Core Insights - Deckers Outdoor Corporation's performance is primarily driven by strong consumer demand for its flagship brands, HOKA and UGG, with year-over-year sales growth of 10% and 3.6% respectively in Q4 FY25 [1][9] Brand Performance - HOKA's sales reached $2.2 billion in FY25, reflecting a 23.6% year-over-year increase, supported by new product launches and international expansion, particularly in EMEA and China [4][2] - UGG generated $2.5 billion in sales for FY25, marking a 13.1% year-over-year growth, with a focus on expanding its product line beyond cold-weather offerings [4][3] International Growth - HOKA's international revenues grew by 39% year-over-year, now accounting for 34% of total brand sales, while UGG's international revenues increased by 20%, representing 39% of total sales [4][2] Competitive Landscape - Key competitors in brand innovation include Wolverine World Wide, Inc. and Urban Outfitters Inc., with Wolverine's Saucony and Merrell brands showing strong revenue growth [5][6] - Urban Outfitters' brand portfolio also demonstrated positive performance, with notable increases in net sales for its brands [7] Financial Performance and Valuation - Deckers' shares have declined by 50% year-to-date, compared to a 17.6% decline in the industry [8] - The company trades at a forward price-to-earnings ratio of 16.45X, slightly below the industry's average of 17.01X [10] - Zacks Consensus Estimate indicates a projected earnings decline of 4.4% for FY26, with a potential recovery of 9.1% in FY27 [11]

Financial Data and Key Metrics Changes - The preliminary voting results indicated that all director nominees were duly elected to serve until the 2026 annual meeting [21] - The selection of Ernst and Young LLP as the independent registered public accounting firm for the fiscal year ending 12/31/2025 was ratified by approximately 100% of the votes cast [22] - A nonbinding advisory vote on the compensation of the company's named executive officers was approved by approximately 94% of the votes cast [22] Business Line Data and Key Metrics Changes - The company launched several new products in the first quarter, including two new full sugar Monster flavors and various strategic brands in EMEA [27][28] - The Ultra family of products has been growing at over 20% [45] - The company is expanding its Predator brand in various markets, including a national rollout in China [29][56] Market Data and Key Metrics Changes - According to Nielsen, sales in the energy drink category increased by 12.5% year-over-year, with Monster's sales increasing by 10.1% [31] - In Mexico, Monster's sales increased by 17.6%, and its market share rose to 31.2% [34] - In EMEA, the energy drink category grew approximately 13.6% year-over-year, with Monster's market share increasing in several countries [35][36] Company Strategy and Development Direction - The company continues to focus on expanding its energy drink category while exploring opportunities in other beverage categories, including alcoholic beverages [52] - The upcoming launch of Blind Lemon, a new hard lemonade line, is part of the strategy to boost profitability in the Alcohol Brands division [53] - The company is optimistic about the long-term prospects for the Monster brand in China and is excited about the rollout of Predator [56] Management's Comments on Operating Environment and Future Outlook - Management noted a strong recovery in the U.S. energy category, driven by functionality, value proposition, and diverse offerings [43][44] - The company is focused on long-term value creation opportunities and optimizing trade spend [51] - Management expressed confidence in the company's growth strategy and innovation pipeline for 2026 and beyond [62] Other Important Information - The company highlighted that Nielsen data does not capture all sales channels, including foodservice and e-commerce [30] - The company acknowledged the impact of increased input costs and tariffs on aluminum but does not expect a significant impact on gross margins in the short term [49][50] Q&A Session Summary Question: Key factors behind the recovery and sustainability of revenue growth in the U.S. Energy category - Management attributed recovery to functionality, affordable value, image, and diverse offerings appealing to a broad consumer base [43][44] Question: Drivers of strong industry-wide scanner data and consumer preferences - Management noted growth from new consumers, particularly younger females, and a narrowing price differential between energy drinks and other beverages [47][48] Question: Strategy for protecting gross margins - Management discussed input cost increases and a hedging strategy for aluminum, emphasizing ongoing cost savings and pricing evaluations [49][50] Question: Role of Alcohol Brands division in overall strategy - Management stated the focus remains on energy drinks while exploring growth in alcoholic beverages, including the launch of Blind Lemon [52][53] Question: Update on dual brand price point strategy in China - Management highlighted optimism for the Monster brand in China and the rollout of Predator as a key growth driver [56][57] Question: Ongoing involvement of Rodney Sachs in the company - Management confirmed that Rodney Sachs will focus on marketing and innovation while remaining involved in legal matters [58][60]

Financial Data and Key Metrics Changes - Organic sales declined by 1.2% compared to Q1 last year, consistent with the full-year outlook [10][26] - Adjusted gross margin was 60%, down 20 basis points year-over-year [30] - Adjusted operating margin contracted by 220 basis points to 19.8% due to increased brand support investments [30][37] - Adjusted net income was $465 million, with adjusted diluted EPS of $0.24, reflecting a $0.02 headwind from currency [31] Business Line Data and Key Metrics Changes - In Self Care, organic sales grew by 0.3%, driven by allergy, digestive health, and smoking cessation franchises [11][27] - Skin Health and Beauty saw organic sales decline by 4.8%, impacted by destocking in China and a soft sun season in Latin America [14][28] - Essential Health's organic sales were flat, with growth in Wound Care offset by declines in Women's Health and Oral Care [19][29] Market Data and Key Metrics Changes - EMEA region showed strength with organic sales growth for the twelfth consecutive quarter, driven by double-digit growth in the Avino brand [16] - In the U.S., sequential consumption improved in Q1 compared to Q4, particularly for Neutrogena and Aveeno brands [17][18] - The U.S. market experienced destocking in April, affecting sales performance [52] Company Strategy and Development Direction - The company is focused on accelerating profitable growth through a new operating model, optimizing cost structures, and enhancing performance culture [8][9] - Strategic priorities include leveraging superior science, launching insights-led innovation, and driving seamless commerce [8] - The company plans to maintain its organic sales growth outlook for 2025 in the range of 2% to 4% despite macroeconomic challenges [32][33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant macro shifts and seasonal variability but expressed confidence in navigating the complex environment [7] - The company expects to see stronger top-line performance in the second half of the year as headwinds dissipate [32][37] - Management remains focused on increasing household penetration and gaining market share despite external pressures [55][60] Other Important Information - A CFO transition was announced, with Amit Banati set to join as the new Chief Financial Officer [23][24] - The company is implementing measures to mitigate the impact of tariffs, estimating a gross impact of $150 million for 2025 [36][94] Q&A Session Summary Question: Innovation plans in the current environment - Management confirmed strong innovation plans for 2025, with adjustments to ensure value and presence in stores [41][45] Question: Phasing of organic growth in Q2 - Management indicated that Q2 organic sales growth will continue to be burdened by destocking and strategic price investments [48][52] Question: Confidence in skin health and beauty initiatives - Management expressed optimism about consumption trends and the effectiveness of marketing campaigns, though acknowledging more work is needed [62][65] Question: Balancing promotional activity with marketing investment - Management plans to continue investing in marketing while monitoring ROI closely [68][70] Question: Impact of tariffs and supply chain concerns - Management discussed the relatively small exposure to China and ongoing efforts to enhance supply chain resilience [82][86]