Deckers(US:DECK) Guohai Securities·2024-05-29 10:01Investment Rating - The investment rating for Deckers Outdoor Corporation (DECK) is "Buy" (maintained) [3][27]. Core Insights - The company's net sales for FY2024 reached $4.29 billion, representing a year-over-year increase of 18.2%, while operating income grew by 42.1% to $928 million. The gross profit margin (GPM) improved to 55.6%, up 5.3 percentage points from the previous year. The diluted EPS was $29.16, compared to $19.37 in the same period last year [1][27]. - Revenue and earnings exceeded expectations, with HOKA leading the growth. The brand's revenue increased by 27.9%, significantly contributing to the overall performance [3][27]. - The company is focusing on direct-to-consumer (DTC) channel expansion and international growth, with international revenue growing at a faster rate than domestic revenue [26][27]. Financial Performance Summary - For FY2024, the company reported net sales of $4.29 billion, up 18.2% year-over-year, and operating income of $928 million, up 42.1%. The GPM was 55.6%, and SG&A expenses totaled $1.458 billion, a 24.3% increase [1][27]. - In Q4 FY2024, net sales were $960 million, reflecting a 21.2% increase year-over-year, with operating income of $144 million, up 36.2% [7][10]. - The company anticipates continued revenue growth, projecting FY2025-2027 revenues of $4.764 billion, $5.264 billion, and $5.851 billion, respectively, with growth rates of 11.1%, 10.5%, and 11.1% [14][27]. Brand Performance - Revenue by brand for FY2024 was as follows: HOKA at $1.807 billion (+27.9%), UGG at $2.239 billion (+16.1%), Teva at $149 million (-18.9%), Sanuk at $25 million (-33.0%), and other brands at $68 million (+5.9%) [3][27]. - HOKA's growth is attributed to increased brand awareness and strong DTC growth, indicating a robust market position [3][27]. Market Position and Future Outlook - The company is expanding its international presence, with international revenue accounting for approximately one-third of total revenue. HOKA's international revenue is slightly lower, around 30%, with plans for increased investment in this area [26][27]. - The report highlights significant growth potential in the Chinese market for HOKA, with management targeting a revenue contribution of 10% from this region in the next three years [12][13][27].