Financial Data and Key Metrics Changes - Consolidated sales increased at the high end of the guided range, with adjusted EBITDA margin expanding by 60 basis points to 21.4% and adjusted diluted EPS growing by 6.5% [4][6] - SG&A growth moderated to low single digits, in line with expectations, driven by control of general and administrative expenses [5][6] - The company returned $864 million to shareholders through share repurchases and dividends [6] Business Line Data and Key Metrics Changes - **Paint Stores Group**: Sales increased by mid-single digits, with price mix up at the high end of low single digits and volume up low single digits [8] - **Consumer Brands Group**: Sales exceeded expectations, with price mix up low single digits and volume down mid-single digits, affected by softness in North America DIY [10] - **Performance Coatings Group**: Sales were in line with expectations, with volume, acquisitions, and FX all increasing by low single digits, but offset by unfavorable price mix [11][12] Market Data and Key Metrics Changes - The company outperformed the market in all segments served, despite a softer demand environment [8] - Residential repaint sales grew by mid-single digits, continuing a trend of growth since early 2022, despite negative existing home sales [8] - Commercial sales were up mid-single digits, even with multifamily completions down double digits [9] Company Strategy and Development Direction - The company continues to focus on growth investments, controlling costs, and leveraging a unique competitive environment [4][7] - The acquisition of Suvinil is expected to enhance the Consumer Brands Group's portfolio and provide profitable growth opportunities [11][48] - The company plans to continue investing in growth initiatives, including opening 80 to 100 North American paint stores for the year [15][18] Management's Comments on Operating Environment and Future Outlook - Management noted a challenging demand environment is expected to persist into 2026, with minimal positive catalysts currently visible [16][20] - The company is focused on driving customer success and maintaining profitability despite market challenges [20][21] - Management expressed confidence in their strategy and the team's ability to outperform the market [21] Other Important Information - The company temporarily paused matching contributions to its 401(k) plan to preserve jobs and protect the company during a period of uncertainty [13][14] - The company expects to see a modest cost headwind next year due to new headquarters and R&D center investments [19][20] Q&A Session Summary Question: Can you provide more details on the 7% price increase for Paint Stores Group? - Management explained that the price increase is driven by higher year-over-year costs and the need to balance volume growth with pricing effectiveness [24][25] Question: What mortgage rates are needed to catalyze demand in the Paint Stores Group? - Management indicated that around 6% mortgage rates could drive stronger existing home turnover, which is crucial for demand [32][33] Question: How do you define the efficiency of investment spending? - Management emphasized a disciplined approach to investments, focusing on returns and adjusting spending based on market conditions [38][39] Question: What actions are planned for the Suvinil acquisition? - Management expressed excitement about the acquisition and the potential for synergies, expecting it to contribute positively to sales and profitability [45][48] Question: What is the outlook for the second half of next year? - Management noted that current trends do not indicate a strong recovery, emphasizing a pragmatic approach to forecasting [50][51] Question: Can you discuss the negative operating leverage in Performance Coatings? - Management attributed the negative leverage to unfavorable mix by region and business, but expects improvements in the fourth quarter [78][80] Question: What is the expected pricing capture in 2026? - Management indicated that pricing capture will depend on market dynamics, but they plan to be aggressive in balancing volume growth with price increases [63][64] Question: How much volume hurt gross margin rate this year? - Management noted that supply chain inefficiencies impacted gross margin, but they expect volume growth to drive operating margin expansion [110][111]

Financial Data and Key Metrics Changes - The company reported total revenue of $965 million, a 17% increase compared to the previous year [8][31] - Diluted earnings per share rose 24% to $0.93 from $0.75 in the prior year [8][31] - Gross margin decreased to 55.8%, down 110 basis points from 56.9% last year [31] Business Line Data and Key Metrics Changes - HOKA's global revenue increased 20% to $653 million, with wholesale up 30% and DTC up 3% [10][23] - UGG's global revenue rose 19% to $265 million, with wholesale increasing 30% while DTC decreased by 1% [23][24] Market Data and Key Metrics Changes - International revenue for Deckers increased by 50%, significantly contributing to overall growth [8] - EMEA and China were the largest contributors to international growth for both HOKA and UGG [11][24] Company Strategy and Development Direction - The company focuses on building premium brands through authenticity, innovation, and purpose [9] - HOKA aims to enhance its market presence through strategic retail expansions and improved consumer experiences [15][63] - UGG is leveraging its three sixty-five initiative to drive year-round sales, particularly in men's footwear and sandals [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic uncertainties and emphasized the importance of brand strength [30][42] - The company is cautious about consumer reactions to price increases and tariffs but remains optimistic about brand momentum [42][66] Other Important Information - The company repurchased approximately $183 million worth of shares during the first quarter [35] - The company ended the quarter with $1.7 billion in cash and equivalents, with no outstanding borrowings [35] Q&A Session Summary Question: HOKA's second quarter guidance and inventory status - Management indicated that HOKA is expected to grow 10% in Q2, with improvements in both wholesale and DTC channels [48][50] - Inventory for older models like Bondi Eight and Clifton Nine is largely cleared, with positive performance for Arahi Eight [51] Question: DTC growth and retail strategy - Management confirmed expectations for balanced growth between wholesale and DTC, with improvements anticipated in the U.S. market [60][62] - The company plans to expand its retail footprint, with new stores opening in key international markets [63] Question: Price increase strategy - The company is implementing selective price increases, with some products seeing increases of around $5 [71][75] - Price adjustments will be evaluated based on tariff impacts and consumer response [75] Question: HOKA's international performance and growth drivers - International growth is driven by strong sell-through rates and new distribution partnerships [91] - Management remains optimistic about healthy order books for the upcoming seasons [92] Question: SG&A outlook and spending control - SG&A expenses are expected to increase due to investments in brand building and marketing [94] - The company will manage expenses efficiently while continuing to invest in growth initiatives [96]