DECK - Earnings call transcript Q1 2023 | Deckers Outdoor Corporation

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Operator

Good afternoon, and thank you for standing by. Welcome to the Deckers Brands First Quarter Fiscal 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session and instructions will be provided at that time for you to queue up for questions. [Operator Instructions] I would like to remind everyone that this conference call is being recorded. the Corporate to Planning. turn Investor Kohler, now and Relations will call Erinn over VP, I Please ahead. go

Erinn Kohler

Hello, and thank you, everyone, for joining us today.

is Fasching, call Officer; the Dave and President On Chief and Steve Chief Officer. Financial Powers, Executive

and for and strategies; All the I changes statements regarding begin, subject and harbor segmentation for our of federal our of consumer product the impact to by changes COVID-XX product today, strength conditions. of this performance; changes forward-looking and chain; uncertainties. capital securities of safe on historical call our note macroeconomic changes the qualify Please forward-looking anticipated forward-looking demand of to behavior, of statements supply our allocation, our include potential and we liability statements and our plans remind to to our strategies; products; Litigation intended within everyone allocation would distribution and facts Before policy. strategies; our this made statements the brands are in considerable of certain statements harbor and on financial position; risks business are brand repurchase shares; laws, impacts established statements on safe to the expenses; Reform environment These our from gross revenues; liquidity operations margins; that mix; and are pandemic inventory the Act marketing statements the call which Securities company’s Private than are of to on other XXXX. meaning like the made

such information represent based statements available time management’s the made current statements expectations on call Forward-looking are made. are this at on and

company Form any expressly the SEC XX-Q. and update statements. reports it the Except materially explained Form listing known Dave. that or on the Exchange, some these to its numerous law intent factors actual or With cause and any the Risk of and predicted, statements. as annual by its rules or I’ll risks company filings, of and Forward-looking implied of by disclaims from assumed including XX-K results to forward-looking The may that, and over Stock Factors forward-looking other the to section now statements uncertainties turn risks, required on has our unknown any uncertainties quarterly differ results involve obligation report York in New

Dave Powers

thank dive Thanks, of to into Erinn. towards everyone, exceptional strong joining XXXX Good progress further which strategies. a excited year afternoon, represent for today. and another us our quarter I’m to long-term results, fiscal and start you

revenue primarily per million, quarter Revenue year $XXX share HOKA first earnings With growth ever quarter. First brand as achieved $X.XX. increased and $XXX versus XX% its we to million of delivered was last driven by the as the strong year further HOKA historical and to growth, of continue to profitable the diversifying our the first expansion we able of deliver demand another we portfolio were through quarter mix. HOKA round category seasonality reduce

consumer strategic first a geographic momentum grow UGG demonstrated performance result HOKA and markets through behind vision acquisition major space the our Importantly, long-term and investments. build our brands the in and our DTC multibillion international quarter dollar athletic diversify retention, drive product, mix, player seasonal business through further to into

We progress initiatives. clear of each are these making in

these across into and of international revenue respectively, Deckers last shifted marketplace which towards increasing result our During retention XX% all XX% XX% Global the consumer includes revenue revenue exciting mix earlier and UGG XX% portfolio regions, growth. year, regional million, versus of markets highlights from increased as capabilities omni-channel markets reflect distributor brands from quarter, DTC of shipments. versus $XXX UGG year-over-year delivered and sandals a by the styles. acquisition last management and of These brands. XX%, strength mix increase of across drove fall HOKA an products first year. seasonal grew shifted international global as away

managing distribution Deckers. to well, channels approach as future and the brands, disciplined of serve continues we Our to create us markets

brands GDP I’m macroeconomic this the and DTC dynamic by operational around our as versus infrastructure first call. the existing will share audience specialty led our In by financial XX as brand the brands strengthen on-demand these doors fastest into and quarter, highest The globe the Doubling driven benefited demand were consumers, last highlights provide environment. consumer partially nimble data. versus is rate A global performance whole we of additional expectations entire within scale work acquisition towards now increased added the global the both Steve continues are improving China driving strength off a as and In permanent team’s brands in France a last environment run The of with increasing third while our ability the and brand global higher specialty, of with region. increased significant City by the store fit quarter This quarterly HOKA retained especially gains positive across peak European New momentum a far versus forward-looking for find the U.S., growth select as least international by as brand drive periods year, which the continued the XX% continued quarter by trailing utilizes China, is wholesale a increasing HOKA of include increasing the the spring in and selling few XX is HOKA the HOKA of half of reaching U.S. aggregated with XX% the also by brand feature activity. accounts revenue York XX% HOKA strategic retail DTC voice accounts. fiscal run growth is that global region. on city according led overall accounting the strong performance. new brands with to Deckers network. first building of indicators XXXX. equipped the calendar resulted eating at merchandising strategy Paris, This an retail the ecosystem as HOKA barrier revenue in in benefited HOKA year, of some growing points. conversion growing opening year, we’re during design distribution the to HOKA later endeavor locations The that increasing and with stores well XX% for XX, location milestone brands HOKA the to price market access as price for store U.S. Deckers have consumer exciting new driving enhancing increasing local build HOKA for year for experience, excited upon in visual been consumers with consumers the the With next points top breaking meantime, during as consumers. purchase by quickly, global details opening much from quarterly its to meantime, was markets gains further in We across market a growth and took revenue This China’s confident featured countries influenced year, and the continued in in with its location last in regional dollar is In full goals styles last the dive million. refined wholesale deliver year evolving our our the distributors with and elevated commanding delivered is timing and the EMEA York revenue will representing premium our strategically Focus build revenue highlighted which continued versus from share of for first While selling and our last brand. our months, growth outstanding global With the its during U.S. more to to higher traffic open which awareness Starting led year exciting the slow first to quarter total and for we in leading prices. a brands styles at premier portfolio XXXX. levels new rates time Japan time. has the new channel that an achievement Across growth excitement month. stores of versus performance revenue pop-up better was compelling region, markets. and the City second and XX% Center HOKA and APAC stores is build HOKA to year billion let’s share New Lincoln and the $XXX highlights, that within a remain more XX% team is exceptional near a ahead. as than June UGG

giving seeing appetite retail greater us last the a in opened and was which in location driving conversion, X excellent for is traffic Chicago strong confidence consumer months stores. HOKA Our even

a to opportunity to take to approach that on the acquired disciplined consumers number and of engage prior levels in around markets, consumers opening limited the key cities HOKA the retained global about direct-to-consumer with doors. continues We Further the we’re world. across increase to number a of excited will But year. remarkable compared

purchasing XX acquisition quarter, year mix far increased XX% gains percentage old, XX increase a to the to the During of versus outpacing from increases. and consumers XX DTC old XX to X individuals these XX% led retention This point year year, with among last hoka.com. among in increased

around the the the brand The thoughtfully an continues behind dubbed inspire momentum Human brand for earth. echoed to to designed its as ethos HOKA incredible invitation seeing arrived. over HOKA Fly through humans integrated campaign are experience new as to We This is fly Fly. HOKA world campaign marketing globally was the humans

a a The a player now. product space redesigned human and the X the storytelling features has a And brand into Fly which reach we’ve the been were We the quickly and But in site. the impact of which on presentation the intent a feedback part major a of campaign, greater edition visibility long-term. significant a pleased detail brand technical the audience. performance dollar have elevates we Mach, of campaign expand website. new with just multibillion over the completely fly fifth response brand throughout as the will our top to this with for the partners. website as brand, aligns new awareness over consumer human believe campaign’s at HOKA well has that as values become live with of As HOKA building the enhances launched new, for fly fly hoka.com, page style upgraded month for the aesthetic of XX% wholesale very been visitors consumer landing and

which trail performance, for the wearing in competing redesigned ever I’d having is brands XXX all to with XXX states emphasize competed sponsored This Adam weight athletes winning Adam is states mile shoe like the to this won while with HOKA XXX. for inspire peak and congratulate of traction the brand, feat completely race. X, terrain. first was an that brand’s mile a sponsored confidence Western like achieve congratulations this and Other who athletes performance XXXX popular time performance. less leadership launched race. to a Adam of most levels incredible HOKA HOKA Western his enabling premier Peterman, these athlete, Speaking year’s in been enhanced any other Speedgoat in recently of Results to Megagrip HOKA He version Vibram

sell strategies the fall Moving UGG marketplace Coquette as that in newly international global was dynamics of such as sandal, year quarter’s the driving to during sell direct-to-consumer all marketplace impacting the and that shift category Sport with transition are was distributor the from able last dollars. higher launched product selling in UGG and Ultra to by benefits global season, build opportunities to $XXX touching driving international limited and buy results. overseas. X% in price the UGG impacting incremental DTC. implemented brands holiday by brand wholesale offset quarter as Yeah season, With market demand the million on business. generate brands driven segmentation core regions The allocation to heat decreased versus the and dynamics, past styles full the UGG, Mini and through revenue the captured was continue increased the Outperformance open experience to drive which through. share category spring Briefly global well

consumer included turn team winter to which of with product Sandal. spring, last the consumers and franchise demand the brand of the the and styles, evolve for the couple standout comfortable Expecting shifts the as for UGG in of the the behavior outside more outdoor fall Over UGG Fluff slippers the towards and stylish summer timeframe. introduction the category during ready to experienced home. wearing, hybrid quarter years, franchise Sandals Yes Sport wear continued UGG in showing to for the increased outdoor were the strong relevance

including exceptional consumer in sandal That style product into consumers, below UGG old. franchise category even demand lower among and acquire continues year shifting with X and these QX year. mix to heritage selling increases from retain the revenue in Across of experienced said, price Yeah the the created in brand shifts, dollars headwind be a retain styles prior direct-to-consumer Fluff are XX consumers versus due adoption average ready the X% for as to beach a fluff during The revenue sold year though were last XX relative volumes successful styles. and as While XX% to the to top global that years. respectively remain the of and Fluff acquired robust last

figures we trending ahead retention styles the sandals, new driving aforementioned the franchise to fashion gains and Sport on fire. consumer continue of Yeah, which acquisition He global as Fluff and overseas. well Clem heat these acquisition as as international globally be continues in the Importantly, and are Yeah star to include golden DTC brand build well Tasman

to of Nike’s believe solid start XXXX. successful to excited diverse We with omni-channel on continued enabled We including the maintain by a and are for the announcement franchise well like new significant The role. primarily the Strengthen cross the encouraged XX% channels the UGG. experience also for Overall, channel to well year accounts. in and periods contributed historical revenue in functional our call. recently with benefit added from President which with brands last teamwork of channel. XX% product to of Lifestyle. evolution further that a hand UGG HOKA, market international for Chief And Anne, first performance herself With bottom running few the over consumer X represented of across a growing brand I’m positioned first Overall, ago, through year. marketplace and to was our doors with as assortment. across as recent was increases quarter retention for for more on global brands as the by weeks gains gains brand’s offset a as e-commerce, broader drive even and year nearly revenue, HOKA fiscal represented quarter year fiscal driven has to interest benefits HOKA I’ll that, adoption peak these DTC product Fashion selling for the year. of priorities shift as XX% brands the well which from is the increased our UGG industry, her on a based the as the DTC was the results, the DTC revenue diverse completed continued up we team outlook outside our brand brands that UGG Merchant, Spangenberg begins after dynamics the quarter driver category UGG line. for of to is UGG. brand the most financial earlier business future, all strategic the continue UGG, already welcome, to consumer call quarter, fill primary to from partially direct-to-consumer provide ground most Anne HOKA building occurring to leader the the the with as especially wholesale serving things our resulted hit functional the as diversification, I as she of proven the covered quarters all meaningful business in which years partners. global details last from in building reaffirmed brand Anne work market this in focusing upon XX% brand, cross our strategic team by and in From versus to XXXX. first profitable of quarter creative brand’s unique perspective This UGG and wholesale our growth revenue continues influence, the I’d In and Steve and UGG, and seasonal activities. our our consumer we’ll be collaboration HOKA dynamic increasing global distributors strong is direct-to-consumer just a position to year business the the On segment on last share and reset adoption assortment talented continued the regions, for the prior XX% product and growth from benefit among role, thank adoption engage to versus first marketplace. immerse acquisition

Steven Fasching

everyone. good and Dave, afternoon, Thanks,

quarter. guidance quarter May, With toward number feel in shifts As of Dave selling as came year share. lower to deliver year. ongoing business the ahead progress well to excited due advanced fiscal in another in driver we demonstrated to primary well market dynamic than initiatives our slightly occurring the lies will this last the our for of are what uncertainty the a the as brand HOKA lapping was to brand year for great business performance and just to macroeconomic environment. quarter, nimble revenue global the during the primarily key responsible prior But UGG build year earlier this continues approach shared our leadership. that under category is continuing outlined we first during while results disciplined we managing positioned environment, Anne’s as strong we’re and react and remain to our

us historically well, strong to we to And years. headwinds, to ability our us last model upon believe resonate serve We X the correct that continued course well has we’ll the to to have strategies our immune built necessary. macroeconomic remain portfolio though operating over and committed that signals to have when long-term Deckers build continue with an will demand the demonstrated consumers. lead brands Our not

the fiscal our results. into details get let’s first of year Now, quarter XXXX

fiscal nearly quarter’s year quarter of up growth global year. exceptional for revenue points, this prior revenue of to million, last HOKA XXXX and the availability. all increased demand was revenue across brands First versus versus access the ecosystem $XXX inventory experienced XX% accounting improved XX% due

direction delivered higher time foreign the ever, brand the our XX%, exchange HOKA unfavorable months from represented from XX, is billion over which XX% points of basis first margin This the total revenue, from ended than Gross $X For that the and aligned headwinds for air of costs last has that was we XX the June more year’s quarter quarterly as revenue. of currency half portfolio as and from pressure XXX down year. XX.X%. well impacts this anticipate anticipated last first for with rates margins ocean will freight remainder over

quarter increased headwinds our impacted from XX% more that These from pre-pandemic in mix SG&A dollar up partially million. discounted last activity line sandals distributor in offset first is and the gross styles HOKA mix the year’s spend benefits and margin first highest particular, by select past. $XXX sold brand as brand increases. of margin Additionally, portfolio with towards years $XXX the in international were price than activity quarter segment, normalized was product distributor commanded which earlier mix UGG QX and in wholesale HOKA during channel promotional benefits gross is was the and for and shipped revenue from product the shifting million, in the from business

FX margin. gross freight of XX of leverage we and offset points to percentage impact help delivered revenue, a to basis As

year. results Our share earnings quarter, diluted These tax was per year’s which XX.X% the drove $X.XX share. XX.X%, was of last $X.XX rate per for in the prior $X.XX which to below compares

we last and of and ended Inventory of $XXX to during the inventory year’s versus that same June last XX% Turning to chain below And year. cash supply operating in XX, borrowings. outstanding June XXXX, point sheet. important time as our result up we levels period was At million the note equivalents. were a $XXX levels normal no million, with balance had disruption

average quarter, During price first approximately an million of shares worth share of $XXX repurchased $XXX.XX. we the at

$X.X company Subsequent now share on of billion confidence authorization. approved stock increase board’s XX the in top repurchase the of June authorization, more repurchase long-term of XX% approximately quarter our strategic total under than remaining had capitalization, XXXX, market an the in plan. end, $XXX which of existing As of Board our company’s to million highlighting its represents Directors the

supply Now chain for update.

chain logistics Over as the network and macro disruption. update quarters, shared an of last our efforts on status our the several we mitigation continued we’ve navigate supply

experiencing times area pleased this to timing the nearly are been We have before have prioritize year, in thus QX, continuing on last relative latency share holding I visibility country and fiscal transit, with brief in that but are some thoughts in I the to but our are XX% XXXX inventory year improvement relative will into there Transit touch of and improved lower inventory we of sale. in outlook. still

the result, earlier For shipped we arrived quarter inventory out. product example, a more anticipated, during first generally than as

visibility arrive, meet However, into to demand marketplace will higher holding enable certain of comfortable with significant levels the inventory to shipments are when our seeing. we low brands are we

to inventory difficult expect continue the of when fiscal heightened predict land, inventory that this we So levels throughout will timing year. will

the cost price brands will help confident guidance. that front, UGG margins headwinds are deliver our the we increases to second and freight fiscal bolster offset in XXXX year the full half HOKA and implemented On

of anticipated HOKA Given inventory, now freight to air than expect originally brand. for use we arrival the the less earlier

strengthen, are help offset and we reduction this these in the headwinds, as to continued currency dollar greater currency anticipating airfreight has should pressures. However, planned

in share the of to expected $XX.XX, And revenue XX% dynamics than last XXXX earnings in to a fiscal SG&A versus anticipating our diluted $XX.XX range with first increase. reminder the be XX and our turning XX% as gross executed to basis XX% of mind, to now completed, last in of year points to XX.X%. margin of reflecting quarter we growth guidance, XX%; XX%; are range XX% the revenue approximately guidance. higher of these which at just full and per includes margin year, $X.XX the reaffirming share Now, XX.X% to range tax the repurchase will approximately during rate a year operating with in be a

anticipated, originally few which reaffirmation contemplated While to the like within growth from wholesale UGG growth foreign our greater may our stronger affecting items HOKA I’d business repurchases. concentration guidance, revenue onetime and less be availability, air in aligns versus increase now to upside the a to year, reflecting inventory maintained include guidance, to which range last of have XX% using expectation highlight expected freight we additional from overall and additional the international nature, growth guidance the headwinds, from and primarily than This excludes of any not brands impact regions. planned charges incremental due model contemplate does currency in of that any share considered

Additionally, risks no COVID-XX on of shortages, are meaningful our further inflationary recessionary which and tensions. further the strengthening U.S. disruptions, constraints include in consumer and to assumes confidence the guidance pressures, of of deterioration limited conditions, pressures, supply dollar current not our and economic related but and pandemic geopolitical expenses, and uncertainties, labor changes impacts including ongoing chain operations

nimble While a to uncertainty as to ability persists, remaining demand. deliver evolve, remarks. revenue our are the consumer and power of marketplace has see operating displaying we in now I’ll brands top for of the macroeconomic dynamics to react believe growth history Thanks, his unique the positioned to back and call signs and everyone. of compelling Deckers margins. final hand continue positive we Dave well tier

Dave Powers

Steve. Thanks,

pleased quite year to are fiscal with We start the XXXX.

experienced you are and all and and excited leaders staying our HOKA shared With of and huge second the and against individuals Deckers but that repurchase Deckers service represents This initiatives. on current Board brand our in authorization, to our as XX% focused Deckers their continued people our closely make transition. also managing is entire the we more ahead for beginning culture, for on journey support of Supply to approved to increased against now to growth further opportunities fly reaching more the brand revenue the of also the call our I’ll think part brands, of leadership sure our for we awareness rhis executive our focused reach of contributions much with and for drove I’d aperture to as the for that dollar to a look confidence to Angela company forward drive to be working a promotion total our dedicated HOKA like as these of billion portfolio that team has believe strategic HOKA. ahead and significant expansion excited operator workplace Chief to have thank scale. the our and human talent feat our which success fly above with initiatives. and progress the enhance future to that, thank both Anne strategic of of plan long-term as company, I’ve an I for capitalization our through remaining broaden turn share portfolio I the impressive laser our Spangenberg management market ever team fortunate employees continued have Lifestyle. congratulate while The portfolio the Q&A. this business, brands, in point of the the goals, flexible plan. And consumer is Operator? stakeholders a stays exciting don’t want to of XX% view to the revenue first campaign the milestone. of on just employees The to recent brand of your for our our From this strategic growth build strong for to bolstered whole the President Ogbechie organization As big leadership the HOKA in organization. Chain is With discipline a all of hiring in and Officer, of perspective, recently for brand’s Fashion are of team key support. I all quarter, for over our A strategic executive Deckers. I’m Directors vote than been

Operator

Thank you.

from Komp begin go Please comes now [Operator the Jonathan with will session. question The We Robert Baird. W. ahead. first question-and-answer Instructions]

Jonathan Komp

in Thank levels you. UGG to brand. first the you UGG just the of you marketplace, wholesale brand health fare I your may how in on But maybe just get Good thoughts this environment? just of just ask UGG orders overall inventory want a afternoon. on comfort is the the with partners overall have the on to of to and that expect more thoughts maybe Curious your question. domestic with current

Dave Powers

Yeah. can that. This the is Dave. I of beginning answer

last for We’re down quarter little us expected. performing. the that’s a business Yeah is to year. largely pleased Fluff trying lap UGG And due how as with to from bit the It’s

So some of And are Sport franchise. lower I at and decline should the is Yeah, up But Fluff other point. price doing which Sport versus attribute we’ve ground classic can the slippers Yeah the all some last to miss pretty a made you with much say, well. on or year, the the that

as website units UGG were example, down our for sales an were in the up. So, but on U.S., e-commerce brand,

through So But we’re business. the quarterly the core still globe end of it’s healthy. the their dynamic, across fluff business tail strong is and a working

Our the It’s it and strong a have inventory order that can And, more Steve our accounts we book here good that. rest get here. our the inventory inventory. the But we’re have of bit is able to news the talk about earlier, to chances little good certainly is to place in year earlier. and the healthy. are feel we and we in do

seeing here, is the year the as the the be lot very after. cautious a year still perspective, a the But And concerns we’re business and consumer. globally, still signs, being bit there’s So about the are half positive brand should inventory back healthy. the setup still channel a good. still have into we in of it’s little order there health from goes going the be we’re But in looking and looking as far brand of books to inventory because early over

Steven Fasching

up to books Yeah, strong the that. so that, brand as to good I we add seeing feel order said, about we’re demand holding for Jon, Dave think, on just

were in As operating so message to going we which inventory, on levels, were in we this is at remind to an kind delivering low increase our said That level. on last year, inventory again, and normal that. levels unusually everybody contributing year’s inventory bring of just earlier on we’re below

to see And consumer that have. we’re with it positioned but to build, that okay the continuing will from feel we to that stands, So inventory, response standpoint fulfill it. where continue well orders to the we’re

we’re then So outlook. said performing still on was as well and the inventory positive last growth. very too replenishing of depleted years year, the strong And to documented levels UGG of just everybody, in through off And we UGG how coming it channel. remind is

as strong feel that. replenishing comping inventory as growth about we’re comfortable and well So

Jonathan Komp

great. wanted then HOKA then views you to one just And Dave, your maybe maybe and initiatives, see any broadening of both that specific and HOKA. brand, question mentioned for just you I that on separate Yeah, the aperture I today? the opportunity and your thoughts, comment, longer-term? and of get near-term think the What follow-up

Dave Powers

have always of And will space. But that reach the Hence, go at really obviously and states we we opportunity see it’s championships the and hike, China. product walking UTMB, things. is core, expanding be. just important brand, then of running in consumers, is and in the two reach this internationally, in and then to our that in new Western the and One is the this the and also Yeah, are we’ll brand, brand maintain expanded and lifestyle. particularly incredible forward. reach related core trail authenticity, a we that expanding also But and to Ironman and its authenticity very as

the fact groups well purchasing and HOKA are of there’s of base brand aware use. across we consumers broad a are that the demographics that age So, end

that the new ultra or a overall broader I our the or reestablishing brand launched, is Fly campaign Human comfort. with sports in perspective, to And that the consumer with just time walking we authenticity for Fly same that mentioned. And events the lifestyle speaking perspective, into base so a at

So engagement establish communication we’re and product consumers. on ways consumers, consider and with more those on a their the opening while authenticity working not athletes, to that’s to up staying after new footwear, all them we’re to brand. welcome those we necessarily day, on performance those And all folks, they standpoint, they’re distribution and feet go more true need the we of

is our increasingly HOKA to the really brand. brand. XX starting base lower age with particularly pleased in than stores, year opening less and XX% of We’re into consumers websites but more spectrum in are on of incredibly a and seeing purchasing our coming on go stores But we’re the exciting footlocker also olds XX the business where into broad the we’re China, just globally, index, to loving what’s stores their

that’s white for lot – with We’re comments HOKAs, into And Nikes, all too. so do account account trading optimism younger to hear well. all white starting the a about going knew encouraging there to consumer can their as people very for we Locker the us are Foot of of what see we

Jonathan Komp

That’s Thanks great color. again.

Dave Powers

Jon. Thanks,

Steven Fasching

Thank you.

Operator

Poser Sam Trading. Williams ahead. from comes Please with question go next The

Sam Poser

it by earlier, questions. just my afternoon. give wholesale you question. give sort Well, I’m or a to of my for that Thanks do can little revenue us going Can please? about bit taking on brand, Good but us talked you normal category you

Erinn Kohler

Hi, Sam, Erinn. sure. is This

give I’ll net component by So brand. just wholesale that distributor you sales,

million, $XXX So $XXX includes Teva million, for $XX which million, HOKA and million. Sanuk all other $XX $X then that was UGG, Koolaburra million,

So of you $XXX that gets total to million. wholesale distributor your

Sam Poser

a Thank Then – two you very of much. more. couple

the is get some a of about, get normal? $XXX any last inventory to now XX% are above sales flow had. this in you’re you’ve quarter you of you’re that because a XX%? the well we HOKA in $XXX us your ever you idea bunch can that a quarter evenly the that give lost of third flowing UGG, how How new about quarter thinking good revenue cadence year. with doing is quarter of And year to Or increase million You of then think million, should better? third the the there to the And to seeing

Dave Powers

the question. And UGG. Yeah, with so Steve HOKA I’ll then, let I’ll start tackle

the UGG and good in inventory inventory some we potentially And last the we’re missed about late we channel optimistic were queue last in sales have We So news year. in coming. year. earlier, on more have you the we inventory, is as that obviously, QX, said,

think very there So good from of questions the in level QX. lot on going a we’re standpoint, et out still inventory be cetera. promotions, to consumer an I shape There’s just for of

as we’ve see or in promotions, because expecting We’re very years top-line, point. promotional not on inventory. we tight clean, of make the we’re can lot a on think exciting holiday minimal we’re to in in up not setup far brand, brand the of working last need but couple modeling have normalize the new inventory we are well. campaign We health a on think return UGG of revenue to, resonate to with right we we very, in been new not at very now. going as we position, the for QX, And we’ve have campaign, protect UGG we if We and looks, to HOKA. activity the product season, how But – that this chase a want a heavy the little we’re year launches in of bit

the in So far as shape. we’re opportunity, good tackling as

wholesale question brand, their their not the and to is that’s globally, general. think environment inventory to going the well inventory on who as necessarily on tight are what I but do in just macroeconomic or partners, heavy

Steven Fasching

on Sam we HOKA said one by increased what and ship was largely that of kind performance, where of HOKA. and then June, Yeah, the quarter product driven was question, in a inventory indicated strong more we availability in

you’re HOKA what anticipated we giving to what And, of always watch sell And more that quarter which this our to to them going bit And of quarterly product inventory, in expected, the some ship we so us a seeing the little an timing of why through. product what’s could right? back with was we’re into and than that’s closely sooner again, think the driving opportunity is driven, what is not get I largely than so, But will availability market ability guidance. kind that encouraging issue. gave that happen

seeing timing, just between shifting quarters. We’re

very out we’re than have of earlier what to so of bit what And take when with little advantage you’ve an to kind opportunity But show HOKA move quarter. with to what it. with we’re And really it’s this going when seen in precisely difficult things going anticipated, that’s full go. we are dealing to a product we

Sam Poser

thing, of expect to the the at shipments? year given sort the of last Yeah. business you do One outgrow maneuvers this of the DTC some wholesale wholesale in year, last the end

Steven Fasching

right equivalent those looking kind of now, Yeah, I think at channels. we’re between the things way is

is we’ll So, but and still way right now, of early looking we’re equivalent. kind at the see,

Sam Poser

for continued you Thank success.

Dave Powers

Yeah. Thanks, Sam.

Operator

comes question Laurent next BNP with go from ahead. Exane The Paribas. Vasilescu Please

Laurent Vasilescu

marketing of question. on I X% there for much taking very from us us, XX-K my HOKA year to see. in you any can between the about you you talk remind a Thank you got wanted sales year? marketing do XXXX think differed nuances, percentage of share and follow-up that I campaign. And few maybe over to key fiscal the this up the two where bit you a marketing the from for spend, goes Dave, And Steve, like meaningfully campaign? afternoon. fiscal years is think about big ago great X%, with were could spread brands? little in can global as sales a the which terms Good marketing for maybe learnings was of

Dave Powers

little bit Yeah, I’ll is global the campaign first done. that HOKA. ever a has talk about This brand the

globally. types the all athletes the get And, So all And, we’ve of our be the active be can to for messaging as evolved felt brand. around we’ve been for obviously refresh inspiring important to there world to a thinking the them. it’s folks brand this of and communication we track what that from on and

is it’s this globe. different or consistent global whether Speedgoat, the so campaign and Bondi, consistent a product we more a have launches to and a go the that look around way Clifton, all in bring or the to have tone with to consistency bit little through, more the of a And for consumers feel to us be of voice

we’re with it’s been how So received. very pleased

getting very We’re wholesale from feedback positive our partners.

real And direction. think can a story the are heading for as you very aspirational figures continue of retention to amount We’re and in the build tremendously acquisition power, for KPIs that was a our and an foundation the we and head website. right quarter on and healthy this brand. toe some build very up getting the us, visitors we positive is to and on all see in for The positioning of new

far, So good. so

into think a Western the in need more the to and platform is are add is the we if in and pull page, great and performances feel spend very The the little in rates in redesign conversion to of right. right far, the campaign. be our proven little that’s and and But more landing athletes time I the so off we grittiness, leverage those some UTMB of and states Ironman bit campaign word up. dwell bit time influencers successful a website the

And and seeing far, it’s but And wholesale from and so a with this we’re reaction adoption pleased. But long globally, so consumers we’re very positive great beginning the campaign. of accounts. journey

Steven Fasching

Yeah. Hi, Steve. Laurent, this is

marketing spend. on few Just the – been have the marketing years, over past We increasing spend. we

other percentage we brands, more our Dave driving contributing basis articulated a do HOKA part we as we to low relates talked our great is to market What as HOKA we’re brands. and and of marketing awareness, on bit, on it relatively increase. about and with revenue in to marketing spend. increase of to what’s As building brand overall is sales And brands, in what’s spend proportional as awareness a other marketing seeing, comparison productivity just is still brand quite that

awareness. brand how the brand And driving launching, and of so, spend, that’s consumer with that campaigns the and seeing we’re marketing the with productivity great we’re building awareness

we’ll using continue do the to and and that Dave to as campaign, So campaigns. with continue it’s awareness and you’ve global a that. seen will build those lever refine very and efficiently we’re continue to as through And productively said,

Laurent Vasilescu

Thank little you as up in mentioned Is us significant more year what HOKA. maybe any multibillion Steve, you’re focus a That’s the need color just signed a by another there. It’s very be you you that What’s effort there? I for that? dollar on target helpful. I great. for your frame to there last wholesale think And the then kind XX-K, you the be your distribution two DTC Is a on and hear. Indiana that running Foot over followed Can is for follow-up type think, channel really in that in Distribution the should Center the to you consumer question, year. seeing That of maybe remarks, center. then, would give Dave, And up on response? pretty Great Locker, or granularity on lease a can of next

Dave Powers

first. Foot Locker I’ll tackle Sure.

for the just the in stores then that handful put we’re but consumer the Foot younger, of brand product think online Locker with are and right going is styles in that the we So It’s more in stores it’s feel represent minded, positively, a well. minded Locker. early as consumer group fashion days, position some can athletic Foot we we still after, which

to share that, results, say has will pleased footlocker. pleased feedback any but early we’re too it’s we’re with how I launch with the we’re gone, the So from getting

more brand. As I increasingly younger seeing consumers, we’re adopt mentioned, the

So good it about long-term. we feel

both see want how to shop they’re But doing the door have launch, continue with far, way, expanding maintain with plans going of our in to where things consumers those positive always the brand environments discipline that So are strategic a so to can count. monitor in Dick’s. and we’ve good at And reaching take to both and and drastically that. the showcase increase they to much time we’re that going major But we’re there’s go. we distribution, done like no

than our Dick these channels, healthy very can stores. XX% results now. continue own less out distribution. and so through right the in to still trickle monitor And we’ll getting And DTC we’re We’re of you see

Steven Fasching

levers growth expanding we you are, HOKA of specifically centers, is business available with Yeah. the And do we just on help and well. presence that the handle growth have that in distribution handle We as to part as the business. kind space Laurent, and anticipate the mentioned, additional in our the

main But we patterns. there So that – XPLs distribution Valley. can Moreno arrangements in we in we facility have our other change have

the mentioned, some on also we We’re that we in Coast as can also you through increasing distribution XPLs have East look the space Midwest, at.

things take is, more I we’re us What also time. say plan the introducing We for these automation. would know helping it’s So future.

we’re part being get to up And the an of in so as increased we Midwest is big efficiently. able be automated efficient center, developing running a those and so what fulfillment

at So looking more that’s to how that, we’re on come but that.

Laurent Vasilescu

you very Thank That’s much just questions. great to my hear. taking for

Steven Fasching

Right.

Dave Powers

you. Thank

Operator

from The comes ahead. question Duffy next with Stifel. Jim go Please

Jim Duffy

gainer. And has guys. running in of HOKA clearly category nice, to Really the a wholesale wanted this of specialty has moderating catching of very in afternoon. Do other that’s I’m Good up on caught on you ask category has about seeing in HOKA footed channel you’re some you. the strong. been inventory? indications wrong been curious feel share But the having inventories that any now? channel inventory in channel, the I that state if Thank equilibrium then, brands growth

Steven Fasching

is Yeah, question. Steve. Jim, Good this

growing carefully. mentioned, that are And some has levels, watching inventory our at We’re than but we our of others, presence other you some not and brands. we much increased, productivity are higher inventory is as the of

our brand significant I most turnover so outlets, productive think, we’re in ability highly So that leading of to of run the many it. that’s inventory, fulfill to specialty productive, is those probably

increases, teams channel, more think, inventory So, more going I opportunity, to think, we’re as feed as that available, I again, that well. continue and we to have there’s as inventory believe our

better going positioned And now to we’re that of to to that. to advantage better continue continue go a with business. take inventory So after position, we’re especially

Dave Powers

And we’re specialty their inventory, HOKA little but hearing that full, are run bit inventory. also, I some the accounts a in think general of all not just with

as additional full high So there’s the margin said, others price a versus sales. Steve of limited capacity to be to able HOKA bring exceptional, retail, in productivity inventory. is But high

last the We to in we manage better the to but So really we have the than have able in chase now mode. inventory that way channel years. two were be much and on

Jim Duffy

styles The the brand really top five that’s XX encouraging of indicators super impressive.

Dave Powers

launches. Yeah. more that a Yeah. the we are other working thing And innovative on is on in

along do channel out some to the way innovation and a and we’re tests and ideas use of to faster, learn year the beginning the DTC going we’re as XXXX. to channel faster, utilizing to innovative So bring specialty market utilize new some calendar products at new run and that lot and going get well

Jim Duffy

addition also skill what’s lead the particular you an have I to Dave, the her ask to most want are her that And well fashion opportunities brings suited areas impact? Spangenberg, you’re the Anne Anne excited to of And about what to division. Great. the makes that lifestyle about set

Dave Powers

for the as say excited she she’s almost ELT. to is as She the weeks, She’s She’s has for in merchandising, organization Yeah, leader. we been Nike. has experience business fantastic and as oversaw over ground redeveloping an repositioning hit foremost, within are a years all to and collectively, just the market, that in an massive and China, got the join X leader She and inspirational have running. ELT Nike, an three of her kind on ground and She’s and empathetic a right company. been first brand would board I now very Deckers. incredible She storytelling, here building. addition the a leader. spent years

have same people get really the what learned looking space. people of a a experts inspirational storytelling, team. are the is of our team full is lot for years. can And from that out we’re best leader and over really at that understands here And an that core And time, products, amplifying compelling who She foremost, something the is editing in who merchant, to and knows And first footwear of she’s bring Nike we she space. appreciates talent exceptional from understands and the apparel. an about she But know, product how in we love head way market and so, Anne, fashion the toe you to she to not with storytelling. a which

brand So that we this us at the think that just $X true the merchandising for going unlock she leadership potential and now. her at experience, overseeing combination this global execution and of leadership was it’s of gives billion can Nike the the beyond great brand

Jim Duffy

good. Thank Very you, guys.

Dave Powers

Thank you.

Operator

Kernan comes question with Please next John go The from Cowen. ahead.

John Kernan

taking Excellent. great on quarter. Congrats Thanks my another for question.

Dave Powers

you. Thank

John Kernan

the you’re increases Could the the impact you as year you’re talk half of back in realized to for what to gross Thank and margin you. you QX planning price and planning?

Steven Fasching

is Yeah, Steve. John, this

we’ve previously. said from changed what anything haven’t We

the haven’t mitigate HOKA, been gross next pressures. of improvement. of So, related part year that also changed this higher kick into that margin continue to being product to with price on we we’ve beginning stance price we’re at drive our the quarter. of in freight. that guidance. the face the has that’s is Clearly, what on introduced calendar offset have said seeing And increases that’ll related increases was indicated on our some really What helping we’ll select some Again, we It’s the initial of and our relate QX. and UGG, for

anything there. changed haven’t So we

to So a opportunity, thinking set increases, how seasons, that. change of and prices our expect future well we’re are we’re about not year. pretty going would But to in continue be terms anything the for this monitor in would more we price no

Dave Powers

I Yeah, XX% for specifically, and on the for prices about we UGG, QX. line think raised

partners our that So, but it, get we that as get where well. think and places from can we’ve wholesale in we Yeah. can we heard that

John Kernan

one Got quick it. just follow-up. Maybe

side both little can HOKA. you any You it the bit HOKA. the mentioned specialty for UGG a detail to being full running on wholesale relates for channel as Anything else wholesale other of things give and

there’s of have We peers your like updates in And channel. does sector. some some building wholesale some the heard in it that caution sound from

Dave Powers

Yeah, I inventory. And over on what their Space from say I’m it’s I for the been a up They’ve challenge mean, hearing,, challenge. up. think key But wholesalers. and becoming And logistics is are necessarily is many for wouldn’t wholesalers caution. filling brands a I filling years. last still of of they’re couple brands light,

we marketplace, able in And early out so there we is the that that were in little a into to channel inventory about got we’re get which to good it’s hearing and we bit capture the think that space. why inventory

to they is right and the it’s in year dynamic into be tried fill year. the heading as of think inventories up that work wholesale I to their a So this to through back rest going going to position the have get

it So so business is we don’t is yet. still strong, affecting see health strong. brand our Demand really

pretty cancellations anything. know, about or We’re you It’s crazy not hearing normalized.

our we So chances. about a that about. is that hearing feel dynamic But good still we’re

John Kernan

you. Understood. Thank

Dave Powers

Thanks, right. John. All

Steven Fasching

Thanks, John.

Operator

Lejuez comes The Paul ahead. Research. next go Citi Please from with question

Paul Lejuez

a of brands steady the guys. maybe versus was, versus year little as inventory deterioration saw the just the side goods you again, if I’m quarter in transit, the mentioned of the side, both the ago could progressed just of more, the for a kind DTC if ups thanks, curious Hey, downs you hand like about trends what you HOKA. percentage units a high had you of looks what kind throughout on talk And you that moved I throughout, of bit Thanks. on have last if business for year? in talk sort bit your of business or DTC a is about terms of a the you things held curious and and UGG comparison saw issue maybe you more in and inventory each could think on curious along little – the

Dave Powers

e-commerce Yeah, talk I’ll about a bit. so little

UGG, very the with launch, when HOKA the from saw kicked you see quarter in. healthy results, As for campaign a we that did new the and lift

created half awareness, the more in little XX% little the first so excitement, back time a quarter, of visitors helped a And that was the the more in range.

healthy to those as KPIs, very has the to continues I landing so, conversion on And repeat consumers, coming pages. new site, consumers better the business pages be younger and on purchasers, mentioned,

by where pandemic. challenge was DTC, as still mentioned Fluff it of within from And, for UGG, So across a that’s I the level the year it’s just it’s categories brand seeing it’s the interest aided is category. really real the amongst not down in good. And is whole combination all group. of ago, is slipper a that the business really broad slowing a adoption. the dramatically base, It’s Within standout

it’s but lower down slowed the Sport with point. a that’s ground So we’ve some up made But price Yeah. at

I but in revenue e-commerce down were or up. UGG, was as units mentioned, So for was DTC down

So as at I the still still feel strong. I strong, in that dynamic in heritage I this time little the and core think, has related. strong, men was businesses kids, said, also point politely so know but A think core softness slippers business, still

and brand business. behind the be the needed I as more that on into dynamics expectation us, to. said, and So the in still categories from QX be get a And normalized is we Fluff that, as we will QX, it’ll aside performing

Steven Fasching

little have transit. a percentage still inventory, amounts a the we were in dollar in better, of on on a amounts, so in just Paul, then, And dollar bit higher the wise little transit higher terms bit but

that’s think important this in year. And inventory that freight, $XX embedded more versus last throughout rates then as of to increased million is I additional note. year year about last

related with we’re the with that’s a higher the average well. then we’re amount other So ramping HOKA the remind inventory inventory greater And a business the increase everyone, percentage price is values more those contributing significant that support And just as to average. embedded of to to in in balance. than inventory to HOKA growth on large HOKA the dealing is the freight, higher

as lift that’s to contributing So well. a

Paul Lejuez

you say, Did inventory? did HOKA of UGG you give a versus breakdown

Steven Fasching

No. We don’t.

Paul Lejuez

Good luck. guys. Thanks, Okay.

Steven Fasching

All right.

Dave Powers

Thank you.

Operator

question. Jay and this ahead. The from will He’s Please be Sole, go with next the question comes last UBS.

Jay Sole

Great. Thank you for taking my question.

of much bunch then starting gave it’s it And of us kind much margin say how key as around supply getting give little the of possible how the maybe of the effective, supply in gross a chain we detail more you’re gross quarter. a into the You a the to fiscal the to factors and basis bit through that improvement. margin sense easier give chain, Is and challenges, cost you on you points improved and impacted some mentioned, year? the you have see those what trajectory go us visibility the

Steven Fasching

Yeah. Jay. Sure,

So this is Steve.

of is the increased So XXX basis roughly last versus freight. quarter, of point the year it XXX in decline

in So to we QX, freight some year and didn’t using air which ago, the air start last until did in that’s we year. later air, use because year both a related ocean

air when you be freight, latter there’s roughly the stated. remind of that’ll related year And of we’re freight basis ocean. where year, the on talked again, first all part get to were part just half some XX And Yeah. about points is everything other headwinds of going was? so have So the about into to we as we the else and then second then versus that and FX of you, the the of XXX tailwinds in things question to the kind inclusive your

Jay Sole

you – Just from it some on like here? do the think supply trends yeah, how you chain, said, improvements,

Steven Fasching

is what quarter. and contributed this to strong what’s so seeing the Yeah, first we’re

the as we improvement, have mentioned, We remarks. in an prepared seen

a in bit what is product flowing So than we sooner little anticipated.

is prepared So as the still I limited, we’re in seeing things flow. visibility The mentioned remarks, too.

news to seen the again a better on that’s trying haven’t arrival eye Good ongoing, still that. on to that. port, close on But negotiations, we’re labor we So so inventory. we’ll still get so of gauges Coast disruption keep related is, still ongoing, West

HOKA come move ability in June good, ago we some an a the order and kind be to inventory to than out ability we seen better, meet a of which and better So year us demonstrated quarter the in like and again, in position of with with is gives demand. in it were

how see we’ll things So go.

but continuing that further on work seen, look improve, encouraged look continuing to ways the improvement. that by improvements have of some for to to continuing we at but to We’re

Jay Sole

it. Got

Okay. so Thank you much.

Operator

has presentation. Thank for attending conference now concluded. The you today’s

disconnect. You may now

Deckers Outdoor (DECK) 29 Jul 222023 Q1 Earnings call transcript