Core Insights - HOKA has become a frequent presence in the shoe cabinets of Chinese middle-class consumers, experiencing rapid growth since being acquired by Deckers Brands in 2013 [1] - The company reported its best-ever quarterly performance for HOKA, but the growth rate is showing signs of decline [1][4] Financial Performance - Deckers Brands achieved revenue of $965 million in Q1 2026, a year-over-year increase of 16.9%, with a gross margin of 55.8% [2] - HOKA's net sales grew by 19.8% to $653.1 million, compared to $545.2 million in the same period last year [2] - UGG also performed well, with net sales increasing by 18.9% to $265.1 million [2] Regional Growth - The EMEA region was a key growth driver, with record replenishment volumes in wholesale and steady growth in DTC channels [3] - The APAC region showed impressive growth, with HOKA expanding its market presence through partnerships and self-operated retail stores in China [3] Growth Rate Decline - HOKA's growth rate has slowed, dropping from 29.7% in Q1 2025 to 19.8% in Q1 2026, indicating a nearly 10 percentage point decline [4] - Overall net sales growth for Deckers Brands also decreased from 22.1% to 16.9% in the same timeframe [4] Competitive Landscape - HOKA faces intensified competition in the high-performance running shoe market, particularly from Brooks in the U.S. and local competitor Kailas in China [5] - Brooks reported a 15% increase in global revenue, while HOKA's growth in the U.S. is slowing [5] - Kailas dominates the domestic market with a 34.8% share in trail running shoes, while HOKA holds 24.6% [5] Future Outlook - For Q2 2026, Deckers Brands expects net sales between $1.38 billion and $1.42 billion, with diluted earnings per share projected between $1.50 and $1.55 [6] - The outlook is contingent on the stability of business conditions and potential macroeconomic uncertainties [6]

Core Viewpoint - Deckers Outdoor has shown resilience and potential for recovery despite recent stock struggles, presenting a buying opportunity for investors due to its strong brand performance and financial metrics. Group 1: Company Performance - Deckers Outdoor has returned nearly 10,000% since its IPO in 1993, driven by the success of Hoka and Ugg brands [1] - The company has achieved industry-leading gross margins approaching 60% [2] - Despite a strong first-quarter earnings report, shares are down 48% from their peak earlier this year due to concerns about slowing growth and tariffs [2] Group 2: Earnings and Guidance - The sell-off in stock price appears to be an overreaction, with overall revenue growth slowing to 6.5%, including 10% growth in Hoka and 3.6% growth in Ugg [5] - Deckers exceeded its first-quarter revenue guidance of $890 million to $910 million, reporting $964.5 million, with EPS of $0.93 surpassing the guidance of $0.62 to $0.67 [6] - Second-quarter guidance anticipates 7% revenue growth, with a range of $1.38 billion to $1.42 billion, and EPS of $1.50 to $1.55 [7] Group 3: Stock Valuation - Deckers is trading at a P/E ratio of 18, which is lower than many peers in the footwear and apparel sector and the S&P 500 at 28 [9] - The company reported 17% revenue growth in the first quarter, with 20% growth in Hoka and 19% in Ugg, indicating potential for higher growth than market expectations [10] - Deckers has a strong balance sheet with no debt and $1.7 billion in cash, representing about 10% of its market cap [10] Group 4: Share Buyback - The company has reduced its shares outstanding by nearly 4 million, or 2.5%, over the last four quarters, with 1.7 million shares bought back in the most recent quarter [11] - Deckers has $2.4 billion remaining under a share repurchase authorization, indicating confidence in its stock value [11] Group 5: International Market Strength - International sales accounted for nearly half of Deckers' revenue in the first quarter, growing 49.7% to $463.3 million [12] - Strong performance was noted in the Asia-Pacific and EMEA regions, with significant sales growth in China [13] - The new Hoka Arahi 8 model has achieved double-digit weekly sell-throughs in EMEA, indicating strong demand [13]

Financial Performance - Deckers Outdoor shares surged after surpassing Wall Street estimates [1] Market Dynamics - Strong demand in international markets boosted the footwear company's results [1] - Monitor chart levels for Deckers Outdoor [1]

Company Performance - Deckers Outdoor shares are higher due to strong international demand [1] Brand Performance - Ugg and Hoka shoe brands are driving the demand [1]

Core Viewpoint - Deckers Outdoor Corporation (DECK) delivered strong first-quarter fiscal 2026 results, exceeding expectations and showing year-over-year growth, primarily driven by the HOKA and UGG brands [1][9]. Financial Performance - DECK reported quarterly earnings of 93 cents per share, surpassing the Zacks Consensus Estimate of 68 cents and increasing from 75 cents in the prior-year quarter [4]. - Net sales rose 17% year over year to $964.5 million, exceeding the consensus estimate of $899 million; on a constant-currency basis, net sales grew 7.5% [4]. - Gross profit increased 14.4% year over year to $537.9 million, with a gross margin of 55.8%, down from 56.9% in the previous year but above the estimate of 54.4% [5]. - SG&A expenses climbed 11% year over year to $372.6 million, representing 38.6% of revenues, a decrease of 230 basis points from the previous year [6]. - Operating income was $165.3 million, up 24.5% from $132.8 million in the prior-year quarter, with an operating margin of 17.1%, an increase of 100 basis points [6]. Brand Performance - HOKA brand sales increased 19.8% year over year to $653.1 million, exceeding the projected $609.7 million [7]. - UGG brand sales grew 18.9% to $265.1 million, surpassing the estimate of $238.5 million [7]. - Other brands, including Teva, AHNU, and Koolaburra, saw a decline of 19% year over year to $46.3 million, below the estimate of $52.6 million [7]. Sales Channels and Geography - Wholesale net sales increased 26.7% year over year to $652.4 million, while DTC net sales rose 0.5% to $312.2 million; however, DTC comparable net sales dipped 2.2% [8]. - Domestic net sales decreased 2.8% to $501.3 million, while international net sales surged 49.7% to $463.3 million [10]. Future Outlook - The company did not provide formal guidance for fiscal 2026 due to macroeconomic uncertainties but expects HOKA to remain its fastest-growing brand and international sales to outpace U.S. growth [2][12]. - Management anticipates a year-over-year decrease in gross margin due to elevated tariffs, increased promotions, and higher freight rates, partially offset by selective price increases [13]. - For Q2 fiscal 2026, DECK expects net sales between $1.38 billion and $1.42 billion, with HOKA projected to grow about 10% and UGG expected to increase in the mid-single digits [16]. - Earnings per share are anticipated to be between $1.50 and $1.55, compared to $1.59 in the prior-year period [18].

Core Viewpoint - Deckers Outdoor exceeded expectations in its Q1 report, alleviating investor concerns about growth despite earlier stock declines due to tariff fears and weakening consumer sentiment [1][2]. Financial Performance - Revenue grew 17% to $964.5 million, surpassing the consensus estimate of $900.4 million [4]. - Hoka revenue increased by 19.8% to $653.1 million, while UGG sales rose 18.9% to $265.1 million [5]. - Wholesale revenue surged 26.7% to $652.4 million, and international sales jumped 49.7% to $463.3 million, driven by strong performance in China [6]. - Gross margin decreased from 56.9% to 55.8%, but operating income rose from $132.8 million to $165.3 million, with EPS increasing from $0.75 to $0.93, exceeding estimates of $0.68 [7]. Future Outlook - The company anticipates a $185 million increase in costs due to new tariffs, which could impact revenue by nearly 4% [8]. - For Q2, revenue is expected to be between $1.38 billion and $1.42 billion, reflecting a 7% increase at the midpoint, with EPS projected between $1.50 and $1.55 [9].

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Market Overview - The market opened mixed, with the Dow dropping -316 points (-0.70%) after a +500-point gain the previous day, while the S&P 500 and Nasdaq saw modest increases of +0.07% and +0.18% respectively [1] - The small-cap Russell 2000 index fell -1.3% [1] Services & Manufacturing PMI - The S&P Services PMI for July was reported at 55.2, exceeding expectations of 53.2 and the previous month's 52.9, marking the highest level in 2025 [2] - In contrast, the S&P Manufacturing PMI fell to 49.5, below the anticipated 52.7 and the previous month's 52.9, indicating a decline in new orders for the first time this year [3] Earnings Results - Intel reported Q2 earnings with a loss of -$0.10 per share, missing the expected +$0.01, while revenues were $12.9 billion, surpassing the consensus of $11.87 billion [4] - Intel's guidance for Q3 includes revenue expectations of $12.6-13.6 billion but forecasts earnings of $0.00 per share, down from the expected 2 cents, and announced a further -15% workforce reduction [5] - Deckers Outdoor exceeded earnings expectations with 93 cents per share against estimates of 68 cents, and revenues of $965 million, a +17% increase year-over-year [6] - Despite a +20% surge in shares post-announcement, Deckers' stock is still down approximately -40% year-to-date [7] Upcoming Economic Indicators - Durable Goods Orders for June are anticipated to show a negative swing, with estimates at -11%, following erratic behavior influenced by tariff policies [8] - Q2 earnings reports are expected from Phillips 66 and AutoNation, with major companies like Microsoft, Apple, and Amazon set to report next week [9][10]

Financial Data and Key Metrics Changes - The company reported total revenue of $965 million, a 17% increase compared to the previous year [9][33] - Diluted earnings per share rose 24% to $0.93, up from $0.75 in the prior year [33] - Gross margin for the quarter was 55.8%, down 110 basis points from last year's 56.9% [33] Business Line Data and Key Metrics Changes - HOKA's global revenue increased 20% to $653 million, with wholesale up 30% and DTC up 3% [11][24] - UGG's global revenue rose 19% to $265 million, with wholesale increasing 30% while DTC decreased by 1% [24][33] Market Data and Key Metrics Changes - International revenue increased by 50%, with significant contributions from both HOKA and UGG [9] - EMEA and China were highlighted as key regions for growth, particularly for HOKA [12][25] Company Strategy and Development Direction - The company aims to build premium brands focused on authenticity, innovation, and purpose, with a disciplined investment strategy [10] - HOKA is expected to continue as the fastest-growing brand, while UGG is anticipated to grow internationally at a faster rate than in the U.S. [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating current uncertainties, citing strong brand performance and consumer engagement [43] - The company is cautious about macroeconomic factors, particularly regarding tariffs and their impact on consumer behavior [37][39] Other Important Information - The company repurchased approximately $183 million worth of shares during the first quarter [36] - The tax rate for the quarter was 24%, slightly higher than the previous year's 22.5% [34] Q&A Session Summary Question: HOKA's second quarter guidance and inventory status - Management indicated that HOKA is expected to grow 10% in Q2, with improvements in both wholesale and DTC channels [49][50] - Inventory for older models like Bondi Eight and Clifton Nine is largely cleared, with positive performance for new models [52] Question: DTC growth and retail strategy - Management confirmed expectations for balanced growth between wholesale and DTC, with improvements anticipated in the U.S. market [60][62] - The company plans to expand its retail footprint, with new stores opening in key locations [64] Question: Price increase strategy - Price increases have been implemented selectively, with expectations for further adjustments based on tariff impacts [73][76] - The company is evaluating price increases across various product lines, including both new and existing models [76] Question: HOKA's international performance - International growth is driven by strong sell-through rates and increased distribution, particularly in Europe and China [92] - Management noted healthy order books for the upcoming seasons, indicating robust demand [93] Question: SG&A outlook - SG&A expenses are expected to increase as the company invests in brand building and marketing efforts [95][98] - Management emphasized a disciplined approach to spending while maintaining efficiency [95]

Financial Data and Key Metrics Changes - The company reported total revenue of $965 million, a 17% increase compared to the previous year [8][31] - Diluted earnings per share rose 24% to $0.93 from $0.75 in the prior year [8][31] - Gross margin decreased to 55.8%, down 110 basis points from 56.9% last year [31] Business Line Data and Key Metrics Changes - HOKA's global revenue increased 20% to $653 million, with wholesale up 30% and DTC up 3% [10][23] - UGG's global revenue rose 19% to $265 million, with wholesale increasing 30% while DTC decreased by 1% [23][24] Market Data and Key Metrics Changes - International revenue for Deckers increased by 50%, significantly contributing to overall growth [8] - EMEA and China were the largest contributors to international growth for both HOKA and UGG [11][24] Company Strategy and Development Direction - The company focuses on building premium brands through authenticity, innovation, and purpose [9] - HOKA aims to enhance its market presence through strategic retail expansions and improved consumer experiences [15][63] - UGG is leveraging its three sixty-five initiative to drive year-round sales, particularly in men's footwear and sandals [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic uncertainties and emphasized the importance of brand strength [30][42] - The company is cautious about consumer reactions to price increases and tariffs but remains optimistic about brand momentum [42][66] Other Important Information - The company repurchased approximately $183 million worth of shares during the first quarter [35] - The company ended the quarter with $1.7 billion in cash and equivalents, with no outstanding borrowings [35] Q&A Session Summary Question: HOKA's second quarter guidance and inventory status - Management indicated that HOKA is expected to grow 10% in Q2, with improvements in both wholesale and DTC channels [48][50] - Inventory for older models like Bondi Eight and Clifton Nine is largely cleared, with positive performance for Arahi Eight [51] Question: DTC growth and retail strategy - Management confirmed expectations for balanced growth between wholesale and DTC, with improvements anticipated in the U.S. market [60][62] - The company plans to expand its retail footprint, with new stores opening in key international markets [63] Question: Price increase strategy - The company is implementing selective price increases, with some products seeing increases of around $5 [71][75] - Price adjustments will be evaluated based on tariff impacts and consumer response [75] Question: HOKA's international performance and growth drivers - International growth is driven by strong sell-through rates and new distribution partnerships [91] - Management remains optimistic about healthy order books for the upcoming seasons [92] Question: SG&A outlook and spending control - SG&A expenses are expected to increase due to investments in brand building and marketing [94] - The company will manage expenses efficiently while continuing to invest in growth initiatives [96]