Financial Data and Key Metrics Changes - The company reported a revenue increase of 9% in the second quarter, with total revenue for the first half growing by 12% [7][26] - Diluted earnings per share (EPS) increased by 14% in the second quarter and by 17% in the first half [7][30] - Gross margin for the second quarter was 56.2%, up 30 basis points from 55.9% in the previous year [28][29] Business Line Data and Key Metrics Changes - HOKA revenue increased by 15% in the first half, driven by updates to major road-running franchises and strong international performance [10][20] - UGG revenue rose by 12% in the first half, with men's footwear growing at twice the rate of the overall brand [20][21] - HOKA's wholesale channel grew by 13% in the second quarter, while DTC (Direct-to-Consumer) grew by 8% [26][27] Market Data and Key Metrics Changes - International regions were the primary growth drivers for both HOKA and UGG, with UGG and HOKA revenue in international markets increasing by 38% year-over-year [7][20] - HOKA gained two points of market share in the U.S. road-running category and outpaced competition in Europe [11][15] Company Strategy and Development Direction - The company aims for continued international expansion and a balanced approach between DTC and wholesale channels, targeting a 50/50 split [9][18] - The focus remains on building brand awareness and consumer engagement through strategic marketing initiatives [8][19] - The company is committed to sustainable growth and long-term value creation for both HOKA and UGG brands [36][37] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding consumer sentiment in the U.S. due to macroeconomic pressures, but remains optimistic about brand positioning for the holiday season [40][43] - The company anticipates a more challenging environment in the second half due to tariff impacts and shifts in consumer preferences [34][35] 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 [31] - 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 [32][33] Q&A Session Summary Question: Guidance reinstatement and growth expectations for HOKA and UGG - Management indicated that the guidance reflects a cautious outlook due to anticipated consumer behavior changes and tariff impacts, but remains confident in brand strength [40][42][43] Question: DTC and wholesale channel dynamics - Management explained that while wholesale growth has been strong, DTC is expected to improve in the back half of the year as inventory dynamics normalize [56][57] Question: Long-term margin structure and tariff impacts - Management acknowledged that while tariff pressures will continue, they are committed to maintaining strong operating margins above 20% in the long term [58][60] Question: Price actions and consumer demand - Management noted that price increases have not negatively impacted demand, with strong sell-throughs for key styles [68][70] Question: Order book health and consumer behavior - Management expressed satisfaction with the order book for spring/summer 2026 and noted that consumer behavior has shown deeper valleys and higher peaks due to uncertainty [80][84]

Financial Data and Key Metrics Changes - The company reported a revenue increase of 9% for Q2 2026 compared to the previous year, with diluted earnings per share growing by 14% [7][29] - Total company revenue for the first half of fiscal 2026 grew by 12%, with HOKA revenue increasing by 15% and UGG revenue rising by 12% [7][21] - Gross margin for Q2 was 56.2%, up 30 basis points from 55.9% in the previous year, benefiting from price increases and favorable product mix [32][34] Business Line Data and Key Metrics Changes - HOKA's revenue in the first half increased by 15%, driven by updates to major road running franchises and strong sell-through rates [11][12] - UGG's global revenue in the first half increased by 12%, with men's footwear growing at twice the rate of the overall brand [21][22] - HOKA's wholesale revenue grew by 13% in Q2, while UGG's wholesale increased by 17%, partially offset by a 10% decline in UGG's DTC [30] Market Data and Key Metrics Changes - International regions drove UGG and HOKA revenue growth, with international sales increasing by 38% year-over-year [8] - HOKA gained two points of market share in the U.S. road running category over the past twelve months, outperforming competitors in Europe [12][18] - The U.S. marketplace remains dynamic, with a shift towards multi-brand shopping experiences impacting consumer behavior [9][30] Company Strategy and Development Direction - The company aims to achieve a balanced business model with 50% of sales from direct-to-consumer (DTC) and 50% from wholesale channels [10] - Strategic focus on brand building and marketing investments to enhance consumer awareness and expand market share for HOKA and UGG [8][39] - The company is committed to long-term sustainable growth, managing brands for profitability rather than chasing short-term sales [49][95] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding consumer sentiment in the U.S., anticipating a more cautious consumer environment due to inflation and price increases [44][94] - The company remains confident in the growth trajectory of HOKA and UGG, with expectations for continued strong demand and market share gains [39][40] - Tariff impacts are expected to be significant in the second half of the fiscal year, with mitigation strategies in place to offset some of the pressures [37][70] Other Important Information - The company ended Q2 with $1.4 billion in cash and equivalents, with no outstanding borrowings [34] - Share repurchases totaled approximately $282 million during the quarter, reflecting the company's commitment to returning value to shareholders [35] Q&A Session Summary Question: About the guidance reinstatement and consumer behavior - Management acknowledged a cautious consumer outlook due to tariffs and price increases but emphasized the strength of their brands and long-term growth strategy [44][49] Question: Insights on the back half guidance for HOKA - Management indicated more pressure in Q3 with expectations for stronger growth in Q4, depending on consumer behavior during the holiday season [55][56] Question: DTC versus wholesale channel dynamics - Management expects improvements in DTC sales in Q3 and Q4, with a focus on balancing growth between DTC and wholesale channels [63][81] Question: Long-term margin structure and tariff impacts - Management confirmed that tariff pressures will continue to affect margins, but they are committed to maintaining strong profitability levels [68][70] Question: Pricing actions and consumer demand - Management reported that price increases have not negatively impacted demand, with strong sell-throughs for key styles [77][78]

Deckers Outdoor (NYSE:DECK) Q2 2026 Earnings Call October 23, 2025 04:30 PM ET Speaker7Good afternoon, and thank you for standing by. Welcome to the Deckers Outdoor Corporation Second Quarter Fiscal 2026 earnings conference call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. If anyone has any difficulties hearing the conference call, please pres ...

Core Insights - Deckers Outdoor Corporation (DECK) reported strong first-quarter fiscal 2026 results, driven by flagship brands HOKA and UGG, with revenues of $964.5 million, a 17% year-over-year increase, and earnings per share rising 24% to 93 cents, indicating robust consumer demand [1][11] Group 1: Brand Performance - HOKA emerged as the primary growth driver, achieving record quarterly revenues of $653.1 million, a 19.8% increase from the prior year, supported by global wholesale expansion and strong international demand [2][11] - UGG experienced 18.9% growth, reaching $265.1 million, marking its largest June quarter in history, with success attributed to diversification into men's footwear and year-round styles [3][11] Group 2: Strategic Initiatives - The company’s 365 initiative has successfully broadened UGG's consumer base while maintaining its iconic appeal, aided by strong wholesale momentum and new product launches [3][11] - Deckers has implemented selective price increases and operational efficiencies to counteract rising tariffs and freight costs, although these measures may impact near-term profitability [4][5] Group 3: Future Outlook - For second-quarter fiscal 2026, net sales are projected between $1.38 billion and $1.42 billion, with HOKA expected to grow by 10% and UGG anticipated to see mid-single-digit growth [6] - Deckers is well-positioned for continued long-term growth, with HOKA leading performance in running and UGG evolving into a versatile lifestyle brand [5]

Core Insights - Deckers Outdoor Corporation's international business is a key growth driver, with HOKA and UGG showing strong performance abroad, particularly in the first quarter of fiscal 2026 where international revenues increased by 49.7% year over year to $463.3 million, significantly outperforming U.S. sales [1][10] International Business Performance - HOKA's international growth is robust, especially in the EMEA region, with record European reorders and strong consumer acquisition. Key products like Bondi, Clifton, and Arahi are leading sales, with Bondi and Clifton being top U.S. running franchises and doubling volumes in China for spring/summer 2025 [2] - UGG has also seen strong international growth, particularly in Europe and China. The brand's 365 strategy has expanded its appeal beyond cold-weather items, with new styles like the PeakMod clog gaining popularity, supported by effective marketing campaigns [3] Infrastructure and Strategic Investments - To meet rising demand, Deckers has invested in infrastructure, including changing its EMEA logistics provider and opening new stores in cities like Berlin, Milan, and various locations in China. These initiatives aim to enhance retail presence and build long-term brand equity [4] Future Outlook - Management anticipates that international markets will continue to outpace U.S. growth, with HOKA positioned as the fastest-growing brand and UGG expanding its seasonal and demographic reach. The goal is to increase international sales to 50% of total revenues, creating a more balanced and resilient business model [5] Competitive Landscape - In comparison, Steven Madden, Ltd. reported an 8% year-over-year increase in international revenues for the second quarter of 2025, while Wolverine World Wide, Inc. saw a 15.7% increase to $250 million, both outpacing U.S. sales [6][7][8] Valuation and Earnings Estimates - Deckers shares have declined by 46.3% year to date, contrasting with the industry's decline of 9.6%. The company trades at a forward price-to-earnings ratio of 16.80X, below the industry average of 18.22X [9][12] - The Zacks Consensus Estimate for Deckers' fiscal 2026 earnings suggests a slight decline of 0.6%, while fiscal 2027 indicates an 8.3% increase, with recent upward revisions in earnings estimates for both fiscal years [13]

Core Insights - Deckers Outdoor Corporation's international business is a key growth driver, with international sales increasing by 49.7% year-over-year to $463.3 million in Q1 of fiscal 2026, significantly outperforming U.S. sales [1][9] - HOKA and UGG brands are contributing to this growth, with HOKA's international wholesale revenues rising by 30% year-over-year, particularly in EMEA and APAC regions [2][9] - UGG experienced a 19% revenue increase, driven by successful product launches and marketing initiatives in EMEA and China [4][9] International Performance - HOKA's flagship models, Bondi and Clifton, saw volumes double year-over-year in China, while the new Arahi 8 exceeded expectations [3] - HOKA's global campaign "Together We Fly Higher" aims to strengthen brand connection and has expanded its retail presence to 48 stores globally [3] - UGG's 365 initiative has been successful globally, with popular styles like the Goldenstar Glide and Lowmel driving sales [4] Future Outlook - Deckers anticipates continued international growth, supported by premium products, expanding retail presence, and regional marketing investments [5] - The company is well-positioned for sustainable international expansion through fiscal 2026 and beyond [5] Financial Performance - Deckers' shares have declined by 42.5% year-to-date, compared to an 8.2% decline in the industry [6] - The forward price-to-earnings ratio for Deckers is 18.47X, slightly below the industry average of 18.56X [7] Earnings Estimates - The Zacks Consensus Estimate for Deckers' fiscal 2026 earnings indicates a year-over-year decline of 2.7%, while fiscal 2027 estimates show an increase of 8.6% [11]