Earnings call transcript Q4 2023

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Operator

Good afternoon and thank you for standing by. Welcome to the Deckers Brands Fourth Quarter Fiscal 2023 Earnings Conference Call. [Operator Instructions] I’d like to remind everyone that the conference call is being recorded. And at this time, I’d like to turn the floor over to Erinn Kohler, VP, Investor Relations and Corporate Planning.

Erinn Kohler

Hello and thank you everyone for joining us today.

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

and Before we that begin, within and forward-looking and which for disruptions of long-term demand behavior, on the are fact, historical are I call the would like to current in Safe of this our federal strength statements policy. our to meaning Harbor and products, operations of subject of Please securities forward-looking brand our note are objectives, certain the of consumer made company’s strategies, statements statements changes fluctuations the remind laws, statements everyone Reform All plans performance, to include and uncertainties. by and to product brands, mix, regarding made our performance, Safe distribution the promotional levels for liability our our strategic call chain considerable impact than These marketing in inventory currency established strategies, logistics, intended rates. revenues, on today, XXXX. risks statements product Harbor Private the and Act and on this environment anticipated Litigation Securities expenses, qualify margins, statements exchange forward-looking activity, statements of foreign from other including are the macroeconomic supply

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

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

constant measures financial in that accepted to in with refer generally principles may management call, accounting accordance including prepared were this On currency. States, not United the

the basis core for operations The direct-to-consumer not measures reporting company items on results. that may and performance In throughout because a of prior its reports operating sales of operating periods. important its addition, are that comparable financial unrelated non-GAAP indicators that these open current the company to they be were constant are exclude indicative believes currency and

will over Dave. I that, now With turn it to

Dave Powers

joining record Deckers, here and discuss Erinn. to Thanks, afternoon, strategic progress you results us our delivered everyone long-term and delighted to Good as continued for initiatives. as both I we today the on and against for to year exceptional be am line thank top always today. another bottom

and year For growth the XX% of margin in range and versus years billion is XX% XX%, representing of which our year. share $X.X XXXX, X fiscal top in a billion, tier per increase line $X earnings last industry the high-end with our more at year than than of a $X.X achieved which basis increase our on in versus is more revenue a to above Operating ago. prior revenue XX% brands reported guidance

portfolio mix driving growth constant in Specifically, $XXX our at holding our year with growing last million revenue increasing than from eclipse includes global brand of progress nearly versus and the the fluctuations, basis, which markets currency rate a for business; to adding XXXX twice the on increased an of international wholesale; when versus XX% DTC approximate in $X.XX revenue currency. headwind steady more accounting XX% billion of constant incremental currency revenue, billion. in and HOKA increasing year fiscal prior UGG reported both $X.X year global its direct-to-consumer international XX% of

to resilient ahead support far brand believe have management few have truly past years, how improve proud that outstanding we tremendous of on fiscal Steve to growth, our organization much hard inventories of had and levels. execution. and have particularly provide growth. enabled the XX% for our contributed achieving our for our sustainable goals I XXXX long-term driving leaders and fiscal speed collaboration including operations, teams our Decker’s still to am incredible we will I given remarkable, We year is year the the capable consumer more this results significant with their further work have employees foundation an operating omnichannel the climate thank infrastructure that We which our growth, come. and while on margin for appropriate across Reflecting to more details performance to XXXX. have company’s what’s the work ahead set the and to top organization line we and want but upon and build reducing strength forth, of maintaining build to

increased will about Starting fiscal But HOKA billion. XX% to $X.X prior performance. the channel brand and the consecutive has growth with global first, fourth XXXX brand XX%. This I delivered XXXX above year revenue for share more versus is our highlights, HOKA year year the revenue

by complemented XX% growth acceleration fall additional chain For was increase points improved partners, DTC, inventory grew which prior product adoption; of the global year; strategic growth increased wholesale market with brand which supply than of points an and with share year, existing driven a of by XXXX; versus XX% broader was availability more in an access in category environment. HOKA the awareness and distribution; our

build TV to campaign. HOKA HUMAN campaign a that its combined the elevate channels with audience product creative key globally team In out-of-home broader in of The in integrated reach XXXX, minds and FLY the brand FLY, emotionally launched HOKA activations consumers June connected designed brand messaging. and The first-ever HOKA to was of awareness and targeted and utilized connected storytelling marketing through rich and digital global cities.

HOKA as more and compared of than of spectrum such the U.S., of increased result this markets, to three investments those fall countries awareness increasing a As Germany, France, a awareness UK, XX% across the campaign, key behind the broad China with XXXX.

opportunity continue significant each our we a brand over in of Given has for long success the markets the growth term. the to see experienced,

iteration The are a developing roots of Stay inclusive more build more for Fly, next when to campaign we initial and the performance from Human working global the next focus regions the team insights awareness the the tuned everybody. will on on that job international evolve through to campaign gap of the Fly done and month. brand. HOKA fantastic for brand’s emphasizes Specifically, has storytelling the it to marketing a launches which joy close between movement details U.S.

to brand’s prior year. increase XX% as to direct-to-consumer HOKA in the point exceptional On growth DTC business, of XX% mix the drive in up brand X revenue compared percentage the a helped total

retention compared consumers continues existing also to increase HOKA in year. new the an while increase into as XX% by bring Importantly, a brand, XX% and retaining to consumers, in last evidenced acquisition

consumers XX aged with of Momentum years the old. U.S. XX younger HOKA than helped these drive purchasers increases in to as the number doubled more

expand, we encouraged continues broader product to running adoption the HOKA beyond As are the from consumers heritage by styles. brand’s

seen trend continue this shelf consumers category We gain DTC wholesalers. space and to with among have

share and and Transport benefiting the recovery gains market and sandal fitness as by DTC U.S. than channels, and over the purchasers XX% the HOKA recovery the introduction Speedgoat EMEA, year, of greater products products Styles. Anacapa and from Solimar aided with Across on in and revenue last Among and more XXX% trail updates adoption hike well respectively. multi-category Challenger doubled increased versus Kaha and all as and franchises purchases both

recently opportunity use with first HOKA brand’s innovative across younger athletes launched DTC athletes are offer to and ever wholesale HOKA collection further success, as selection channel to view kids avenue an the select with popular over long-term. brand to expose parents we of the of We through products, very a the very generation With experiencing now the to the our partners. and with most is variety next items a excited our of the

with In wholesale a for relationships brand’s existing of by specialty the for with brand terms distribution, that market the year, and XXXX, an continues dollar performance the the consumer. with accounted exceptional access XX% which specialty beyond broaden share fiscal approximately year growth, points expanding addressable with X/X while revenue global partners. awareness market pinnacle of prior products strategic driven prioritize HOKA delivering strategic points HOKA of through increased additional run experience outdoor versus partners, traditional to gains

is HOKA available the respective align the to partners HOKA authenticity maintain and distribution target is brand with high-performance specialty offering and consumer. at doors. to the and segmentation marketing emphasis leveraging select distribution, by product are credibility greater expanded With only exclusive on channel that run specialty placing and outdoor products DTC

wholesale of brand focus is At the price dynamic Marketplace HOKA plans to distribution, driving building management of to model. $X.X growth billion, light positioning a year share XXXX. market channel, scale in premium brand’s north pull full existing our DTC protect the for top enters a as the priority be consumer HOKA fiscal in with points maintain the and continues sell-through and especially environment. of a high emphasize HOKA to current

upcoming This focus promotion in the team in and on specifics levels will year prioritize our brand’s on beyond. for special success well HOKA be but expects to in HOKA low year. will outlook of the into particularly year to delivering the our continued and EMEA coming later call, the the in get like region would management I another look congratulate more to as forward marketplace evident Steve HOKA

in up year UGG. basis, slightly was the versus on overseas. constant inventories for down $X.X refilling last rate DTC UGG as as pressures comparisons domestic Global brand XXXX performed to year on revenue the growth currency related which through tough from line with prior reported expectations is year billion, and international fiscal as well to Moving X% currency. in but facing while driving focused markets, exchange a wholesale

dynamics, the global XX% as of retention, demand, unique by increased strength last brand UGG respectively. year, maintained and which these and XX% and DTC levels of Despite versus acquisition heat high evidenced

we XX% is this even international the by our figure terms retention in year. prior the in consumers, where worldwide was a XX% and more markets, over of trends up been have growth increased tremendous encouraged While acquisition

to [indiscernible] the visibility collaboration The relevance. the each UGG, including touting with has highly a which fashion drive target increase brand-appropriate number was globe, the brand new EMEA publications, across visitors and region increase the and Helping strategy consumers. a around was aided continues Europe. buzz UGG done in the fastest-growing fashion team job in ugg.com featured the by awareness benefit an brand’s to excellent executing Harper’s DTC few past an XX% years, over of Bazaar, respected in

York-based through this levels been consumers and maintaining internationally key record the presence in on drivers rooted designs brand excitement these the collaborations, runways DNA building product strategic brand younger U.S. in heat with Madhappy. exciting launched ceremony. Most London-based Tasman on new partnered New around brand, UGG weeks ago, focused recently, with brand’s We centered And the Brand Palace; opening collaboration LA-based the few Gate just a UGG brand UGG believe fashion fashion an and with around winning lifestyle world have week of of

Reflecting for demand this the versus to Google year last increased interest in UGG, XX% according exceptional Trends. search U.S.

Additionally, UGG styles last towards like a the UGG working Heritage updates the from strategy U.S. year such of the years. largest XX% the and the XX perspective, Ultra drove and to new been year, which this UGG Mini and the appeal to in consumer these styles as hybrid diversification Classics, by groups and all purchasing has like Short over-index category included in an the age of X popularity products brand’s brand with fashion outpacing core versus exciting XX Platform remaining continue the Mini, range last demand that of helped other items the The across over consumers UGG fiscal reflects Classics products successful Tasman. cohort increased year-olds, to

brand Now on leaning its engagement reducing UGG, feeds to love into that strategy UGG concentrate product inefficient create consumer-first brand and cohesive and to brand through from approach, expect codes sharpening lines product while than product plans ever, direct the experience SKUs. families The recognizable featuring consumer more is insights. the a consumers

we for growth. and UGG product time, next now aligned across strategy more selectful storytelling offering. impactful phase allowing and better this margins and will Over transitioning focused of UGG is believe a efficiencies, globally drive the greater to

reenergized complementary ensuring most both to full-price a established several the consumer these emphasis heightened demand brand brand the work brand’s silhouettes. UGG connection increased counter and a category increased successfully love the past its consumers, the the UGG for fiscal and product global products years, propositions through greater weighted and icons; that most year has across foundation meet healthy strategically popular the on heat to variety offerings and attention This future. the new in its are is for gender permission brand in play and seasonal building placing In for iconic on to is inventory XXXX, with lineup. of growth core Over brand’s categories the established

Overall, insights timing terms the from to of is team through volumes in and UGG creation challenges UGG it currency headwinds. and compelling data layer developing fantastic products each delivered a result and within given shipping comparing The impacts faced the integration process. both abnormal consumer product the of of

for the years. exciting continues excited ahead to as on momentum maintaining opportunity the are build and year last the We the few brand international the

Teva. Global of with for is for a for year brand the destination to year last a in Turning the leader a brand sports increased XXXX million. consumer. be versus the to growth sandal outdoor This record $XXX to revenue continues double-digit Teva become XX% fiscal modern second consecutive as category year aspirations to the

the X for brand this the ahead additional fiscal the Teva as increased aimed share next toward driving over We investments about year at are years. confident through opportunity growth works future closet

results direct-to-consumer of drove than strength were wholesale $XXX by revenue. both incremental businesses, From XXXX a driven and of fiscal performance which year our million channel across perspective, more

year, $X.X XX% healthy XX% consolidated segments. DTC basis, On the reported in revenue. and both on revenue growth physical last to representing DTC comparable a the versus revenue billion, For increased basis a year, with digital increased of XX% nearly

year. were retention, which our acquisition global last momentum XX% increased and Gains the direct-to-consumer business respectively, continued driven of in XX%, and by consumer versus

headwinds are drove We encouraged especially of considering dollars, significance international double-digit all growth in DTC reported currency that major markets. the regions our in

especially partially in last wholesale reported gains the by UGG Maintaining we XXXX. we global to revenue omnichannel continues domestic as which of occurred our fill-in did premium with both authentic our year and for that wholesale reflects revenue the the ongoing of DTC environment. activity in XX% On positioning which basis markets year, reduction the The a fiscal share on seeing success consumer primarily an is navigate respective management. and priority, repeat testament we HOKA be brands increased our brand, and a are to a was versus for top wholesale marketplace brand market not dynamic year, as offset their

full will to over that, on Steve? With as initial our I year results outlook to details fiscal year XXXX fiscal and on XXXX. quarter hand further provide Steve as well our fourth

Steve Fasching

everyone. Thanks, and Dave, afternoon, good

continue we react XXXX well As fluid model year covered, flexible with serve currency us with delivered Deckers foreign and financial outstanding for another even top once high-teen environment. Dave result substantial just headwind fiscal delivered double-digit a operating operating again growth, macroeconomic and Deckers line a discipline to margin. as to

brands, have Our full-price in to of ahead. fiscal collaborated year and discipline, our financial the of levels percentage management strong maintaining create omnichannel, heat on drive long-term the portfolio coupled and brand to marketing growth high teams execution selling, brand capitalize and foundation levels long-term the XXXX. priorities, and record of while demand for leading earning Decker’s as high commitment to for profitable continue our with in strategic to success years are our brands

of With that, fiscal a our us and recap fourth results. XXXX into year get let quarter

increase of brand experienced lost with million, prior the more came brand in abnormal was quarter quarter, supply pandemic-related the as including in an last chain the the as momentum nearly revenue was patterns by reduction driven representing supply demand. the recaptured well DTC previous in wholesale the by X% disruption. year’s issues due UGG as HOKA, and prior $XXX year. offset chain Performance year revenue This year in lapped in For versus DTC the a strength Teva continued revenue at fourth revenue partially brand as doubling from in the shipping to normalized

strength HOKA partially the from sought period. for primarily from DTC currency mix XXX usage, margin seasonal air lower which XX%, to basis of Gross ocean headwinds improved activity offset from promotional margin The the the product freight brand rates, point the non-core fourth and year by reduce of reduced were and UGG as increased the rates. freight exchange relates levels brand unfavorable in prior business to continued foreign inventory channel favorable a increase quarter was gross and

higher gained quarter we representing down of the for of revenue, where over SG&A compares SG&A of areas results, the repurchase year’s as last $X.XX million XX.X% on as a and a increase was share $X.XX revenue. XX.X% share XX% we $XXX compares which spend share coupled of of count $X.XX, These percentage in leverage earnings to of income result prior with year program, marketing, per $XXX interest year-over-year in and our lower which drove a performance. a avoided to revenue was to million, diluted period, a representing as increase.

exceptional basis full fiscal year which to fourth billion. a With quarter, XXXX on a results, our delivered Deckers includes the last reported increasing record of revenue versus year XX% $X.XX strength

by last to global benefited more was added through across of revenue improved ecosystem an year, billion environment. driven compared and expansion as $X.X its access brand and growth well-managed supply logistics HOKA than from As chain the points

XX.X%, the was to down Gross promotion exchange unfavorable last year. reduced XX with lower-margin decrease rates offsets higher versus margin greater increased year of The and margins of benefits in was closeouts, increases mix including of basis for points price levels rates, air of from related gross entire the revenue in and freight, levels mix freight first half foreign currency brand from business. an DTC ocean positive a primarily HOKA

SG&A $X.XX lower revenue was XX.X% awareness. delayed help spend SG&A short targeted billion. and spending is was of XX currency the areas as reduced marketing year for of SG&A headwinds was revenue, to driven prior primarily below inventory a last XX% to build as up spend the we represented in which some year’s by percentage leverage where offset dollar to points basis spend as $X.XX last billion, year. compared versus year

is which XX This margin a XXXX last year headwinds. currency despite points in year, all basis significant XX%, resulted full above operating of fiscal

year, jurisdictional in changes XX%. which last effective tax of as a our result XX.X%, year’s were higher was mix is above Taxes year, business. this the of primarily For rate

Our repurchase, interest strong $XX.XX, represents year’s with a lower income performance, which a share count earnings $XX.XX. share share diluted per from culminated over in resulted along and of higher last increase record a that XX%

Turning was in with the $XXX million, cash no to borrowings. we year our balance of during outstanding up versus March $XXX sheet. last million we had period, the And XX, the Inventory ended XXXX, time year. and equivalents. point X% At same

For capital XX%. returned results invested these the at approximately year,

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

for an still shares approximately company the at fiscal over For billion XXXX, million $XXX.XX. price $XXX remaining year XX, had the At of per stock entire March XXXX, under XXX,XXX repurchased we authorization. approximately $X.X repurchase share its average

to our moving Now outlook.

For range the top full of versus revenue and DTC majority prioritize with growth brand’s management $X.XX HOKA prior new the the approximately engine, growth billion, the in the as of in approximately fiscal as we no year wholesale line expect with we added prior XXXX, X% year, doors growth representing marketplace our XX% year main of of the globally. increasing versus channel expecting the assuming net growth

year greater XXX may relatively higher uncertainty. digits, low expansion UGG improvement prioritized international as XX%, price have favorability U.S. DTC outpacing focus as full is expected once and we increasing basis increasing as single on and than from business acquisition last marketplace the by expect growth environment the mix, Gross to And be promotions, by marketplace which more driving a above with wholesale as margin model. we pull be brand’s consumer driven is and are offsets approximately we we slight again maintaining which drive margin DTC that mix, from flat anticipate to management. year anticipating consumer HOKA a than retention, increasing we last points

expense of include and scale quarters chain is what maintain HOKA spend to improvements operating gross we markets. which to the margin gross freight our in and but see last organization, e-commerce we for expect areas, fluctuations tailwind gross fiscal includes we’ve awareness areas year, reinvestment between of match fiscal are in net footprint the reinvest approximately year compared the critical operating with of delivered in-line to across the to to slight when growing the Currency the tailwinds of Through as expected supply full be we into improvements be expect leading strategic headwind SG&A which to an to revenue business, XX% year. to capabilities organization, including key expected our margin areas in in and XX% delayed margin enterprise, XXXX. grow approximate margin marketing, international we’ve talent

all projecting This of effective the tax are XX%. $XX.XX in earnings $XX.XX. expected share an an per rate range in to to XX% diluted We of results

from $XXX last expected Capital expenditures refreshment, above select retail new million, to invest strategic $XXX are projects, of which in including be million our as note, opening range capital in the year one-time Please considered bolster and IT is and supply any does in we to warehouse repurchases. be and this guidance that chain any contemplate impact not charges locations capabilities. excludes share nature may additional

shortages, no deterioration assumes are of changes rate fluctuations foreign but guidance supply and to, and which and disruptions, expenses, confidence in uncertainties, geopolitical our pressures, and recessionary not constraints chain related pressures, current limited inflationary Additionally, exchange tensions. meaningful include, labor risks consumer

quarterly With guidance not providing a delivering formal year, focus be full course. on we normal fiscal per the will

had However, experienced we the of international that quarter. during to expectations ending to in context not year halfway repeat brand years the we wholesale include the as first couple occurred that slower shipments quarter, due below are be some wholesale to fiscal shipments growth provide HOKA distributor the the the expected year’s over earlier last is our June the the not slightly quarter These guide U.S. X% wanted growth for to revenue through first full XX. repeating early UGG anticipated and around first quarter last given

first quarter to the everyone. closing hand of Thanks, dollar certain investments. to significant call expected And now Dave guided the for we remarks. is growth full to SG&A planned to fiscal the back due I’ll be similar his year double deleverage phasing be up to anticipate and digits is in rate as the margin Gross

Dave Powers

Steve. Thanks,

product major build priorities managing our to and HOKA remain We performance the player drive expand in connecting multibillion-dollar on with progress continue the executing retention through in a growth while elevated our brand actively offering, a investments. marketplace strategic continue and strategic through business to long-term towards consumer by segmented against consumers to and and through vision, DTC athletic brands markets grow experiences acquisition the our focused into space, UGG driving international for our

wholesale disciplined levels position global to well DTC summarize, as with strategies focus to as than top-tier global faster development These while behind we key scaling inventory on the with codes profitability and To maintaining to organization. feed our strategies, Again, and year with prioritize consumers, to a our business. consumer points further we marketplace to model, the UGG brands of fiscal Steve management our infrastructure acquisition, I’d operating to momentum organization to support us of and emphasize in demand coupled direct-to-consumer young brand for our invest to manage of grow plan recognizable of products the with our outlined a continue portfolio drive like bolster some guidance XXXX. our align powerful

fiscal XXXX. dedication of behalf in for employees their record of and earnings team, all year drive us our levels like I’d support entire helping in our thank to On of

Our the of commitment stakeholders. our strength results of demonstrate people delivering value and all our our to to brands,

and across our of building in whole the Deckers proud incredibly are organization We this on years ahead. forward to the success accomplishments look

operator turn over call to the Operator? for Q&A. I’ll that, the With

Operator

[Operator question. question Laurent with from first ahead today Vasilescu Paribas. Instructions] Exane Our Please from your go comes BNP

Laurent Vasilescu

focus global to the be Thank potentially about Any can by assumption mentioned maybe afternoon. just assumes Dave, good perspective? around I working for new love is just potential. gave local and with great color the audience, on for I How congrats your think very kind to Thank you as year. and know another overseas details you would you, growth HOKA some that of much, the China? where it are But no stores? to HOKA really on But you net size in I there up doors. business, year where ask channel its about potential maybe would for partners perspective just dynamics for in good there quarter. really your you you. international open is – this for journey? up big great. mix we up Would XX% be open dollar you journey think And

Dave Powers

Happy Yes. about HOKA. talk to Thanks, Laurent.

question. the for thanks So

of of this first and have with we like The we’re special, say brand runway lot very strong in is thing game, a long ahead very, sort very I of we it. a would feel

want experiences. ways, segment in We and no consumers some product But flood doors we’re We rush, to market demand. don’t control of in appropriately. want our to want across the to right? So we ahead

so And with this at time. same doing we’re managing exceptional way the right the growth

And our channels, the just job, of inventories, think that. managing where you done across so launching consumer, I an the marketplace this as all the exceptional teams do continue by know, in and to have going to balancing segmenting we’re

early early correctly. we’re you meaning marketplace international that of we there if yes, that – do still look opportunity. So say is is would innings, in lot still in at is the make to a managing in certainly, but I growth, sure more the the international innings, need the there I the are mean, whole brand things to we many is ways

to cases, they that with close distributors markets, represents have have We sure working we and going distribution such have segmentation – presentation right the across of the right doors. the doors our make brand some some better as to the Italy, that brand we’re in In the to marketplace. in certain

look you’ll we is and that some of probably this So the improve done brand. the brand health the door which so of Europe, strategically if the long-term can see you year, closures at yes, presentation

UGG and right? COVID HOKA we’re doors. pandemic and the it’s And particularly to everybody brands early and And HOKA, of look some I market really our number expected little If we’ve back. set through do made working than we It investments COVID have opening. well. sets there, doors partner better the a solid China, back both days, like of are a you a are will at seeing success performed bit. The say they

partners, of key some of with I in China the And that you. this some some have work agree best We at brands. bigger with the

across can demand that ahead better international these improving get marketplace the faster and a accelerate given awareness in that we we we don’t of at rate. think I markets are

really And right you is think I lower brand our globally, and HOKA in imagine. so the XX%, for can now around is, that’s China, as certainly awareness focus EMEA

very we And that we’re and We some profitability, excited of in way right to as demand. manage we’re the opportunities and see And markets going in representation price health the need as But all markets, the these build full for the a to the distributor for the opportunities, brand. said about build this at really Asia need I Pacific and brand, those front the we consumer sell-through consumer to experience. the region, including exceptional so growth the of of experience. of beginning, health brand it

we’re time. So this a at for long

Laurent Vasilescu

to marketplace, across a that And Dave, expecting Maybe channel, if you a than big I then color Are you’re seeing can you as faster in have grow mentioned the you for just wholesale. the – your wholesale great? little in what great particularly two little unpack any U.S. And would brands? audience? be DTC bit run follow-up, you that the That’s for more will that hear. a think

Dave Powers

Yes.

getting it. better as are our building DTC we’re up our focused So know, better at in you we on and been, we and very business. have And long-term strategy

in this We our industry. exceptional doing have teams

consumer of across We’re for the lifetime all spend our for channel. we leverage that our all optimizing data most our We profitable categories of all expand gain our brands. information It’s brands. marketing value, can

in return to all on across things with to and the we’re business just want of to as would marketing mentioned. that our so we more marketing through our business it on flexibility to our DTC business continue in we because And I drive right? we natural win, sense just of DTC. the model to spend, channel. grows, Purposely, look funnel more that makes our ability marketplace, we our DTC invest spend our when So And and going

and mean as we’re know wholesale. in that in the pull Now don’t want and from well. doesn’t we wholesale you best like way positive what wholesale as a partners, going that’s back to to doing, we’re with We be

That products for think is our to into ultimately optimal ecosystem We and the our XX% So brands. well around in I think company the long-term wholesale all of flywheel pull for in a wholesale DTC probably people mix. get new of come model then for and our this DTC. our that’s works to them for having introducing also

at HOKA you’re both see wholesale. faster so ahead a DTC this and And growing year rate going in than UGG to

Laurent Vasilescu

Continue success. Great.

Dave Powers

Laurent. Thanks,

Steve Fasching

Thanks, Laurent.

Operator

your from go Jonathan Komp question. ahead comes Baird. question next with Please Our from

Jonathan Komp

Yes. Hi, Good you. afternoon. thank

next more follow-up remind need Just HOKA that? the for the within to the and you growth just year any What year? or DXC to wanted did wholesale you comments this how us, understand should could then year, given Just get the the than fiscal year different growth – looking trying plans growing on not backwards door color XX% growth looks for – how look say, last about to And I rate? doors, XXXX? to

Dave Powers

by on I give growing you that obviously, specific the number we growth than DTC Yes. tell can XX%, think don’t the I DTC specifics brand. higher that. we’re if But is

Steve Fasching

going is DTC lower be wholesale that. and to than higher be will than that

Dave Powers

Yes, yes.

again, – and that’s So by design.

mentioned of in is, I that across you’re like net chain, I think what new Europe. seeing the part doors in

number. So a global if think you of that’s

our And for long-term, net-net, we – net will set in but any the new so marketplace door some guidance have you not doors. planning we’re And closures. the

one the do we Now of things evaluate hard to is really work doors. our

And the presentation very experience, and close in-store carry our productivity customer the that pay to of so sell-through we HOKA in. doors attention the the and we

that at for performing are that. share. doors And high are doors, so make we account we as They their to after taking in to and we the then sure new at are They doors expand we look level. a are adding profitable can want

evaluating brand having off that. as don’t market, how up There in want We don’t lot a opportunity said. But price. and damage promotions. to We the the I the want flood may want doors be a to economy long-term. based the want year this for the through works. locations know don’t open consumer demand we that don’t end to constantly we’re of on to We take sell premium it brand from back inventory and to to strategic So perspective. We want be more

think we especially some closing so net for I in effectively manage it’s we progress. are prudent, and doors planned year more environment And but an opportunity where key neutral, a that that as accounts for this things this who is have

Jonathan Komp

changed Did that say a sorry And roughly Yes, missed many in just how it. makes I as and ‘XX? follow-up, in if how that doors you you’re sense. fiscal

Dave Powers

we’ve I don’t think shared that.

Steve Fasching

throughout We increase didn’t ‘XX. of Jon, we number give FY did specific doors but numbers,

of be will we some ‘XX. anniversary FY So in in that

So in the to those year stores. related benefit full will we channel be getting wholesale the

we but – So haven’t be growth some through will door given But specific anniversaried shown is wholesale was yes, ‘XX there numbers. in growth in and ‘XX. that

Dave Powers

healthy, us. our then some outdoor specialty, compared right, marketplace to our run one say the in about and in that of is very also would still a specialty for peer doors thing just productivity to especially group. And I pinnacle is we’re note And Yes.

us, our healthy And so we’re and share. that important our really for and door closures and are Those continuing you for category won’t customer take segment. to margins, super in healthy see expansion

And has not strategy that so changed.

Jonathan Komp

the a if Okay. then margin follow-up on Steve, Great. gross And just could, comments. I

it’s case, first quarter back. XX% looking full year, for looks like so is it I Did typically quarter? crystal the you usually, about guess, – below Just the clear. And the if first say that’s the

if something I And back So there is year? that’s level? that anything this XX% don’t maybe getting you. you back holding Thank know there broadly, more is to different to

Steve Fasching

Yes.

right, you’re to similar What said we’ve Jon. full year. is the QX on So

in as about so improvement you’re that a growth of that of talked is HOKA by of the Some be contributor kind to mix quarter, QX the being there. channel we’ve going with mix talking about and a brand driven

how some opposed well. quarter some And then we really get and the what the of from it kind things freight standpoint benefit freight economic year, going benefit as So there there. have get to opportunity, benefit in out further we as a freight. ocean in to we’re an standpoint, ocean last of the will be factored of terms then will And improvements in play just are I from think

think will I that levels promotion. be the closely will year the be of levers we throughout monitoring

some if a expect, promotions we at could that are there. be potential there level not So

Dave Powers

promotions. Marketplace

Steve Fasching

and rates. levels assuming currency kind at current promotions, marketplace So of then foreign right? Yes, currency, we’re foreign

the kind two we’re be will that those So of watching in the marketplace.

Jonathan Komp

Thanks again. very Okay, helpful.

Dave Powers

Jon. Thanks, Alright.

Operator

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

Sam Poser

and question. even question, to Erinn, taking then not we from I’m for as count move on have can Thanks I normal a that my there. question going my

Dave Powers

ask just you. tell or to you to want want it You

Sam Poser

quarter, would in brand direct-to-consumer love I the for by Yes, of please? or breakdown fourth the wholesale dollars

Erinn Kohler

Sure. in year. of me. here you got full the Sam, front the I’ve full I’ll year give

can QX. into You back

Teva, So $XXX.X for Sanuk, global $X.XXX wholesale and that and distributor million, was HOKA, for million. $XXX.X you million; with $XX.X million; other $XX.X leaves UGG billion;

Sam Poser

much. Thank you very Alright.

I sort would this support so inventory to up when than it you HOKA that was about And give – The some was get the be. let’s now high color was Can anticipated give gave better us down could in one, the it significantly inventory what like So the inventory to one, the you right shape on what now? call number color it. – you, the and to sales. was of UGG looks as last

Steve Fasching

we give of I’ll brands, Yes. and you direction. but you give numbers kind give I’ll won’t kind by of

bit some pressure you do better. that with with So UGG closed did a out, little in HOKA. and we in we revenue, UGG the as us some margin styles the brand the expect, helped within that seasonal significant on HOKA, growth have we drive close would improvement of growing QX as inventory the brand positioned much really some as out non-carryover that but

I think composition inventory, the of are with. So overall, pleased very we

good we stand. supporting HOKA, So, our brand growth, think our I inventory levels high-growth where rate sales given in a for look really

Sam Poser

your HOKA the does marketing strategically spend you lastly, in mean how how are And was brand talked year? you good or mentioned guidance want plan to initial it against we do? for increasing then interestingly the your brand. – are the HOKA last I marketing talk better the you how much What about and spend ROIC. – your HOKA, increasing marketing And you about

is year, out HOKA increase? XX% much into XX%. and guidance the you for to ROIC the I believe last with ended built up started XX% XX% of this So, at how increase

pretty that’s darn Now, good.

is of the could last you up manner you we So, here? are guiding did this year, XX% in seeing end – easily same kind and

Steve Fasching

start. will Yes. I This is Steve.

way it demand. did I the we are think saw marketing Sam, the looking is with drove So growth we clearly, we HOKA, that the at

demand And large we a had out brand. unmet we were we of Also, where ‘XX, benefited so HOKA clearly, from that. with coming FY

that was So, the early a lot the year driving of in increases.

the throughout able marketing continued our margin. our saw we marketing that of XX% still tailor of achieve what year where is spend That’s think to to some operating we I were productivity spend.

That’s are our for way the same leverage marketing, how the necessarily we ‘XX. of currency of face able productivity not at the So, even drive we headwinds, in it were in the looking respect. to that looking at some FY in

global We the to brand. earlier, international are awareness Dave continue, looking to mentioned HOKA drive around as

So, we increasing. looking at are

marketing spend global year a we benefited really that productive Last campaign. was how see from also year will We first is. the

So, over productivity probably that. improved experienced

on next So, be in I just to want to year. invest going But continue careful into marketing. we assumptions will

to of continue productivity dollars high We see those spend.

awareness, brand but We Dave innings said, and early here. a still, go are to increasing we as way long

Dave Powers

few over Yes. right now on from level really the quarters is have as awareness you high heard focus, brand. the us the And of marketing last

turnaround going marketing digital quicker out home. a on that’s higher connected of to is our not international return right level. of This It’s get to consistent This level as to an to purchase. as little bit So, go on the see on need and TV. website. of we you investment is them in direction. the front the more to These pleased be then yes, things are say, to consumer with suffice take and But time

on a are focused and could initial sure. launch athlete be think We Fly this have improving very exciting more more the some the and upside, Human Fly marketing. of impact, there in performance for updates year, it’s of And bit the going to positive little I a on

Sam Poser

assume from the long-term building you for and talked marketing for stated long-term And short-term you that health. one sort working of brand, got that. thing, last out dollars, mean benefits about I is I awareness have year, you last But

year, think the a got Can based on wholesale the that sort you you to compare of strategy one on competitors. people of unknown your side? planning not are is Europe guiding – And from then you there of marketing. on did the difference especially here, this fact, short-term in just competitor because your and last I that brand So, by way that hit are already same a am for I bunch you benefits

Dave Powers

makeup new. I growth, plays the or very running, our and exceptional trail in are in, understand space, to They high people would where They are we incredibly the long-term authentic road outdoor two I of in product, why performance committed both philosophy performance. brands. the both brand the compare in very Yes. thinking and and both different think a are but that

it successfully. brand. But certainly, us When operating think casual we the are are that in And wearing shoes and a a has think comfort down at for I hardcore pull the occasions on served incredibly performance walking. model. we comes end distribution, our of are people and I to day,

I to coming folks years, it we background, know committed that have Stefano President like this. of are new do the success And works, other many done my to from you brand Nike look and this companies and and know for our we at all and think we Deckers. long-term this how

ahead And of supply. so well for it’s working demand love having it’s worked UGG, well for We HOKA.

business. think brands a good company that’s think just like distribution. a ours I way for that’s run the we healthy to have premium and premium I that And

years could grown front a really model it product maxing sometimes to in of a really, hope that but at think or is you big an approach. it’s brands There have putting model compare look there. doesn’t, is over it And a works, it’s it’s out And sometimes because it consumers. other around push Underarm really – fast. if brands, the other you I distribution,

it that. reorders the our And over. a premium going to we inventory with emotional and hoping and get the and focused brands, as we – through the left on sells prefer with are are we continue is you really in who have pull You year, you But the next model. connection prefer company growing brand push building don’t

it much quality way. do back mean fast it too are grow be a as to Now, But going Sam, and doesn’t can. hold going not we to in we opportunistic and are as we

Sam Poser

good much very and Thanks Okay. luck.

Dave Powers

Thanks Sam.

Operator

next Nikic Please comes Our question. Wedbush Tom your with question Securities. go ahead from from

Tom Nikic

Thanks guys. Hey for my question. taking

a the like Following big a to presence little ask last of department in been the it earlier brand we kind got macro store skittish result Obviously, environment on about question that has and U.S. UGG has and couple wholesale, are some investing UGG. feeling sounds you – Laurent’s also about up mall-based want last department week your store stores I years. about of from sneaker bad in –

thinking season strong in how had some fall-winter And the pipeline about of Thanks. UGG of innovation have do the holiday are partners couple them keep your the this to peak wholesale following you of the kind results have years? for So, just year? you engaged in last

Dave Powers

It’s good Tom. a Thanks Yes. question.

year, last think realized table the I we that left we all little UGG. a of on bit with money

even mall-based demand to higher table. strong high fall. could months it’s Tasman, still done point, People we have lifestyle though We six through thing products, is really, course, of accounts, able a and Ultra it’s high want At really a want the with had including sells UGG, the some bit would maybe but it’s on of success the for even the money our those one They and so our our Mini, The more than store, going And athletic were key the us fall. I it time, all business biased, later, UGG. of last supply. our on UGG accounts, We the Tas price into opportunity incredibly same us need say for accounts a athletic it’s Platform Classics, our platform. margin, little big well. left

our And adoption, of be UGG the And sure heat portfolio a an them. working and our it’s XX handful their rates overall acquisition brand in conservative bit, a making is brand consumers, you tailoring a very, XX to that pulling really now. very from heritage the healthy is work of a team strong that business Anne while styles, little President, modern of or exciting. very fall, UGG around than the where because up on to is line, is the right things our is clean her ever. the are of And that’s of the our is the the metrics consumers, have really it been in see stronger new And a are inventory on of have can so right updates. little a we brands one back classics now And brand inventory, bit there may pipeline and winning, that more in have for with we innovation going key we marketplace. it’s one perfectly have set done and

challenge And with I wouldn’t read so there there into as is the numbers out a distribution.

about brand. We are worried the

assortment accounts, behind exceptional product to season. and going key are inventory DTC an have put a focus and growth we it, good We should with into forward

Tom Nikic

best and Great luck of very much this to year. hear. of Thanks

Dave Powers

Thanks Tom.

Operator

Nardone Chris next America. with Our comes ahead from go question question. Bank your of from Please

Chris Nardone

question. distribution I back to guys. for Thanks go like Hey the the to would taking strategy. HOKA

is clarify what business market HOKA you of the First, opportunity to do can And follow-up. specialty specific channel that from take share And your segment? a still I comes wholesale there in have then you think percentage today?

Dave Powers

Yes.

We doors of how much run X,XXX that haven’t we shared very very, tell it’s specialty it’s strategically, can meaningful. America, share. the in you continuing But the It’s roughly are channel given but North And is. we mix to haven’t important. business. And I take

yet. We one not are number

of seeing and all little that take we talking are last to long increases distributors that. other we as with share, opportunity at years declines we continue lot some they had share brands that’s our we the They as are serve how case week same one, the And HOKA, innovation And are in in bit channel in first one that of take is support. there number was there. X the I UGG the North this are were of so going are meeting and to do to But person to and a accounts saying and that thing. less doing was And a America. and and sales and not that in we in

Chris Nardone

of just clear. you guidance? confirm you in today? Goods. included and in talked two XX% are are those guidance includes this about Dick’s not Got still Have in And Locker how Sporting range accounts, and Foot to the and you that’s HOKA want many doors just of terms growing And I then that just total, the it. the no doors. with new for That’s in very year strategy

Steve Fasching

Yes.

we right, Chris, is number one. said, in doors. not The kind have that of take what the this will – named I we terms in of So of specific Steve. have partners space

are globe when we we look we may on accounts And of Dave across of at global was looking door some in the have terms there mentioned, Dave door some expansions, say that so basis, there about to as a have doors. as will will have And accounts going productivity contraction. before, are be that talking

and that we aren’t So, are and some doesn’t door mean about going given new What or accounts. talked other that partners, haven’t accounts we going which But accounts open some we those means haven’t to accounts. which we specifically doors to open doors. doors with close may with it we is accounts, by

Dave Powers

very in would say, Dick’s pleased are are the both seeing I But productivity Foot and with we we Locker.

Chris Nardone

Great. guys. Alright. Good Thanks luck.

Dave Powers

Thanks Chris.

Operator

from from comes your question Jay next Sole with Our go Please question. UBS. ahead

Jay Sole

HOKA you just with – talk about wholesale. so opened you HOKA and DTC I growing pop-up talked DTC like that. a outlook about owned that sense Can learnings you you store Thank have Great. of Dave, much. for know your you faster have than you think stores store footprint, can you of experimented some hope and us and is stores things time? Give have up? have what what your the kind and over been

Dave Powers

about talk that. to Happy Yes.

very We are how are HOKA stores performing. pleased with the

and that retail, HOKA our the make sure way. customers that we served to of a we days in premium get early in want are experience We right, are

right the assortments. have We

out a work on teams premium you of takes the a when little create to it so bit think a job have done time And and that. I kinks knew those experience. And great

evolving store. when are be component right design, going is We to want important we get open. to another of We store our that which

the in we test lot the so test are U.S. to doing of And a appetite, test markets, experience. pop-ups

We our New will have York first City. soon in full-time store

growth. grow a weeks see as of feedback. you mix. we But that to markets few I not then Retail are above the see continue HOKA’s company and your expansion over internationally do rate forward a line in we our think and to guys part and Long-term, certain the growth company’s in to at line stores at DTC but some – time. HOKA And markets. going to toe a with do think head important better are be America, obviously to brand, know important and stores will well. as looking in as an point, our of look time. a And that we in for for with That to DTC place particularly major we not But build this retail long-term. component versus as North see leader the to at Europe but component, in is and apparel get change and it business we key as may modifier in accessories China of will the the to experience it the over brand a out

Jay Sole

year. Okay. That’s internationally. time, are for helpful. HOKA growth the can because If mentioned just And at HOKA also you I early especially to guiding XX% innings, that this is you still same

as fiscal how about year little than HOKA Like brand, long-term translate a understand bit that the what sales what’s what I the lower I growth has bigger see of year? out this picture? opportunity like, figure growth question is year. I sales it $X to like a really think are if mean question innings $X.X exactly And $X billion – should of we this there. that is big this I last there out versus is time? do growth, over into about billion mean, should thinking for a rate much huge trying billion investors rate of HOKA? ‘XX you brand for is slower a in this talking year. will Obviously, end people growth at be sales The a early think

Dave Powers

Yes.

is I would – will $X brand. would soon, thing a say billion So, we the I pretty be

a figure of that for just out. on you the shows already, math you brand is do of awareness that is a than and level, when awareness And think opportunity but over global billion much we more higher much like can then UGG, line have I we global have how that of We sight the years, against who HOKA. much, couple next and level the you manage their have it with $X

lifetime people through you haven’t this that through about we So, numbers about how from mouth it’s the that hear there look do a what innovation word But do repeat means we for our a brand of try who we game. people and it, purchase from of value believe that of brand a consumer, When perspective, engine, at the if our space what look it the just is and many heard still brand perspective. tremendous know at to white and who from desire And category kids, at want is a hike, global apparel, a into brand this you marketplace our lot confidence outdoor think of accounts grow marketing opportunity. established through we brand, under expansion the team this teams trail the running, and the And omnichannel Stefano have athletics, management in and a on we teams the years. certainly teams running, the global multibillion-dollar that level. have lifestyle product beyond about leadership then over into road etcetera,

do opportunity as sure for know we We accounts, but right. certainly to do make to it this we key And how multibillion-dollar want brand. with see a – partnerships just this. we this Our

Jay Sole

much. you Got so it. Thank

Dave Powers

You bet.

Operator

from ahead Piper with final go our Abbie Please comes And question your Zvejnieks from Sandler. question. today

Abbie Zvejnieks

quick have Hi. just ones. I two

wholesale apparel I that wanting then businesses from update given Just about to little just bit not talked obviously on about can you impact you HOKA on hope bit. an wholesale little flood cautious I the this the your discretionary partners, UGG? and any But slowed both orders know a a of the you Thanks. growth, the consumer market. give from pressures can at spending? more talk And

Dave Powers

are cautiousness seeing. we I say would Sure. no

the now. in But any. productivity economic with I doors, open the to our accounts. And seeing – best-in-class, smart run right our that’s regards managing to buy climate being are brand, it’s as the specialty if and in we turns mentioned, far in not – these total is So, the any cautiousness their some cautiousness as in as on not really of or certain HOKA for if best-in-class there

to year, But anything, On wouldn’t a apparel, expand order opportunity say any look good as And at there right there we so if over all. as cautiousness it’s there now, more book the is said, is question. the I years. this we

We UGG have here talked apparel and about there both for and HOKA.

I marketplace. critical eye, right in assortment to of UGG, make the then And new off we think taking with a more and to for products got right and the want we have line a good leadership start. sure the we that

And the business so right, pause a same we the bit taking the collection, right, to as are sure a of DNA ready-to-wear that get that little design on collection. growing get lounge the the assortment has make

our you a If look go you partners product of the ready-to-wear. at own disconnect and one lounge store, and our department lounge between into and go there then into is store

up. that So, to we clean want

about winter that launching excited are and we cold this the also and weather year outerwear collection We more product boots. are with

going I think of it. be a part big to that’s

reset really UGG of long-term. strategy what for are So, a you in the the apparel now is seeing just

side, HOKA last mentioned, the HOKA meeting at as On I I was week. the sales

that she innovative hired collection was is and The new audience that very designer X.X HOKA, good really and some it forward. is the response Our little in this very, there. by we there, has there looks think first a exciting put pieces in major the years I ago,

‘XX to see but ‘XX comes. demand are for supply then to it the you and better, as again, build and So with start better apparel think accounts starting getting for the and long select a the this and we and and HOKA DTC spring few is a is in plan are product that and grow going going fall demand us to

long-term the marketplace, to right. for product strategy, opportunities the of So, hundreds in millions the both resetting leadership get certainly but want in brands we with new place time, over and

Abbie Zvejnieks

it. Got Thank you.

Dave Powers

Thank you.

Operator

for And turn over will closing management with back the ending would session. I we floor question-and-answer today’s be remarks. to to any like that,

Dave Powers

everybody you joining we forward to Yes. look No additional to speaking and next us. Thanks comments quarter. for for

Operator

joining. presentation. thank gentlemen, will ladies you and We And today’s that conclude and conference call for

disconnect You may now your lines.

Deckers Outdoor (DECK) 25 May 232023 Q4 Earnings call transcript