Deckers Brands reports 7.1% increase in Q3 net sales

Core Insights - The company reported a net sales increase of 6.8% on a constant currency basis, with diluted earnings per share rising from $3.00 to $3.33 [1] Group 1: Brand Performance - HOKA brand revenue increased by 18.5%, totaling $628.9 million, while UGG brand sales rose by 4.9% to $1.305 billion [2] - Other brands experienced a significant decline of 55.5% in sales, falling to $23.2 million, partly due to the phase-out of Koolaburra brand operations [2] Group 2: Distribution Channels - Wholesale net sales increased by 6% to $864.6 million, while direct-to-consumer (DTC) net sales rose by 8.1% to $1.093 billion, with DTC comparable net sales up by 7.3% [3] - Domestic sales grew by 2.7% to $1.2 billion, while international sales saw a substantial increase of 15%, reaching $756.7 million [3] Group 3: Financial Metrics - Gross margin slightly decreased from 60.3% to 59.8%, while selling, general, and administrative expenses rose to $557 million from $535.3 million [4] - Operating income improved from $567.3 million to $614.4 million [4] - As of 31 December 2025, the company held cash and cash equivalents of $2.087 billion and inventories of $633.5 million, with no outstanding borrowings [4] Group 4: Capital Allocation - During the third fiscal quarter, the company repurchased approximately 3.8 million shares for $348.5 million at an average price of $92.36 per share [5] - Over the first nine months of fiscal year 2026, around eight million shares were bought back for a total of $813.5 million at an average price of $101.44 per share [5] Group 5: Future Outlook - For the full fiscal year ending 31 March 2026, the company projects net sales between $5.400 billion and $5.425 billion, with mid-teens percentage growth anticipated for HOKA and mid-single-digit increases for UGG compared to last year [6] Group 6: Management Commentary - The CEO attributed positive results to strategic initiatives and effective marketplace management, highlighting significant growth for HOKA in both US and international markets [7] - The CEO emphasized balanced growth in DTC and wholesale channels, with strong gross margins driven by high levels of full-price selling for both UGG and HOKA [8]