DECK — Deckers Outdoor Corporation

DECK (Deckers Brands) Q1 2027 Earnings Call Summary

1. Key Financial Results and Metrics:

• Revenue: $1.02 billion, up 5.7% year-over-year.
• Diluted EPS: $0.94, slightly above expectations and up from $0.93 in the prior year.
• Gross Margin: 56.4%, an increase of 60 basis points from last year.
• SG&A Expenses: $420 million, a 13% increase due to new hires, marketing investments, and higher rent costs.
• Inventory: $808 million, down 5% year-over-year.
• Cash and Equivalents: $1.6 billion, with no outstanding borrowings.
• Share Repurchases: Approximately $338 million at an average price of $103.79.

2. Strategic Updates and Business Highlights:

• Brand Performance:
  • HOKA: Revenue increased 8% to $704 million, driven by a 17% growth in DTC sales. Strong demand for new products like the Clifton Pro and Speedgoat 7.
  • UGG: Revenue grew 5% to $278 million, with balanced growth across DTC and wholesale channels. Focus on expanding men's offerings and year-round styles.
• Product Innovation: Continued emphasis on new product launches and maintaining a premium pricing strategy to enhance brand value and consumer engagement.
• Market Positioning: Both brands are focused on maintaining a clean marketplace with high full-price sell-through to protect margins and brand integrity.

3. Forward Guidance and Outlook:

• Fiscal Year 2027 Revenue Guidance: Expected in the range of $5.86 billion to $5.91 billion, reflecting high single-digit growth.
• HOKA Growth: Anticipated low double-digit growth, while UGG is expected to grow mid-single digits.
• Gross Margin Expectations: Slightly improved to above 56.5%, with ongoing tariff impacts considered.
• EPS Guidance: Projected between $7.35 and $7.50, reflecting increased gross margin expectations.

4. Challenges and Points of Concern:

• Tariff Impacts: Increased tariff rate assumption from 10% to 12.5%, which could pressure margins in the future.
• Competitive Landscape: New entrants and recovering competitors in the footwear market could pose challenges to HOKA’s growth.
• Consumer Behavior: While demand remains strong, there are concerns about the overall consumer backdrop being pressured, particularly in Europe due to rising energy prices.
• Promotional Environment: The company is maintaining a non-promotional stance, which is critical for brand integrity but could limit short-term sales growth.

5. Notable Q&A Insights:

• Product Demand: Management expressed confidence in the strong consumer response to new product launches, which is expected to support continued growth.
• Wholesale Dynamics: The shift in logistics has led to a timing difference in wholesale shipments, with expectations of acceleration in the second half of the fiscal year.
• DTC vs. Wholesale: DTC remains a strong growth driver, with no significant changes anticipated in the channel dynamics for the second quarter.
• Market Share: HOKA is gaining market share in performance running and trail segments, supported by innovative product offerings.
• Tariff Refunds: Ongoing efforts to secure tariff refunds were discussed, with a potential for future financial flexibility depending on the outcome.

Overall, Deckers Brands reported a strong first quarter with solid growth across its key brands, particularly HOKA, while navigating challenges related to tariffs and a competitive landscape. The company remains optimistic about its growth trajectory and strategic initiatives moving forward.