline of 18.4%[19] - Trade accounts receivable increased significantly to $537,137 thousand, up from $296,565 thousand, reflecting an increase of 81.1%[19] - Inventories rose to $777,891 thousand, compared to $474,311 thousand, marking a 64.0% increase[19] - Total assets increased to $3,398,136 thousand from $3,135,579 thousand, reflecting a growth of 8.4%[19] - Total stockholders' equity grew to $2,223,239 thousand, up from $2,107,468 thousand, indicating an increase of 5.5%[19] - Long-term operating lease liabilities decreased slightly to $209,961 thousand from $213,298 thousand, a reduction of 1.6%[19]

Core Viewpoint - Deckers Outdoor Corporation is set to announce its second-quarter fiscal 2025 earnings on October 24, with expectations of revenue growth and a positive bottom line despite market challenges [1]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for Deckers' revenues is $1.20 billion, reflecting a 9.6% increase from the previous year [1]. - The earnings per share (EPS) estimate has risen to $1.22, indicating a 7% growth year-over-year [1]. - Deckers has a trailing four-quarter earnings surprise average of 47.2%, with a 25.9% outperformance in the last reported quarter [1]. Brand Performance - The UGG brand is expected to see a 2% increase in sales, while HOKA is projected to grow by 20.9% year-over-year [3]. - Conversely, the Teva brand is anticipated to face a 3.3% decline in sales [3]. Direct-to-Consumer Strategy - Deckers is focusing on expanding its direct-to-consumer channels, with expected revenue growth of 15.8% year-over-year from this segment [4]. - Enhancements in online and in-store experiences are aimed at increasing sales volumes and capturing higher profit margins [4]. International Expansion - The company is targeting international markets, particularly in regions like China and EMEA, to boost market share and brand recognition [4]. Margin Pressures - Anticipated gross margin contraction of 180 basis points is expected due to rising costs and a shift towards a normalized promotional environment [5]. - SG&A expenses are projected to increase as a percentage of net sales, leading to a 300 basis points contraction in operating margin [5]. Earnings Prediction Model - The Zacks model indicates a likelihood of an earnings beat for Deckers, supported by a positive Earnings ESP of +2.77% and a Zacks Rank of 3 (Hold) [6].

Core Insights - Deckers (DECK) is expected to report quarterly earnings of $1.22 per share, a 7% increase year-over-year, with revenues projected at $1.2 billion, reflecting a 9.4% year-over-year increase [1] Financial Projections - The consensus estimate for 'Net sales by brand and channel- UGG brand- Total' is $628.71 million, indicating a 3% year-over-year change [2] - 'Net sales by brand and channel- Teva brands- Total' is estimated at $20.94 million, showing a decline of 2.6% year-over-year [2] - 'Net sales by brand and channel- Other brands- Total' is projected to reach $31.08 million, reflecting a 1.6% year-over-year increase [2] Brand-Specific Sales Estimates - 'Net sales by brand and channel- HOKA brand- Total' is forecasted at $516.65 million, representing a significant 21.9% increase from the prior-year quarter [3] - 'Net sales by brand and channel- Sanuk brands- Total' is expected to be $3.29 million, indicating a substantial decline of 39.1% year-over-year [3] - 'Net sales by brand and channel- Teva brands- Wholesale' is projected at $11.12 million, reflecting an 8.5% decrease from the prior-year quarter [3] - 'Net sales by brand and channel- UGG brand- Wholesale' is estimated to reach $462.97 million, indicating a 2.5% increase year-over-year [3] - 'Net sales by brand and channel- HOKA brand- Direct-to-Consumer' is expected to be $208.05 million, reflecting a 29.2% year-over-year increase [3] Additional Sales Insights - 'Net sales by brand and channel- HOKA brand- Wholesale' is projected at $305.55 million, indicating a 16.2% year-over-year increase [4] - 'Net sales by brand and channel- Teva brands- Direct-to-Consumer' is estimated at $9.78 million, reflecting a 4.5% year-over-year increase [4] - 'Net sales by brand and channel- UGG brand- Direct-to-Consumer' is expected to reach $166.72 million, indicating a 5.1% year-over-year increase [4] - 'Net sales by brand and channel- Other brands- Wholesale' is projected at $30.77 million, reflecting a 3% year-over-year increase [4] Market Performance - Over the past month, Deckers shares have returned +7.4%, outperforming the Zacks S&P 500 composite's +4.5% change [4]

Core Viewpoint - The market anticipates Deckers (DECK) will report a year-over-year increase in earnings driven by higher revenues in its upcoming earnings report for the quarter ended September 2024, with results expected on October 24 [1] Earnings Expectations - Deckers is projected to post quarterly earnings of $1.22 per share, reflecting a year-over-year change of +7% [2] - Revenues are expected to reach $1.2 billion, representing a 9.6% increase from the same quarter last year [2] Estimate Revisions - The consensus EPS estimate has been revised 0.01% higher over the last 30 days, indicating a slight bullish sentiment among analysts [3] Earnings Surprise Prediction - The Zacks Earnings ESP model shows that the Most Accurate Estimate for Deckers is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +1.12%, suggesting a likely earnings beat [4][6] - The stock currently holds a Zacks Rank of 3, indicating a neutral outlook [6] Historical Performance - In the last reported quarter, Deckers exceeded expectations by posting earnings of $0.75 per share against an expected $0.60, achieving a surprise of +25% [7] - Over the past four quarters, Deckers has consistently beaten consensus EPS estimates [7] Conclusion - While an earnings beat is anticipated, other factors may also influence stock movement, making it essential to consider the Earnings ESP and Zacks Rank before the earnings release [8]

Company Performance - Deckers (DECK) ended the recent trading session at $161.85, showing a +0.7% change from the previous day's closing price, outperforming the S&P 500's daily loss of 0.76% [1] - Over the past month, Deckers' shares gained 2.85%, which is below the Retail-Wholesale sector's gain of 3.42% and the S&P 500's gain of 4.31% [1] Upcoming Earnings - Deckers is set to release its earnings on October 24, 2024, with projected earnings per share (EPS) of $1.22, indicating a 7.02% increase from the same quarter last year [2] - The consensus estimate for revenue is $1.2 billion, reflecting a 9.55% rise from the equivalent quarter last year [2] Full Year Projections - For the full year, the Zacks Consensus Estimates project earnings of $5.22 per share and revenue of $4.79 billion, representing changes of +7.41% and +11.75% respectively from the previous year [3] - Recent shifts in analyst projections for Deckers should be monitored, as positive estimate revisions are seen as a good sign for the company's business outlook [3] Valuation Metrics - Deckers is currently trading at a Forward P/E ratio of 30.78, which is a premium compared to the industry average Forward P/E of 15.94 [6] - The company has a PEG ratio of 2.85, higher than the Retail-Apparel and Shoes industry's average PEG ratio of 1.94 [6] Industry Ranking - The Retail-Apparel and Shoes industry is part of the Retail-Wholesale sector, holding a Zacks Industry Rank of 86, placing it in the top 35% of over 250 industries [7] - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Insights - Long-term shareholders of Decker Brands have seen significant returns, with the stock posting a total return of 1,000% over the last 10 years, while Nike's stock is up only about 100% [2][7] Company Performance - Decker Brands reported a revenue growth of 22% year over year to $825 million in the last quarter, driven primarily by its Hoka brand, which saw a 29% increase in revenue to $545 million [4] - In contrast, Nike experienced a 10% decline in revenue year over year, generating over $11 billion in sales last quarter [4] - Decker Brands has an operating margin of 22.3%, significantly higher than Nike's 11.8%, indicating better profitability [5] Competitive Landscape - Decker Brands has successfully captured market share in the running shoe segment, directly competing with Nike through its Hoka brand, which appeals to environmentally conscious consumers [3] - The company has a strong track record of acquiring and growing multiple footwear brands, including Ugg, Teva, and Hoka, all of which have expanded significantly since their acquisition [6][7] Market Valuation - Decker Brands currently has a market capitalization of $24.6 billion and trades at a forward price-to-earnings (P/E) ratio of 30.4, which is considered high compared to the S&P 500's P/E of 30 [8] - Despite its growth, the high valuation may deter potential investors, as the sustainability of sales growth for its brands is uncertain [9]

Group 1: Company Overview - Deckers Outdoor owns several popular shoe brands, including Ugg, Hoka, Teva, and Sanuk, providing broad exposure to the shoe market [4] - The company sells shoes through wholesale partners and direct-to-consumer channels, with 43% of sales coming from direct channels in fiscal 2024 [5][6] - Deckers operates less than 200 retail locations worldwide, indicating a strong focus on e-commerce [5] Group 2: Market Position and Performance - Deckers has gained market share due to competitors like Nike over-relying on e-commerce, which has allowed Deckers to benefit from this misstep [7] - The shoe industry is considered somewhat recession-proof, as shoes are universally needed and regularly replaced, ensuring a baseline level of demand [8] - Revenue for Deckers has been increasing significantly, leading to record-high gross and net margins [9] Group 3: Future Earnings and Valuation - There are concerns about whether Deckers' current profit margins are sustainable or if they are experiencing a temporary boost from recent revenue growth [10] - Management expects gross margin to decrease from nearly 56% in fiscal 2024 to 54% in the current year, indicating potential margin contraction [11][12] - The stock is currently trading at 31 times earnings, which is near the highest valuation level seen in the last five years, raising concerns about its attractiveness as an investment [13][14]

Core Viewpoint - Deckers Outdoor has seen a significant increase in its stock price, up 95% this year, driven by the success of its HOKA brand and strong earnings growth [1][2]. Financial Performance - In the first quarter of fiscal 2025, Deckers Outdoor reported a revenue increase of 22%, with HOKA brand sales growing by 30% [5]. - Earnings per share (EPS) for the same period reached $4.52, an 88% increase, attributed to a higher gross margin from premium HOKA pricing [6]. - For the full fiscal year, Deckers expects net sales to reach $4.7 billion, a 10% increase from the previous year, with EPS growth projected between 2% and 5% [7]. Brand Portfolio and Growth Drivers - Deckers owns several brands, including the iconic UGG and the smaller Teva, with HOKA being the most significant growth driver since its acquisition in 2012 for $1.1 million [3][4]. - HOKA is projected to generate over $2 billion in sales this year, contributing to a 584% stock return over the past five years [4]. Market Position and Competitive Landscape - Deckers is performing well compared to competitors like Nike and Lululemon, which are experiencing sluggish demand, allowing Deckers to capture market share [9]. - The company plans to expand internationally and enter new product categories, including apparel, to leverage brand momentum [10]. Financial Health - Deckers has a strong balance sheet with $1.4 billion in cash and no financial debt, and it has repurchased $152 million in shares in Q1 [8]. - The forward price-to-earnings (P/E) ratio is 30, which is a premium compared to peers like Nike and Lululemon, but justified by the company's financial strength [12]. Future Outlook - The company is expected to gradually shift from a footwear focus to a broader lifestyle portfolio, which could positively impact earnings [11]. - Overall, the stock is viewed as a strong investment opportunity, with expectations for continued growth as long as macroeconomic conditions remain favorable [14].

Core Insights - Deckers Outdoor Corp has demonstrated strong financial performance, with shares priced at $162.53, reflecting a daily gain of 2.33% and a three-month change of 2.38, indicating potential for future growth [1][3] Financial Performance - The company has a market capitalization of $24.78 billion and annual sales of $4.44 billion, with an operating margin of 22.3% [3] - Deckers Outdoor Corp's revenue breakdown includes $1.9 billion (43.3%) from direct-to-consumer sales, $1.1 billion (26.3%) from HOKA brand wholesale, and $1.1 billion (26.0%) from UGG brand wholesale [5] - The company reported a gross profit of $2.4 billion, representing 55.6% of total revenue [5] Profitability and Growth Metrics - Deckers Outdoor Corp has shown an impressive interest coverage ratio of 382.08, an Alman Z-Score of 15.6, and a low debt-to-revenue ratio of 0.06, indicating strong financial health [5] - The company's operating margin and gross margin have both shown a consistent upward trend over the past five years, reflecting efficiency in converting revenue into profit [5] GF Score - Deckers Outdoor Corp has a GF Score of 92 out of 100, indicating a strong potential for outperformance based on historical data correlating with long-term stock performance [2][6]