Deckers Outdoor Corp (DECK) Q2 2025 Earnings Call Highlights: Strong Revenue Growth and Raised ...

GuruFocus News
3 min read

In This Article:

  • Revenue: Increased 20% to $1.3 billion.

  • Gross Margin: 55.9%, up 250 basis points from last year.

  • Diluted Earnings Per Share: Increased 39% to $1.59.

  • HOKA Revenue: Increased 32% in the first half, reaching $2 billion over the trailing 12 months.

  • UGG Revenue: Increased 13% in the first half.

  • International Revenue: Increased 28% for the total company.

  • Direct-to-Consumer (DTC) Revenue: Increased 22% in the first half.

  • Wholesale Revenue: Increased 20% versus last year.

  • Cash and Equivalents: $1.23 billion as of September 30, 2024.

  • Inventory: $778 million, up 7% from last year.

  • Share Repurchase: $104 million worth of shares repurchased at an average price of $152.09.

  • Fiscal Year 2025 Revenue Guidance: Increased to approximately $4.8 billion, up 12% from last year.

  • Fiscal Year 2025 Gross Margin Guidance: Expected to be in the range of 55% to 55.5%.

  • Fiscal Year 2025 Diluted EPS Guidance: Increased to $5.15 to $5.25.

Release Date: October 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Deckers Outdoor Corp (NYSE:DECK) reported a 20% increase in revenue for the second quarter, reaching $1.3 billion.

  • The HOKA brand achieved a significant milestone by surpassing $2 billion in revenue over the trailing 12-month period.

  • Gross margins improved to 55.9%, up 250 basis points from the previous year.

  • Diluted earnings per share increased by 39% to $1.59, compared to $1.14 last year.

  • The company raised its full-year revenue growth expectations to approximately 12%, reflecting strong demand for its brands.

Negative Points

  • The company anticipates a more promotional environment in the second half of the fiscal year, which could impact margins.

  • There are concerns about macroeconomic pressures, including potential recessionary impacts and inflationary pressures.

  • Inventory levels increased by 7% compared to the same period last year, which could pose a risk if demand slows.

  • The company faces potential headwinds from increased freight costs, which have already impacted gross margins.

  • There is uncertainty regarding tariffs and geopolitical tensions, which could affect future financial performance.

Q & A Highlights

Q: Can you discuss the impact of higher-priced HOKA styles like Skyward X and Cielo X1 on top-line growth and brand expansion? A: Stefano Caroti, President and CEO, noted that Pinnacle products like Cielo X1 and Skyward X have exceeded expectations, breaking the $200 price point. Steve Fasching, CFO, added that these styles are crucial for market penetration and distribution expansion, improving both top-line growth and margin profiles.

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