Core Insights - Soaring demand for Hoka brand shoes significantly contributed to Deckers Outdoor's better-than-expected earnings and revenue for the second quarter, resulting in a notable increase in stock price [1] - Hoka sales increased by nearly 35% year-over-year, while Ugg brand sales rose by 13% [2] - The company has raised its full-year revenue outlook, anticipating approximately 12% growth to $4.8 billion, up from a previous estimate of 10% growth to $4.7 billion [2] Financial Performance - Deckers Outdoor reported second-quarter fiscal 2025 diluted earnings per share (EPS) of $1.59, with revenue rising 20.1% year-over-year to $1.31 billion, both surpassing analysts' expectations [1] - Hoka sales reached $579.9 million, reflecting a 34.7% increase, while Ugg sales amounted to $689.9 million, marking a 13% rise [2] - Domestic revenue grew by 14.2% to $853.9 million, and international revenue surged by 33% to $457.4 million [2] Market Reaction - Following the earnings report, Deckers shares increased over 12% to $170.41 in early trading, with a year-to-date gain of more than 50% [2]

Core Insights - Deckers Outdoor Corp (NYSE: DECK) reported better-than-expected fiscal second-quarter earnings and revenue, leading to a surge in stock price and an increase in full-year guidance [1] - Strong demand for the Hoka brand significantly contributed to the positive results, prompting six analysts to raise their price targets for the stock [1] - The stock rose by 12.2% to $170.63, marking its fifth consecutive quarter of post-earnings gains and a year-to-date increase of 53.5% [1] Stock Performance - Deckers Outdoor stock is currently trading at its highest levels since mid-June, supported by the ascending 200-day moving average, which has captured pullbacks since early August [1] - The options market is active, with 17,000 calls and 6,488 puts exchanged, representing 3.5 times the average daily options volume [1] - The most popular options include the weekly 10/25 185-strike call and the 172.50-strike call, with new positions being sold to open at the latter [1] Volatility Insights - The stock's Schaeffer's Volatility Scorecard (SVS) is 96 out of 100, indicating that it has tended to exceed options traders' volatility expectations over the past year [2]

Core Viewpoint - Deckers Outdoor (DECK) has reported strong fiscal second-quarter results, exceeding revenue and earnings expectations, and has raised its full-year profit forecast [1][3]. Financial Performance - For the three months ending September 30, Deckers' revenue rose by 20.1% year-over-year to $1.3 billion, with the Hoka brand experiencing a significant growth of 34.7% to $570.9 million [1]. - Earnings per share (EPS) increased by 39.5% from the previous year to $1.59, surpassing Wall Street's expectations of $1.24 per share [1]. - The company reported a 21% revenue growth in the first half of the fiscal year, driven by Hoka's 32% increase and UGG's 13% growth, along with a 28% rise in international sales [2]. Outlook - Deckers has raised its full-year revenue forecast to approximately $4.8 billion, reflecting an expected increase of about 12%, with EPS projected to be between $5.15 and $5.25 [3]. - The CEO indicated that the brands are well-positioned for the holiday season and are on track to meet the increased outlook for the fiscal year [3]. Market Sentiment - Deckers' stock has appreciated by 53% since the beginning of 2024, with analysts projecting further upside potential [4]. - The average analyst target price for DECK stock is $187.97, suggesting an implied upside of about 10% from current levels, with a consensus recommendation of "Buy" [4]. - Truist Securities has a bullish outlook with a "Buy" rating and a price target of $205, citing strong product resonance and innovation pipelines as key growth drivers [4][5].

Core Insights - Deckers Brands reported strong financial results for Q2 of fiscal 2025, exceeding Wall Street expectations, with shares rising 13.6% in after-hours trading [1] - The company has raised its fiscal 2025 guidance for both revenue and earnings, marking the second consecutive quarter of upward revisions [1][7] Financial Performance - Q2 fiscal 2025 revenue reached $1.31 billion, a 20% increase from $1.09 billion in Q2 fiscal 2024 [2] - Operating income rose to $305.1 million, up 36% from $224.6 million year-over-year [2] - Net income increased to $242.3 million, also a 36% rise compared to $178.5 million in the previous year [2] - Earnings per share (EPS) grew by 39% to $1.59 from $1.14 in the same quarter last year [2] Margin and Cash Position - Gross margin improved to 55.9%, up from 53.4% in the prior year [3] - Cash and cash equivalents at the end of the quarter were $1.23 billion, significantly up from $823.1 million year-over-year, with no long-term debt [3] Brand Performance - HOKA brand sales surged to $570.9 million, a 35% increase year-over-year, driving significant growth for the company [4] - UGG brand sales reached $689.9 million, reflecting a 13% increase [4] - Teva brand sales were $22.0 million, up 2%, while Sanuk and other brands saw declines of 48% and 16%, respectively [4] Distribution and Geography - Direct-to-consumer (DTC) sales were $397.7 million, a 20% increase, while wholesale sales also grew by 20% to $913.7 million [5] - Domestic sales totaled $853.9 million, a 14% increase, while international sales rose 33% to $457.4 million [5] Management Commentary - CEO Stefano Caroti emphasized strong consumer demand for HOKA and UGG products and a commitment to growth through innovation and a consumer-first approach [6] Updated Guidance - Revenue guidance for fiscal 2025 has been raised to a 12% year-over-year increase, now expected to reach $4.8 billion, up from a previous estimate of 10% growth [7] - EPS guidance has been adjusted to a range of $5.15 to $5.25, reflecting a growth of 6% to 8% [7]

Company Performance - Deckers Outdoor (DECK) reported fiscal Q2 earnings of $1.59 per share on revenues of $1.31 billion, exceeding Zacks consensus estimates of $1.22 per share and $1.20 billion in revenue, leading to an 8% increase in shares [2] - Skechers (SKX) achieved Q3 earnings of $1.26 per share and record-high revenues of $2.35 billion, surpassing expectations of $1.15 per share and $2.32 billion in revenue, resulting in a 13.5% rise in shares [3] Economic Indicators - The S&P Manufacturing PMI improved to 47.8 from an expected 47.5, while the Services PMI remained at 55.3, indicating moderate economic activity [4] - New Home Sales for September were reported at 738K, exceeding the estimate of 720K and the previous month's 709K, suggesting a positive sentiment influenced by lower mortgage rates [4] Market Overview - The stock market showed mixed results, with the Dow down 140 points (-0.33%) primarily due to a 6% drop in IBM shares following a mixed Q3 report, while the S&P 500 and Nasdaq rose by 0.21% and 0.76% respectively [1]

Company Performance - Deckers reported quarterly earnings of $1.59 per share, exceeding the Zacks Consensus Estimate of $1.22 per share, and up from $1.14 per share a year ago, representing an earnings surprise of 30.33% [1] - The company achieved revenues of $1.31 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 9.58%, compared to $1.09 billion in the same quarter last year [1] - Over the last four quarters, Deckers has consistently surpassed consensus EPS and revenue estimates [1] Stock Performance - Deckers shares have increased approximately 35.5% since the beginning of the year, outperforming the S&P 500's gain of 21.5% [2] - The current Zacks Rank for Deckers is 3 (Hold), indicating expected performance in line with the market in the near future [4] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $2.53 on revenues of $1.71 billion, and for the current fiscal year, it is $5.30 on revenues of $4.79 billion [4] - The trend of estimate revisions for Deckers is currently mixed, which may change following the recent earnings report [4] Industry Context - The Retail - Apparel and Shoes industry, to which Deckers belongs, is currently ranked in the top 17% of over 250 Zacks industries, indicating a favorable outlook [5] - Another company in the same industry, Lulu's Fashion Lounge Holdings, Inc., is expected to report a quarterly loss of $0.07 per share, with revenues projected at $77 million, down 7.4% year-over-year [5]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 increased by 20% year-over-year to $1.311 billion, with gross margins at 55.9%, up from 53.4% last year [9][25][27] - Diluted earnings per share rose 39% to $1.59 compared to $1.14 in the previous year [9][27] - Cash and equivalents at the end of September 2024 were $1.23 billion, with inventory at $778 million, a 7% increase year-over-year [28] Business Line Data and Key Metrics Changes - HOKA brand revenue grew 32% in the first half, reaching $2 billion in trailing 12-month revenue for the first time [10][11] - UGG brand revenue increased by 13% in the first half, driven by strong performance in key initiatives and international markets [16][20] - Direct-to-consumer (DTC) revenue for HOKA increased by $100 million, while UGG DTC revenue grew by $25 million [21][22] Market Data and Key Metrics Changes - International revenue for HOKA grew significantly, outpacing U.S. growth, with strong performance in Europe and Asia [14][15][19] - UGG's international markets maintained high demand, with Europe showing exceptional DTC growth [18][19] - Overall, revenue growth was balanced across DTC and wholesale channels, with DTC global revenue increasing by 22% [21][22] Company Strategy and Development Direction - The company is focusing on a consumer-first mindset, brand-less philosophy, innovation, and global market expansion as guiding principles for future growth [8][9] - HOKA aims to become a leading performance athletic brand through innovation, while UGG focuses on evolving iconic franchises [32] - The company is strategically managing its marketplace to maintain strong consumer demand and market share [24][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brands' ability to capture market share despite a dynamic consumer environment [24][31] - The company anticipates a more promotional environment in the second half of the fiscal year but remains optimistic about maintaining premium pricing [20][30] - Updated guidance for fiscal year 2025 includes a revenue growth expectation of approximately 12% and an increase in diluted earnings per share to the range of $5.15 to $5.25 [29][30] Other Important Information - A six-for-one forward stock split was executed, affecting share prices and financial metrics [5] - The company has a remaining authorization of approximately $685 million for share repurchase [28] Q&A Session Summary Question: Impact of higher-priced styles on HOKA's growth - Management noted that new Pinnacle products have exceeded expectations, contributing positively to both top-line growth and brand margin profile [34][35] Question: Guidance for HOKA's growth in the second half - Management indicated that while first-half growth was strong, they expect a moderation in the second half due to earlier wholesale shipments and controlled distribution [37][39] Question: Performance in Asia, particularly China - Management reported strong performance in China despite economic challenges, with HOKA gaining market share in major races [68]

Financial Performance - Second quarter FY 2025 revenue increased 20.1% to $1.311 billion compared to $1.092 billion[2] - Diluted EPS for the second quarter FY 2025 increased 39% to $1.59 compared to $1.14[2] - FY 2025 revenue guidance raised to approximately $4.8 billion, reflecting an expected increase of about 12%[6][7] - Gross margin for the second quarter FY 2025 was 55.9%, up from 53.4% in the same period last year[2] - Direct-to-Consumer (DTC) net sales increased 19.9% to $397.7 million, with comparable DTC net sales up 17.0%[2] - International net sales increased 33.0% to $457.4 million compared to $343.9 million[2] - HOKA® brand net sales increased 34.7% to $570.9 million, while UGG® brand net sales increased 13.0% to $689.9 million[3] Shareholder Actions - The company repurchased approximately 686 thousand shares for a total of $104.3 million at an average price of $152.09 per share[5] Expenses and Liabilities - SG&A expenses for the second quarter FY 2025 were $428.2 million, compared to $358.4 million in the prior year[2] - Total current liabilities increased to $875,640 thousand from $719,993 thousand, an increase of 21.6%[19] - Trade accounts payable rose to $536,581 thousand, up from $378,503 thousand, representing an increase of 42.0%[19] - Other long-term liabilities decreased to $89,296 thousand from $94,820 thousand, a decline of 5.9%[19] Assets and Cash Position - The company had cash and cash equivalents of $1.226 billion as of September 30, 2024, compared to $823.1 million a year earlier[4] - Total current assets increased to $2,701,294 thousand as of September 30, 2024, up from $2,443,483 thousand as of March 31, 2024, representing a growth of 10.5%[19] - Cash and cash equivalents decreased to $1,225,681 thousand from $1,502,051 thousand, a decline of 18.4%[19] - Trade accounts receivable increased significantly to $537,137 thousand, up from $296,565 thousand, reflecting an increase of 81.1%[19] - Inventories rose to $777,891 thousand, compared to $474,311 thousand, marking a 64.0% increase[19] - Total assets increased to $3,398,136 thousand from $3,135,579 thousand, reflecting a growth of 8.4%[19] - Total stockholders' equity grew to $2,223,239 thousand, up from $2,107,468 thousand, indicating an increase of 5.5%[19] - Long-term operating lease liabilities decreased slightly to $209,961 thousand from $213,298 thousand, a reduction of 1.6%[19]

Core Viewpoint - Deckers Outdoor Corporation is set to announce its second-quarter fiscal 2025 earnings on October 24, with expectations of revenue growth and a positive bottom line despite market challenges [1]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for Deckers' revenues is $1.20 billion, reflecting a 9.6% increase from the previous year [1]. - The earnings per share (EPS) estimate has risen to $1.22, indicating a 7% growth year-over-year [1]. - Deckers has a trailing four-quarter earnings surprise average of 47.2%, with a 25.9% outperformance in the last reported quarter [1]. Brand Performance - The UGG brand is expected to see a 2% increase in sales, while HOKA is projected to grow by 20.9% year-over-year [3]. - Conversely, the Teva brand is anticipated to face a 3.3% decline in sales [3]. Direct-to-Consumer Strategy - Deckers is focusing on expanding its direct-to-consumer channels, with expected revenue growth of 15.8% year-over-year from this segment [4]. - Enhancements in online and in-store experiences are aimed at increasing sales volumes and capturing higher profit margins [4]. International Expansion - The company is targeting international markets, particularly in regions like China and EMEA, to boost market share and brand recognition [4]. Margin Pressures - Anticipated gross margin contraction of 180 basis points is expected due to rising costs and a shift towards a normalized promotional environment [5]. - SG&A expenses are projected to increase as a percentage of net sales, leading to a 300 basis points contraction in operating margin [5]. Earnings Prediction Model - The Zacks model indicates a likelihood of an earnings beat for Deckers, supported by a positive Earnings ESP of +2.77% and a Zacks Rank of 3 (Hold) [6].

Core Insights - Deckers (DECK) is expected to report quarterly earnings of $1.22 per share, a 7% increase year-over-year, with revenues projected at $1.2 billion, reflecting a 9.4% year-over-year increase [1] Financial Projections - The consensus estimate for 'Net sales by brand and channel- UGG brand- Total' is $628.71 million, indicating a 3% year-over-year change [2] - 'Net sales by brand and channel- Teva brands- Total' is estimated at $20.94 million, showing a decline of 2.6% year-over-year [2] - 'Net sales by brand and channel- Other brands- Total' is projected to reach $31.08 million, reflecting a 1.6% year-over-year increase [2] Brand-Specific Sales Estimates - 'Net sales by brand and channel- HOKA brand- Total' is forecasted at $516.65 million, representing a significant 21.9% increase from the prior-year quarter [3] - 'Net sales by brand and channel- Sanuk brands- Total' is expected to be $3.29 million, indicating a substantial decline of 39.1% year-over-year [3] - 'Net sales by brand and channel- Teva brands- Wholesale' is projected at $11.12 million, reflecting an 8.5% decrease from the prior-year quarter [3] - 'Net sales by brand and channel- UGG brand- Wholesale' is estimated to reach $462.97 million, indicating a 2.5% increase year-over-year [3] - 'Net sales by brand and channel- HOKA brand- Direct-to-Consumer' is expected to be $208.05 million, reflecting a 29.2% year-over-year increase [3] Additional Sales Insights - 'Net sales by brand and channel- HOKA brand- Wholesale' is projected at $305.55 million, indicating a 16.2% year-over-year increase [4] - 'Net sales by brand and channel- Teva brands- Direct-to-Consumer' is estimated at $9.78 million, reflecting a 4.5% year-over-year increase [4] - 'Net sales by brand and channel- UGG brand- Direct-to-Consumer' is expected to reach $166.72 million, indicating a 5.1% year-over-year increase [4] - 'Net sales by brand and channel- Other brands- Wholesale' is projected at $30.77 million, reflecting a 3% year-over-year increase [4] Market Performance - Over the past month, Deckers shares have returned +7.4%, outperforming the Zacks S&P 500 composite's +4.5% change [4]