Deckers Outdoor (DECK) Q1 2025 earnings summary

Executive summary

• Revenue grew 22% year-over-year to $825.3 million, with gross margin up to 56.9% and diluted EPS up 87% to $4.52, driven by strong wholesale and DTC channels.

• HOKA was the main growth driver, up 29.7% to $545.2 million, while UGG grew 14% to $223 million, both showing strong DTC and wholesale performance.

• International revenue increased 21%, led by robust DTC growth, and both brands captured healthy demand globally.

• Leadership transition announced: Stefano Caroti to become CEO in August 2024, succeeding Dave Powers.

• Agreement to divest Sanuk brand, expected to close August 2024.

Financial highlights

• Gross margin improved by 560 basis points to 56.9%, driven by favorable brand/product mix and higher full-price selling.

• SG&A expenses rose to $337.2 million, mainly due to increased marketing and talent investments.

• Ended quarter with $1.44 billion in cash, $753 million in inventory, and no debt.

• Repurchased $152 million in shares; $789.7 million remains under repurchase authorization.

• Net income rose 81.9% year-over-year to $115.6 million.

Outlook and guidance

• Fiscal 2025 revenue expected to grow 10% to $4.7 billion; HOKA to grow ~20%, UGG mid-single digits.

• Gross margin guidance raised to 54%, operating margin expected at 19.5%-20%, and EPS guidance increased to $29.75-$30.65.

• Guidance excludes Sanuk brand (pending divestiture) and assumes no major deterioration in macro risks.

• Board approved a 6-for-1 stock split, pending shareholder approval.

• SG&A as a percentage of net sales forecasted at 34%-34.5%.