Financial Data and Key Metrics Changes - The company reported a revenue increase of 9% in the second quarter, with diluted earnings per share growing by 14% compared to the previous year [7][26] - For the first half of fiscal 2026, total company revenue grew by 12%, with HOKA revenue increasing by 15% and UGG revenue rising by 12% [7][8] - Gross margin for the second quarter was 56.2%, up 30 basis points from 55.9% in the previous year [27][28] - Diluted EPS for the quarter was $1.82, an increase of $0.23 from last year's $1.59, representing a 14% growth [29] Business Line Data and Key Metrics Changes - HOKA's revenue in the first half increased by 15%, driven by updates to key road-running franchises and strong international performance [11][19] - UGG's global revenue in the first half increased by 12%, with men's footwear growing at twice the rate of the overall brand [19][20] - HOKA's wholesale channel grew by 13% in the second quarter, while DTC grew by 8% [26][27] - UGG's wholesale increased by 17% in the second quarter, but DTC declined by 10% due to pressures from better in-stock positions with wholesale partners [27] Market Data and Key Metrics Changes - International regions were the primary drivers of revenue growth for both HOKA and UGG, with UGG and HOKA revenue in international markets increasing by 38% year-over-year [8][19] - HOKA gained two points of market share in the U.S. road-running category and outpaced competition in Europe [12][16] - In China, HOKA's premium positioning and product innovation drove resilient consumer demand, with significant growth in loyalty membership [17][18] Company Strategy and Development Direction - The company aims for continued international expansion and a balanced business model between direct-to-consumer and wholesale channels, targeting a 50/50 split [10][32] - HOKA is focusing on performance categories such as trail, hike, fitness, and lifestyle, with plans to introduce new products and enhance brand awareness [75] - UGG is leveraging brand activations and marketing campaigns to maintain cultural relevance and drive consumer engagement [23][36] Management's Comments on Operating Environment and Future Outlook - Management anticipates a more cautious consumer environment in the second half of fiscal 2026 due to the impact of tariffs and price increases [40][42] - The company remains confident in the long-term growth potential of both HOKA and UGG, emphasizing a focus on sustainable growth rather than short-term sales [36][45] - The guidance for fiscal 2026 includes total revenue expectations of approximately $5.35 billion, with HOKA projected to grow in the low teens and UGG in the low to mid-single digits [31][32] Other Important Information - The company repurchased approximately $282 million worth of shares during the second quarter, with $2.2 billion remaining authorized for share repurchases [30] - The anticipated unmitigated tariff impact for fiscal year 2026 is approximately $150 million, with mitigation efforts expected to offset $75 to $95 million of this pressure [33] Q&A Session Summary Question: About the guidance for HOKA and UGG growth expectations - Management indicated that the guidance reflects a cautious outlook due to anticipated consumer behavior changes and tariff impacts, but both brands are well-positioned for long-term growth [40][42] Question: Split between DTC and wholesale in Q3 and Q4 - The company expects improvements in DTC sales in the back half of the year, with a more significant growth in Q4 as the DTC comparison becomes easier [52][54] Question: Price actions taken and their impact on demand - Management stated that price increases have not negatively impacted demand, with strong sell-throughs for both brands [61] Question: Healthy order book for spring and summer 2026 - The company expressed satisfaction with the order book for spring and summer 2026, indicating an increase compared to previous periods [65][66] Question: Consumer behavior and market positioning - Management acknowledged consumer caution due to economic signals but emphasized that their brands are positioned better than most in the marketplace [70][71]

Core Insights - Deckers exceeded Q2 expectations with revenue of $1.43 billion, reflecting a year-over-year increase of 9.1% and an earnings per share (EPS) of $1.82 [1] Financial Performance - Revenue for Q2 reached $1.43 billion, marking a 9.1% increase compared to the previous year [1] - The earnings per share (EPS) reported was $1.82, surpassing prior estimates [1]

Core Insights - Deckers Outdoor Corp. reported second-quarter earnings of $1.82 per share, exceeding the Street estimate of $1.57 by 16% [2] - Quarterly revenue reached $1.43 billion, surpassing the analyst estimate of $1.41 billion [2] Brand Performance - HOKA brand net sales increased by 11.1% to $634.1 million compared to $570.9 million [6] - UGG brand net sales rose by 10.1% to $759.6 million compared to $689.9 million [6] - Other brands experienced a decline in net sales by 26.5% to $37.2 million compared to $50.6 million [6] Sales Channels - Wholesale net sales grew by 13.4% to $1.036 billion compared to $913.7 million [6] - Direct-to-Consumer (DTC) net sales decreased by 0.8% to $394.6 million compared to $397.7 million [6] - DTC comparable net sales fell by 2.9% [6] Management Commentary - CEO Stefano Caroti highlighted strong performance and international momentum for HOKA and UGG brands, which delivered double-digit growth [4] - Caroti expressed confidence in the company's ability to achieve its fiscal year 2026 outlook and capture significant opportunities ahead [5] Financial Outlook - The company anticipates fiscal GAAP EPS of $6.30 to $6.39, slightly above the $6.28 estimate, and revenue of $5.35 billion, below the $5.45 billion analyst estimate [6]

Shares for Hoka and Ugg parent company Deckers Brands dropped over 8 percent in after-market trading on Thursday after the footwear maker posted yearly guidance below analysts’ expectations. The Goleta, Calif.-based company reported net sales in the second quarter of fiscal 2026 increased 9.1 percent to $1.43 billion compared to $1.31 billion the same time last year. Net income for the second quarter was $268.15 million, or $1.82 per diluted share, down from $357.95 million, or $2.74 per diluted share, th ...

Core Viewpoint - The shoe company has decided to provide full-year guidance after previously withholding it due to macroeconomic uncertainties [1] Group 1 - The company is responding to improved visibility in the market, allowing it to offer a more confident outlook for the upcoming year [1] - Previous macroeconomic uncertainties had led the company to refrain from issuing guidance, indicating a cautious approach to forecasting [1] - The decision to provide guidance suggests a potential stabilization in the industry, which may benefit investor confidence [1]

Financial Performance - Second quarter fiscal 2026 revenue increased 9% to $1.43 billion compared to $1.31 billion, with a constant currency increase of 8.3%[6] - HOKA brand net sales rose 11.1% to $634.1 million, while UGG brand net sales increased 10.1% to $759.6 million[7] - Gross margin improved to 56.2% from 55.9%, and diluted earnings per share increased 14% to $1.82[6] - Full fiscal year 2026 net sales are expected to be approximately $5.35 billion, with HOKA projected to grow by a low-teens percentage and UGG by a low-to-mid-single-digit percentage[12] - Operating margin is projected to be approximately 21.5% for the full fiscal year 2026[12] Shareholder Actions - The company repurchased approximately 2.6 million shares for $282 million at an average price of $109.31 per share, with $2.2 billion remaining under its stock repurchase authorization[8] Expenses and Cash Flow - SG&A expenses as a percentage of net sales are expected to be approximately 34.5%[12] - Cash and cash equivalents increased to $1.414 billion from $1.226 billion year-over-year[7] - Inventories rose to $835.6 million compared to $777.9 million from the previous year[7] - The company had no outstanding borrowings as of September 30, 2025[7]

Core Insights - Deckers Outdoor Corporation is set to announce its fiscal second-quarter results on October 23, 2025, with expectations of adjusted earnings of $1.58 per share and revenue of $1.42 billion, reflecting a 1% decrease in earnings and an 8% increase in sales year-over-year [3] - The company's stock has declined nearly 50% year-to-date, contrasting with a 15% rise in the S&P 500, raising questions about its investment potential despite its historical growth and strong margins [4] - Market sentiment is a primary concern, as disappointing earnings or slowing growth in its HOKA brand could exert further pressure on the stock [5] Valuation - Deckers' current valuation appears reasonable, with a price-to-earnings ratio of 15.7, lower than the S&P 500 average of 24.2, and a price-to-sales ratio of 3.0, slightly below the market's 3.2, indicating that investors are acquiring a company with superior margins without incurring a premium [6] Growth - Over the past three years, Deckers has achieved revenue growth of approximately 16.5% per year, nearly three times the overall market growth rate, with a 16% increase in sales over the last twelve months and a 6.5% rise in the first quarter year-over-year [7] Profitability - Deckers boasts an operating margin of 23.6%, significantly above the S&P's 18.6%, and a net margin of 19.4%, demonstrating strong pricing power even in a softer consumer environment [9] Financial Stability - The company has a robust balance sheet with only $277 million in debt against a market cap of $15 billion, resulting in a debt-to-equity ratio of just 1.8%, and holds $1.9 billion in cash, providing significant financial flexibility [10] Historical Resilience - Deckers has a history of recovering quickly from market downturns, rebounding from a 48% drop during the inflation shock of 2022 within 308 days, and recovering from a 55% decline during the Covid market crash in just 76 days [11][12] Conclusion - Despite weak market sentiment, Deckers' strong fundamentals, including robust growth, high margins, and a solid balance sheet, position it well for potential recovery, especially if the upcoming earnings report exceeds expectations [13]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] - A specific company is highlighted as a key player in the AI energy sector, owning critical energy infrastructure assets that are essential for meeting the increasing energy demands of AI technologies [3][7] Investment Landscape - Wall Street is investing hundreds of billions into AI, but there is a pressing concern regarding the energy supply needed to sustain this growth [2] - AI data centers consume energy equivalent to that of small cities, leading to a strain on global power grids and rising electricity prices [2][3] - The company in focus is positioned to capitalize on the surge in demand for electricity driven by AI advancements [3][6] Company Profile - The company is described as a "toll booth" operator in the AI energy boom, benefiting from the increasing need for energy infrastructure [4][5] - It is involved in the U.S. LNG exportation sector, which is expected to grow significantly under the current administration's energy policies [7] - The company is noted for its capability in executing large-scale engineering, procurement, and construction projects across various energy sectors, including nuclear energy [7][8] Financial Position - The company is completely debt-free and has a substantial cash reserve, amounting to nearly one-third of its market capitalization [8] - It is trading at less than 7 times earnings, indicating a potentially undervalued position in the market [10] Market Trends - The ongoing AI infrastructure supercycle, combined with the onshoring boom and a surge in U.S. LNG exports, creates a favorable environment for the company's growth [14] - The influx of talent into the AI sector is expected to drive continuous innovation and advancements, further solidifying the importance of energy infrastructure [12][13]

Core Viewpoint - Deckers Outdoor Corporation (DECK) is positioned for potential growth despite recent stock performance challenges, with upcoming earnings expected to reflect a slight profit decrease compared to the previous year [1][2]. Financial Performance - Analysts anticipate DECK will report a profit of $1.58 per share for fiscal Q2 2026, a slight decrease from $1.59 per share in the same quarter last year [2]. - For fiscal 2026, DECK is projected to achieve a profit of $6.35 per share, a marginal increase from $6.33 per share in fiscal 2025, with further growth expected to $6.82 per share in fiscal 2027, representing a year-over-year increase of 7.4% [3]. Recent Stock Performance - DECK's shares have declined by 40.2% over the past 52 weeks, significantly underperforming the S&P 500 Index, which rose by 13.4%, and the Consumer Discretionary Select Sector SPDR Fund, which increased by 17.4% during the same period [4]. - Following the release of better-than-expected Q1 results, DECK's shares surged by 11.4% in the subsequent trading session, with net sales rising by 16.9% year-over-year to $964.5 million, exceeding consensus estimates by 7.3% [5]. Analyst Sentiment - Wall Street analysts maintain a "Moderate Buy" rating for DECK, with 10 out of 25 analysts recommending "Strong Buy," one suggesting "Moderate Buy," 12 advising "Hold," and two indicating "Strong Sell" [6]. - The mean price target for DECK is set at $127.75, suggesting a potential upside of 34.4% from current levels [6].

Core Insights - Retail stocks linked to merchandise have faced significant declines over the past year, primarily due to increased tariffs and the elimination of the de minimis rule for duty-free imports [1][2] Retail Industry Overview - Retail businesses typically operate on thin margins and rely on high volume for profitability; however, rising tariffs have severely impacted these margins, posing survival challenges for many companies [2] Company-Specific Analysis Deckers Outdoor (DECK) - Deckers is leveraging its premium brand positioning to mitigate tariff impacts by increasing prices on its fast-growing HOKA and UGG products [5] - The CFO of Deckers indicated that if tariffs from Vietnam rise from 10% to 20%, the company could face an unmitigated impact of $185 million on its cost of goods sold in fiscal year 2026 [5] - Deckers has established cost-sharing partnerships with manufacturing facilities in Vietnam and China to distribute the tariff burden [5] - The company boasts the highest return on invested capital (ROIC) in the retail sector at 53% for 2024, with $1.72 billion in cash and only $312 million in debt, allowing it to remain profitable despite tariff challenges [6] - The mean price target for Deckers is $127.80, indicating a potential upside of 26% [6] Lululemon Athletica (LULU) - Lululemon is also positioned as an efficient business in the retail sector, with a ROIC of 45% [7] - Despite its efficiency, Lululemon has received a "Neutral" rating from Citi and a consensus "Hold" from 31 analysts [7]