Financial Data and Key Metrics Changes - The company reported a revenue increase of 9% in the second quarter, reaching $1.43 billion, and a 14% increase in diluted earnings per share (EPS) to $1.82 [7][25][29] - For the first half of fiscal year 2026, total company revenue grew by 12%, with HOKA revenue increasing by 15% and UGG revenue rising by 12% [7][18] - Gross margin for the second quarter was 56.2%, up 30 basis points from 55.9% in the previous year, benefiting from price increases and favorable product mix [27][28] Business Line Data and Key Metrics Changes - HOKA's wholesale revenue increased by 13% in the second quarter, while DTC (Direct-to-Consumer) grew by 8% [25][27] - UGG's wholesale revenue rose by 17%, but DTC experienced a 10% decline due to pressures from better in-stock positions with wholesale partners [26][27] - HOKA gained two points of market share in the U.S. road-running category over the past year, while UGG's men's footwear grew at twice the rate of the overall brand [11][19] Market Data and Key Metrics Changes - International regions drove significant growth for both HOKA and UGG, with UGG and HOKA revenue increasing by 38% in international markets [7][18] - HOKA saw strong performance in EMEA and China, with notable growth in loyalty membership and significant gains among younger consumers [16][17] Company Strategy and Development Direction - The company aims for continued international expansion and a balanced business model between DTC and wholesale channels, targeting a 50/50 split [9][24] - HOKA is focusing on performance categories such as trail running, hiking, fitness, and lifestyle, with plans to introduce more lower-profile products [10][85] - UGG is enhancing its brand presence through marketing campaigns and collaborations to maintain cultural relevance and consumer engagement [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the U.S. consumer environment, anticipating a more cautious consumer behavior due to inflation and price increases [39][84] - The company remains confident in its brands' positioning and long-term growth potential, despite short-term challenges [35][42] 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 guidance for fiscal year 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] Q&A Session Summary Question: Can you unpack 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 remains confident in brand strength [39][42] Question: What is the split between DTC and wholesale for Q3 and Q4? - The company expects improvements in DTC sales in the back half of the year, with a more significant growth in Q4 compared to Q3 [55] Question: How are price actions affecting demand? - Management noted that premium brands have more elasticity, and they have not seen issues with sell-throughs despite price increases [68] Question: What are the growth opportunities for HOKA? - HOKA is focusing on performance, trail, fitness, lifestyle, and potential apparel categories, with significant upside in both U.S. and international markets [90]