Deckers(US:DECK)2024-05-23 23:52Financial Data and Key Metrics Changes - Deckers reported a record revenue of $4.288 billion for fiscal year 2024, an 18% increase compared to the previous year, driven by strong performance from HOKA and UGG brands [42][69] - Gross margin improved to 55.6%, up 530 basis points year-over-year, primarily due to higher full-price selling and favorable product mix [55][43] - Diluted earnings per share reached $29.16, representing a 51% increase from $19.37 in the prior year [56][42] Business Line Data and Key Metrics Changes - HOKA revenue for fiscal year 2024 was $1.8 billion, a 28% increase year-over-year, with DTC sales growing by 40% [31][42] - UGG generated $2.2 billion in revenue, reflecting a 16% increase, with DTC revenue up 22% [16][42] - DTC accounted for 43% of total company revenue, up from 40% in the prior fiscal year, with significant growth in both HOKA and UGG [7][42] Market Data and Key Metrics Changes - International markets contributed significantly to growth, with DTC revenue from international regions increasing by 37% [7][20] - UGG's international revenue growth rate was more than double that of the US market, indicating strong demand in global markets [20][19] - HOKA's brand awareness in the US rose to approximately 40%, while international regions averaged just over 20% [31][39] Company Strategy and Development Direction - The company aims to build HOKA into a multi-billion dollar global player in the performance athletic space while growing UGG with premium products [54][60] - Focus on maintaining a disciplined marketplace management strategy to preserve brand positioning and drive DTC growth [9][10] - Continued investment in product innovation and marketing to enhance consumer engagement and brand awareness [32][54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in entering fiscal year 2025 with strong momentum, expecting top-line revenue growth of approximately 10% [44][46] - Anticipation of a more normalized promotional environment with lower full-price selling compared to fiscal year 2024 [45][46] - Management highlighted the importance of maintaining high levels of brand heat and consumer engagement through innovative product offerings [39][54] Other Important Information - SG&A expenses for the fourth quarter were $395 million, representing 41.2% of revenue, an increase from the previous year due to higher marketing spend [41][71] - The company ended fiscal year 2024 with $1.5 billion in cash and equivalents, and inventory was down 11% year-over-year [56][42] - The company repurchased approximately $104 million worth of shares in the fourth quarter, with a total of over $415 million for the fiscal year [56][42] Q&A Session Summary Question: What is the outlook for HOKA's wholesale growth? - Management noted healthy demand from wholesale partners, with a focus on driving more revenue to DTC while maintaining tight wholesale channels [62] Question: How is UGG growing in terms of classic versus new styles? - Management indicated that classic styles maintain steady sales, while reimagined classics are resonating well with younger consumers, driving excitement and growth [82] Question: What are the expectations for international growth? - Management highlighted significant opportunities in international markets, particularly in Europe and Asia, with a focus on increasing brand awareness and distribution [78][74]