Deckers(US:DECK)2024-02-02 02:09Financial Data and Key Metrics Changes - Total company revenue increased 16% to $1.56 billion, with DTC revenue rising 23% to represent 55% of total revenue [152][161] - Gross margins for the quarter reached 58.7%, up 580 basis points from last year's 53% [39][152] - Diluted earnings per share increased 44% to $15.11, compared to $10.48 in the previous year [144][152] Business Line Data and Key Metrics Changes - Global HOKA revenue grew 22% to $429 million, with DTC revenue increasing 38% [137][159] - Global UGG revenue reached $1.07 billion, a 15% increase, driven by a 20% rise in DTC [132][152] - Total portfolio DTC revenue increased 28%, with strong growth in consumer acquisition and retention [7][15] Market Data and Key Metrics Changes - HOKA's DTC channel represented over 40% of total brand revenue, up 5 percentage points from last year [137] - UGG's international regions grew close to 30%, contributing to the overall brand growth [7][132] - DTC growth was broad-based, with international DTC increasing 40% and domestic DTC increasing 16% [142] Company Strategy and Development Direction - The company is focused on long-term growth through innovative product development and strategic marketplace management [25][43] - HOKA is seen as the primary growth vehicle, with plans for category expansion and increased brand awareness [43][141] - UGG is diversifying its product line beyond traditional boots, introducing sneakers and performance products [198][201] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's momentum and the ability to sustain growth despite potential macroeconomic challenges [146][167] - The company anticipates continued strong demand for its products, particularly in the DTC channel [57][198] - Future guidance for fiscal year 2024 was raised to approximately $4.15 billion, reflecting strong demand [145][146] Other Important Information - The company repurchased approximately $100 million worth of shares at an average price of $507.95 [16] - The effective tax rate is projected to be approximately 22% [18] - Inventory levels were down 25% year-over-year, indicating strong sell-through and demand [40] Q&A Session Summary Question: What are the drivers of HOKA wholesale growth in Q4? - Management indicated that growth is driven by lean inventory levels, new product sell-in, and door expansion [64] Question: What percentage of UGG's business was from boots versus newer styles? - Management noted that the core Classics are maintained while growth is coming from new styles like the Lowmel sneaker [69][80] Question: How are pricing strategies affecting UGG's revenue? - Management stated that selective price increases on high-performing styles contributed significantly to revenue growth [74][105] Question: What is the long-term potential for UGG's revenue? - Management believes UGG has the potential to double its revenue, particularly with expanded product categories and international growth [124][126] Question: How is the company managing inventory between DTC and wholesale? - Management emphasized a balanced approach to inventory allocation to meet demand across channels [112] Question: What are the expectations for performance-related compensation in 2024? - Management confirmed an increase in performance-related compensation due to strong performance in FY2024 [118]