Core Insights - Deckers Outdoors Corporation (DECK) has shown strong brand performance, particularly with its HOKA brand, which has driven recent quarterly results [1] Sales Performance - In Q2 of fiscal 2026, HOKA's net sales increased by 11.1% year over year, reaching $634.1 million compared to $570.9 million in the same period last year [1][9] - Overall net sales growth for Deckers was 9.1% [1] - HOKA's wholesale channel saw a 13% year-over-year increase, while Direct-to-consumer (DTC) sales grew by 8% [2][9] Growth Drivers - HOKA's revenue rose by 15% in the first half of the fiscal year, driven by its main road running franchises: Clifton, Bondi, and Arahi [3] - The brand's growth was further supported by expanded trail offerings through the Mafate franchise [3] - Strong sell-through rates and positive consumer response to product enhancements indicate ongoing demand for HOKA's innovative product lineup [3][5] International Performance - HOKA performed well across all international regions, with significant revenue growth in EMEA and China [4] - In EMEA, the brand achieved strong results supported by market share gains and robust reorder activity from specialty partners [4] Future Outlook - Despite anticipating a cautious consumer environment in the second half due to pricing and tariff impacts, HOKA's innovative product pipeline and international strength are expected to sustain its growth [5] - Deckers expects HOKA to be a key growth driver in fiscal 2026, with revenue projected to rise at a low-teens rate [5] Competitive Landscape - American Eagle Outfitters reported a 6% increase in net revenue to $1.36 billion in Q3 of fiscal 2025, with a gross profit rise of 5% [6] - Boot Barn Holdings posted an 18.7% year-over-year net sales growth to $505.4 million in Q2 of fiscal 2026, with gross profit increasing to 36.4% of net sales [7] Valuation Metrics - Deckers trades at a forward price-to-earnings ratio of 15.07, which is lower than the industry average of 18.06 [10] - The Zacks Consensus Estimate for Deckers' earnings implies year-over-year growth of 1.1% for the current fiscal year and 6.3% for the next [12]

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]

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]