Deckers(DECK) - 2025 Q2 - Earnings Call Transcript

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$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$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]