Financial Data and Key Metrics Changes - For fiscal year 2025, the company reported a revenue increase of 16% year-over-year, reaching nearly $5 billion [7][35] - Gross margin expanded by 230 basis points to 57.9%, while operating margins improved by 200 basis points to 23.6% [7][35] - Earnings per share (EPS) increased by 30% year-over-year to $6.33 [7][38] Business Line Data and Key Metrics Changes - HOKA brand revenue grew 24% year-over-year to $2.2 billion, with wholesale revenue also increasing by 24% [12][35] - UGG brand revenue increased by 13% to $2.5 billion, with wholesale revenue rising by 15% [23][35] - Direct-to-consumer (DTC) revenue for HOKA increased by 23%, while UGG's DTC revenue rose by 11% [12][23] Market Data and Key Metrics Changes - International revenue for HOKA expanded by 39%, now representing 34% of global revenue, up from 30% last year [12] - U.S. revenue for HOKA rose by 17%, totaling just under $1.5 billion [12] - UGG's international revenue grew by 20%, now accounting for 39% of global sales, up from 37% last year [23] Company Strategy and Development Direction - The company aims for a balanced channel mix of 50% DTC and 50% wholesale, focusing on brand-led growth and innovation [10][11] - HOKA is positioned as a leading performance brand with plans to expand its market share through innovation and increased brand awareness [19][22] - UGG is focusing on increasing adoption among male consumers and developing year-round products to capture a broader market [25][27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertainty in the macroeconomic environment and its potential impact on consumer spending [29][31] - The company expects to face challenges in fiscal year 2026 due to tariff impacts, estimating an increase of up to $150 million in cost of goods sold [39][41] - Despite these challenges, management remains confident in the long-term growth potential of both HOKA and UGG brands [29][41] Other Important Information - The company repurchased approximately $567 million worth of shares during fiscal year 2025, reflecting strong cash flow generation [38][47] - A new board chair, Cindy Davis, was announced, succeeding Mike Devine [51] Q&A Session Summary Question: About the slowdown in HOKA U.S. DTC - Management noted that the slowdown was due to several unique factors affecting the U.S. market, but international DTC performance remained strong [54][56] Question: Potential for mid-teens growth for HOKA - Management expressed confidence in HOKA's growth potential, emphasizing that the brand's international growth would likely outpace U.S. growth [60][66] Question: Transition to new models and tariff costs - Management confirmed that the $150 million tariff cost is a gross number, with potential mitigations through pricing strategies [76][78]

Financial Data and Key Metrics Changes - Consolidated net sales for Q1 were $464 million, up $39 million or 9% year over year [6] - Organic sales growth for the quarter was $28 million or 7% [7] - Consolidated operating income for the quarter was $65.7 million, an increase of $11.4 million or 21% compared to last year [7] - Consolidated adjusted EBITDA for the quarter was $85.1 million, up $14.5 million or 21% year over year, translating to a margin of 18.3% [8] - GAAP diluted EPS for the quarter was $0.75, compared to $0.84 in Q1 last year, while adjusted EPS was $0.76, an increase of $0.12 or 19% from last year [8][9] - Cash generated from operations was $37 million, up 17% from Q1 last year [14] Business Line Data and Key Metrics Changes - Environmental Solutions Group (ESG) net sales were $387 million, up $33 million or 9% year over year [9][10] - ESG's operating income was $59.7 million, an increase of $8 million or 15% [10] - ESG's adjusted EBITDA was $77.5 million, up $11 million or 17%, with an adjusted EBITDA margin of 20% [10] - Safety and Security Systems Group (SSG) net sales were $76 million, up $6 million or 8% [11] - SSG's operating income was $15.8 million, an increase of $2 million or 14% [11] Market Data and Key Metrics Changes - Order intake for Q1 was $568 million, an increase of $65 million or 13% year over year, setting a new company record [9][22] - Backlog at the end of the quarter was $1.1 billion, another all-time high for the company [9] - Publicly funded orders increased high single digits year over year, while industrial orders rose double digits [23] Company Strategy and Development Direction - The company aims for annual double-digit top-line growth, split evenly between inorganic and organic growth [20] - Investments in production capacity and supply chain optimization are ongoing to meet increased demand [18][30] - The company is focused on expanding market share through strategic initiatives and new product development [20][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term prospects despite macroeconomic uncertainties, supported by a strong backlog [34] - The company raised its full-year adjusted EPS outlook to a range of $3.63 to $3.90, indicating continued growth [34] - Management noted that demand for products and aftermarket offerings remains strong, with no material changes in customer behavior due to tariffs [29][34] Other Important Information - The company has a low net debt leverage ratio and significant flexibility to invest in growth initiatives and return cash to shareholders [14] - The company has initiated a stock repurchase program with an additional authorization of $150 million [15] Q&A Session Summary Question: How have lead times changed compared to previous periods? - Management indicated that capacity utilization is between 70-72%, with lead times for certain products improving to about six months [40] Question: How have April ESG orders trended? - Management confirmed that the strength in ESG orders was not a pull forward due to tariffs, with strong order growth across various sectors [54] Question: What is the outlook for the rental business? - The rental business grew, with rental income and used equipment sales both up double digits year over year [83] Question: How does the company plan to manage pricing in light of tariffs? - Management stated that they can surcharge backlogs if necessary and emphasized their strong position due to localized supply chains [75][87] Question: What is the current status of the integration of Hog into the business? - Integration efforts are ongoing, with positive customer reception noted during a recent trade show [90]

Core Viewpoint - Leading companies in the Shenzhen Stock Exchange (SZSE) are acting as a stabilizing force in the capital market, showcasing strong brand influence, market competitiveness, and industry leadership [1] Group 1: Performance Overview - As of 2024, the 36 leading companies in the SZSE achieved a total operating revenue of 4.56 trillion yuan, representing a year-on-year growth of 7.76%, and accounted for 21.93% of the total operating revenue of all SZSE companies [1] - These companies reported a combined net profit of 485.80 billion yuan, reflecting a year-on-year increase of 18.24%, which constitutes 60.21% of the total net profit of SZSE companies [1] Group 2: Individual Company Performance - Contemporary Amperex Technology Co., Limited (CATL) achieved a net profit of 50.75 billion yuan in 2024, marking a 15.01% increase year-on-year, with a gross margin for its core business of power batteries rising by 5.81 percentage points to 23.94% [2] - BYD Company Limited reported a record high in all core operating indicators, with total revenue reaching 777.10 billion yuan, a year-on-year growth of 29.02% [2] - The revenue from automotive and related products was approximately 617.38 billion yuan, up 27.70%, while revenue from mobile components and assembly reached about 159.61 billion yuan, increasing by 34.60% [2] Group 3: Growth Drivers - The expansion of sales scale and improvement in gross margins are key drivers of performance growth for leading companies in the SZSE [3] - Companies are leveraging brand, technology, and channel advantages to capture market share, while also enhancing product value and profitability through innovation, cost control, and product structure optimization [3] Group 4: Shareholder Returns - Leading companies are sharing development dividends with investors through cash dividends and share buybacks, reinforcing their commitment to shareholder value [4] - ZTE Corporation maintained a cash dividend ratio of 35.0% for 2024, with cumulative cash dividends amounting to 8.1 billion yuan over the past three years [4] - Lens Technology emphasizes stable and high cash dividends to enhance investor value perception [4] Group 5: Capital Structure Optimization - Share buybacks have become a significant strategy for leading companies to optimize capital structure and boost market confidence [5] - These initiatives not only stabilize stock price expectations but also align corporate development with investor interests, fostering a positive capital market ecosystem [5]