Deckers Outdoor (DECK) investor relations material

Executive summary

• Q2 net sales rose 3.5% to $1.481B; operating income increased 19.3% to $389.5M and net income rose 16.8% to $313.1M.

• Diluted EPS was $2.31, including a $0.28 tariff-refund benefit; excluding net refunds and related interest, EPS was $2.03, up 11.5% YoY.

• H1 sales grew 4.4% to $2.500B and diluted EPS increased 18.2% to $3.24; FY27 EPS guidance is $7.80–$7.95.

Financial highlights

• Q2 constant-currency sales increased 2.8%; gross profit rose 11.4% to $895.1M and SG&A increased 5.9% to $505.7M.

• Q2 gross margin was 60.5% versus 56.2%; operating margin was 26.3% versus 22.8%.

• H1 gross profit grew 9.6% to $1.470B; SG&A rose 8.9% to $925.5M.

• H1 operating cash flow was negative $9.3M versus positive $44.2M; cash and equivalents were $1.210B at September 30, with inventory of $860.8M and no borrowings.

• H1 diluted EPS was $3.24 versus $2.74; Q2 was $2.31 versus $1.82.

Outlook and guidance

• FY27 net sales guidance is $5.700B–$5.725B; HOKA growth is forecast in the high single digits and UGG growth in the low single digits.

• FY27 gross margin is expected at ~58.5%, SG&A at ~35.5% of sales and operating margin at ~23%; excluding refunds received to date, gross margin is expected at 57% and operating margin slightly above 21.5%.

• FY27 diluted EPS guidance is $7.80–$7.95, includes refunds received through Oct. 8 and assumes $1B of repurchases; no further refunds are assumed.

• Q3 revenue growth is expected in the low single digits; EPS guidance is $3.52–$3.60, including an approximately $0.24 tariff-refund benefit.

• Q3 gross margin is expected to exceed 60% versus 59.8% last year; >200 bps of refund benefit is partly offset by ~150 bps from freight and promotions.