DECK - Earnings call 2 2024 | Deckers Outdoor Corporation

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Operator

Welcome to the Deckers Brands Second Quarter Fiscal 2024 Earnings Conference Call. [Operator Instructions] I would like to remind everyone that this conference call is being recorded. I'll now turn the call over to Erinn Kohler, Vice President, Investor Relations and Corporate Planning.

Erinn Kohler

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

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

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

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

and known the numerous to any and differ predicted, from risks, and reports some explained implied other Factors XX-K of report factors on uncertainties in has Risk company involve The that actual may filings, materially statements Forward-looking results Form these or assumed results forward-looking and statements. cause uncertainties by our quarterly unknown in annual SEC Form on the risks XX-Q. including its section its of

measures accounting this accordance any were or any On the in call, constant with or Stock the disclaims currency. Exchange, States, as including statements. in the intent to may prepared generally rules refer not York New update to company required listing accepted United financial management Except by principles of that law the obligation expressly forward-looking

company the reports on a the sales periods. and comparable were throughout prior current currency open basis operations for direct-to-consumer that In reporting constant addition,

because important operating operating With over they unrelated are results. measures be of to that that, exclude The not turn indicators and core financial performance that now company these its non-GAAP may it its I'll are believes items of Dave. to indicative

David Powers

for versus in XX% diluted revenue quarter, discuss our and our time afternoon, Thanks, eclipsing gross to to points levels increasing second for improving basis first XX% and year Erinn. increasing share today's quarter XXX our last today be billion versus September thank demand, per call. $X.XX. marquee great exceptional with the ending year, last margin of here joining brands experienced you leading where Good It's nearly versus to last consumer X full-price $X to high everybody, year, you earnings

the and XX% Our nearly brands growth a of in direct-to-consumer UGG year, increasing XX% business quarter, last in global XX% consumer acquisition. than greater the increase as with was versus experienced increasing second revenue HOKA XX% fastest-growing component both growing

Our quarter, XX% up global last growth by business and versus also brands, wholesale strong HOKA. increasing year, put revenue in our UGG the driven largest X second again,

in for for our achieve shipments the Our some wholesale both results fiscal fall heat across to wholesale selling continue this confidence the and our our our first year. outlook brands. strong momentum key demand, quarter see seasonal and accounts also incredible to With half increasing benefiting for consumer styles included accelerated

levels particularly of across channels. selling capturing marketplace As on to have demand with high management, momentum the we captured products strategic of focus strong in continue these price early full are to our we year, pleased the all

revenue and driven retention, We DTC, year. increasing on its across ecosystem global versus first last international total across increasing and for the XX% on increasing think DTC international a last brands respectively, focus channels, XX% we Deckers year-to-date with XX% revenue to important XX% half record XX% across performance. out delivering UGG primarily HOKA by strength closed all total portfolio from increasing our As regions gains acquisition it's year, year, XX%, I full revenue versus and all of reflect global from revenue points, portfolio, and access across global growing

investments. provide increased I'd like Decker's gains, long-term performance DTC details elevated and through grow and the outlook brand, on international will our and performance proud into objectives the strong, alignment experiences, are connections acquisition drive build our a expand call. to in related HOKA While multibillion-dollar financial through later how retention we continued consumer of with further to Steve with and of near-term growth direct-to-consumer through UGG emphasize performance targeted products

revenue With wholesale driving increased that, more result distribution. first Global high gains brand's half, sell-through points versus with in the first business execution, let's with get reflects year. our starting existing HOKA. the successful management is last HOKA DTC impressive share half to market from of successful our XX% conjunction the of which at price full in marketplace highlights into This

increases XX% in revenue first HOKA year prior was aided brand year. from the consumer last year. in in versus and represented by which XX% retention, the the brand according growth increased global of to last proprietary up year study, is is acquisition, revenue, which consumer Decker's led up versus by half prior and which direct-to-consumer, XX% awareness XX% XX% versus This tracker was up

regions nearly markets, grow. international experienced room increase XX% with DTC mid-teens approximately in the across growing average, help the a gains region. HOKA and revenue for EMEA in to channel first XX% acquisition in to doubled and U.S. our with growth to major year-over-year to significant on in achieve half, awareness consumer DTC more rising the Specific much all to

is of consumer. as revenue, a positive relatively with This represents percentage indicator this a that EMEA European the region, increasingly our great progress expansion DTC HOKA resonating for total we see though and its remains small

through as consumer. brand DTC hold activations demonstrated the with thoughtfully brand the begins strategic presence marketing the U.S., take to have in local we building awareness to As catalyst served acceleration as and marketplace a

In nearly in opened continues HOKA Garden most exceptional to one To presence markets world. the that increased was some revenue for XX%. flagship which the college frame first XX-year-old powerful increased influential fueled time this with believe increased by age the retained recently demand last giving versus the XX% growth. consumers, having resonance Covent HOKA U.S., first of a growth with students. deliver strong its end, HOKA We footwear among London, in European back-to-school DTC to year store the around half, the in in brand XX- of

awareness this incredible exceptional among performances athletes. given loyalty consumers the an have connecting group especially building repeat potential FLY of through content, events teams at of highlighting exciting HOKA global value with compelling Brand is purchases. and HOKA HOKA-sponsored HUMAN done lifetime FLY the marketing The campaign job, brand increased

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HOKA set Series and greets, We way in with through on UTMB testing to engage camp HOKA on these the Finals, a mark meet the at future included already looking the learnings Dacia the events. event, than achievements, history X and the XX-hour XX base including made of a its to a gain unique becoming team consumers with and overwhelmingly forward both hours. the in positive opportunity the standpoint, HOKA athlete and that World making race shoe feedback product brand received more miles experience At product athlete up Jim the offered leveraging UTMB, personalization. elevation XXX-mile American the to first athlete, than less performance Walmsley time several a a of man record completing course impressive from that win are

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serve of to emphasize We are full points as the consumers accounts product implementing positioned access the DTC the are ecosystem offering. ensure to of brand's respective our destination across HOKA experience their best greater the segmentation depth to and pinnacle

across full the the is brand demand drive of wholesale, brand deliver to includes its up growth at quarter, which beyond. inventory executing delivering the awareness on global product focus in DTC healthy year to Complemented heat balance management remains fourth on sell-through and and which our price to HOKA focused by to innovative For and marketplace launches year, results continue turns. building the well for strategy, the high team a allowing new this coming expect HOKA increase helping and margins several fiscal best-in-class with strong of remainder we

currently last levels product shifting marketplace on half fall XX% last brand's some pull performance brand for ever by a Marketplace now. management strong leading for the brand the product, been have relative campaign and marketing was intentional to We in I've scarcity cohesive, the fall key brand's of strategy targeting styles the year. years. increased Global to management to consumer aligned most globally driven The of time of primarily strength exiting marketing has first high seen and revenue versus UGG. half first heat, UGG. core forward Now past UGG disciplined

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we we campaign caters and developed Like Feels marketing As year, fiscal to seeded targeted opposed frame. as July the in most September popular brand's time began UGG to products that inventory strategically fall this the typical

the From a that of frame, time influencer we and received groundswell public buy to announcements, reminding over level believe We the search team's strategic using the XX, marketing UGG XX% views saw Videos consumers for earlier fall demand UGG year. served now. saw of fuel during versus last to on year, Google helped to last to shift demand #UGG UGG July August globally. million XX In shift increasing service U.S. consumer Instagram compared according XX engagement catalyst as greater with twice a as this specifically, interest Trends. back-to-school

at kickoff September, XX% tail revenue by publications momentum music the to superstar of influential business press the increase B, nearly as significant end regions, from season first #UGG and the this the incredible featuring last going international above classic Vogue which resulted created media our and particularly UGG. heat keep a DTC video XX with of This such with translated featuring the results, UGG of of directly coverage billboards, team celebrated year. announcement had To million whose half views. in global official UGG both Brand launch new versus dipper experienced and Cardi

that products Furthermore, quarter. historically Tasman fall generally and interest the platform This weighted The towards in is franchise, more benefited spring transitional of at the as and expected. the half ] TAS as Mini years well been gross growth in first margins UGG brand's second selling the franchises carry have a price lower [ UGG end average the summer with business including revenue and products has search selling full the and as contrast Ultra of Classic Mini price. products during focal with dynamic DTC prior been from

key some modernized are during Lowmel, expediting are and demand versions also through popular days. a is products fall well style, with new we group items a that which capture UGG demand season Considering the original DTC collection, Tasman neumel. hybrid positioned hybrid take of the Dipper, We consumer the great production excited season. and to greater colors the for marketed mode we've which already are and thus chase for the inventory including gender resonate globally aforementioned seen far, holiday with to in consumers weather select of includes as all a sneaker Neumel the franchises of like we are ensure beginning the on weather-ready the well, to the classic

well, brand's UGG consumer when growth half weakening especially lower the The and a us up economy factoring first sets signals confidence. global of

have dynamic, demand with competing this are this of continue products earlier seek pressure some as brands Given we to UGG during the at captured upcoming holiday glad season to more reduce help price. premium we selling full promotional to

our direct-to-consumer versus first Global last and was on in channel of the both performance. of half, discussion consolidated to DTC gains primary driver XX% Moving increasing wholesale, growth year. revenue with across the being

and domestic respectively, increasing Our revenue online. as relative consumers in stores across to robust XX% and strength DTC portfolio and channels was and XX%, regions XX%, retained XX% increasing respectively, with with UGG year and respectively, experienced demand increasing and and with revenue XX%, last and acquired XX% international consumer brands HOKA

in Additionally, of combined focus greater exchange selling more as price HOKA, with price a double-digit a proven result a selling mix fewer we higher saw foreign rates. for currency increase SKUs of average and favorable full on a UGG

run wholesale, HOKA was Growth sources. continue gains according across well UGG international growth to is by now year. both in driven the first of brand in primary domestic revenue as Market and for specialty XX% share which to and in as be our global U.S. avenue half regions. the Regarding versus last increased market top-selling third-party aggregate, in the stores wholesale HOKA, strength

the partners applicable top key strategic brand in HOKA with doors. has also become quickly running

HOKA regions market majority half right share performance with strategy this top the the growth, brand's credibility. is in the the which performance of while of proud wholesale strong business fueling brand's line international its achievement, UGG extremely in validates are teams further U.S. the Our the brand rooted first year our maintains with in

consumer positioning results, brands points. ecosystems across access it marketplace excel first that to strategies our the and increased are demand these management well, holiday their half quarter respective clear during With our is working capture of

I long-term Steve hand Deckers, valued resources the announced that in objectives. focused comfort-first to our for it products. I'll also most to are of effective more note discuss alignment off allocation detail, Before innovative long we Consumers to Sanuk we're At and Sanuk. with results our that plan in its on fun, our divest have

chapter to and owner growth priorities. Steve. we to the the support continue Over months, we over execute coming it will the brand's find next hand to work to I'll our right everyone, now while Thanks,

Steve Fasching

Thanks, good everyone. Dave, and afternoon,

our We half execution to excited UGG benefit strong performance by are brands. year the and to HOKA stemming that fiscal of continue exhibit marketplace management through from first continues XXXX, strategic our the

world. covered, UGG broad-based quarter by of across captivate growth, regions channels its strong DTC, around to elevate consumers and by and led Dave drove demonstrated HOKA another presence growth while the . As continuing

enter forward exemplifies the Our quarter. our we this our quarter revenue record to exceptional second largest and most momentum as fiscal complex we for demand look brands, and continuing

to for With to a financial this are challenges navigate the persist, drives committed success growth. believe dynamic While sustainable well we long-term and building in-demand strong brands, framework positioned remain foundation we macroeconomic ongoing that we marketplace.

get second of let's results. the Now into quarter details

contributed quarter of XX% brand XX%. and channels, year across and increase quarter demand On of increased representing quarter global XX% the basis, wholesale Growth DTC $X.XXX Second fiscal grew revenue last XX% to was HOKA strong the million billion, and increasing and revenue by channel, prior growth of million delivering XX% a driven constant year. $XXX revenue the regions DTC with for increasing experienced XXXX versus currency revenue versus $XXX versus the primarily was last in which across year. delivering UGG total an broad-based

the chain the past as the couple availability transit consistent in UGG level wholesale supply to growth first, of in logistics in of years times first and is higher with With consistent the of year from inventory have quarter that our brand's pandemic. quarter the this benefited a shipments expectation, were QX captured the HOKA second more outsized have performance improved in reduced, relative during

increased for Second, prior brand popular styles same, consumers sold UGG those took scarcity and created year; quarter quickly the earlier brand last our on year, place time to third, signaled consumer an some shipments reminding the driving year, which demand back-to-school the an frame purchasing accelerated seeding original of period, level earlier this out of and the the that the wholesalers to in which global heat for demand during that relative fall plan. desire in campaign

margin points Gross XX.X%, second for XX.X%. year's last the was quarter basis up XXX from

driven SG&A to continuing ocean mix, from from benefit XX% in quarter exchange second fall favorable lower up mix last quarter as slight of margin million product areas demand, Second DTC than a million, rates. foreign partially investing versus with UGG spend $XXX year's earlier favorable UGG wholesale we favorable grow the price benefited gross currency rates, $XXX the full dollar was mix, key faster by channel and freight business. in continue

of points the in percentage from earlier spend. XX a revenue, As timing demand versus resulted timing primarily certain regarding consumer XX.X% lower aforementioned the last considerations year. SG&A was This than and prior XX.X% year, of basis

was rate culminated $X last over the for These $X.XX tax earnings share per earnings to share, which of growth for compares per Our diluted results prior year's XX.X% representing XX.X%, just year. XX%. the above of EPS quarter, in is diluted $X.XX which

a made from the between share This small from approximately per split reduced evenly diluted benefit year. higher benefits in was past the count and gross share share earnings revenue, over a increase margin repurchases with resulting

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

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

remaining company XX, had for authorized of approximately share the XXXX, repurchases. $X.X billion As September

product price [Audio timing the early selling robust demand comes this in to third year's of the slower of the Gap] by XX.X% full range due global revenue HOKA DTC be was full the continued single launches towards quarter UGG XX%, brand of strength XX%, growth reflecting as early. driven with capture fourth low to anticipated expect being digits. heat quarter. demand. of the second brand able to year of Gap] This strength to be [Audio weighted We in still from above quarter growth upside the of to percentage

invest XX.X%, is XX% to as percentage the of XX.X%, in the SG&A as reflecting approximately to business. range margin a of is expected Operating the in gross now be continue key now expected to be margin. to the we areas sales of improvement in

rate still Our range and effective be the per guidance any this in charges onetime be Please is $XX.XX be share tax may in increasing nature $XX.XX. XX% repurchases. XX%, and any projected we our now expectation share additional diluted of to not in of to excludes earnings range the from impact considered to does that note, to are contemplate

no deterioration in risks rates. foreign assumes shortages changes pressures, of not and fluctuation current currency inflationary confidence uncertainties, to, geopolitical but guidance in Additionally, pressures, which labor tensions, are our limited exchange meaningful consumer and recessionary include, and

for proud HOKA Thanks, the global awareness, appears revenue UGG combined now be heading performance half back to hand more year outlook. a and of this the his into remarks. of macroeconomic guidance gains exceptional despite by challenging give strongest are the us fiscal UGG industry. brands, Dave our call X HOKA us We of achieve The back everyone. which confidence led are I'll increase first from to early with half final the the environment. the our demand what fall to we in the in seeing to brand's

David Powers

objectives our on incredible paramount UGG success Marketplace remains and deliver half, results fiscal our believe and buck we ability HOKA demand company industry management for well as Steve. awareness of brands. build to delivered have increased and the and outlined ongoing we to Deckers Thanks, continued the full trends the drive today. we year our is to positioned for first

proficiency an delivery create is truly lasting organization, as our to allowing strategic of brands and differentiates Our in the what objectives implementation consumer connections. Deckers

forefront consumer We shareholder financial our brands, objectives discipline, deliver empowers our on doing engaged what employees to deliver do. at we of flexible operating fashion the value. This performance everything alongside innovation and are dedicated purpose-led our with products our experiences so model, meaningful exceptional and highly approach, great to results focused and to long-term and culture continuing across with of

executive like Deckers' dedication team to and good as seeks to leadership all our company values to employees do organization across entire I'd great. our do our and for continued of the thank their

launches us support. these at Creating continue continued joining everyone, Deckers. We on next future efforts, information read today, our look stakeholders FY sharing of Change 'XX forthcoming and you to I'd more Thanks, which for For our forward thank encourage all to to your you ahead here exciting week. report, the for

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

Operator

comes question first Our TD from Instructions] Kernan [Operator from John Cohen.

John Kernan

a to in of I in momentum hone the XX% go Excellent. QX, is total as almost QX year phenomenal into Obviously, UGG. terms on on wanted Congrats tremendous of [indiscernible] quarter. full you And just revenue.

So just curious.

Given we particularly all think see, in how in particularly the in the UGG about half QX. QX, year should you momentum the DTC and of back

David Powers

It's a Dave. question. This is Yes. great

marketplace, of brand. activations called table year, the First brand the the in that in influential that up putting The did job the left other want for capturing QX. we to earlier I year, partners experienced on opportunity team and last Cardi B you momentum exciting phenomenal some demand recognizing UGG cleaning the a place all, of that the in out, recognize with

marketplace. to capture the success. we set really demand And some in before in the there's is the globe price potential the season company, done of before the before. that, have to And amazing early the never slowdowns buzz have holiday teams in up we're experience just at for marketplace, witnessed across sell-through, shopping the able full health The this were the I excited collectively my something job palpable. that brand an It's

continue is for be of We're the that could this it So set well. us going year. incredibly up We're the throughout challenging we're fact optimistic a mindful that to marketplace.

but fact, for we are we're to not naive that prepared So it.

very into of we the so out this or put far. have sold the -- marketplace sold mentioned in well the some prepared year, we styles key that As remarks,

in We a we across that many confident some a mode are across are But board, those chase of products really bit styles. performing of of well. in I that the breadth feel a silhouettes, think we have

have in those. right the in little a We've and the in lean to eliminated but in we're assortment inventory react lot marketplace. bit We the noise going some, a chase places, of

across powerful incredibly and campaigns have activations the and brand. franchises We the

have We a UGGextreme, we're launch winter an new way. exciting of a that to going investing collection in lifestyle which start in, deeper is

We And promotional have great our need in us, want environment. marketplace. especially we They partners. this relationships with wholesale to the stay above

to we don't So in that. want get caught up

We really want how marketplace has strength healthy far. maintain really We're fall channel. and going to clean and feel it's our excited working we a season strategy, And and and how about continue DTC our off, good kicked the drive well through so real to continue. to that's it's

John Kernan

one to making Can Maybe just pretty profile growth of up margin significantly. like planned basis and the of a it. Got the are SG&A just you're back the you in year. quick investments behind talk on half some follow-up on looks UGG dollars the It HOKA?

David Powers

Yes. the to this level invest into and the we incredibly continuing to have teams to We're be to us people, culture we going . We're the are secret earlier which I'll and around we're of Steve our so collaborative that big motivated up important is forward and things in, is and for similar brands to what these investing growth year, to that win. grow culture. details. in in But believers top talked innovation. of which let about X is continue to maintain able is our one fired to talent sauce get speak, that that really component,

have out there think Systems want our We there. company We're systems of now about to good not where right we alone data a all data. that to bolster their I a don't and innovation at. supports powerful brands. pipeline feels continue they're there's that and that

pike level to to We down technologies coming run we businesses with AI so continue right teams to visibility effectively leverage then do can the heavily they work there, have invest be of their in providing our but want and and the marketing. some

an and struggling share in and do lot that We aggressive this going that. profile constrained to other we take with with of feel marketing promotions to a lower dollars our have that are continue we're to with environment now to inventory peers and in environment, stay margins and right a opportunity

Steve Fasching

Yes, John, Steve. this is

think I just the Dave's we're an careful that we've what of indication is about where said placing of disciplined kind we're as think increase that now well number very one, organization, on think, financially guiding comments, is and now to to. very years operating in margin that a investments. of I we're further we're for an I And the

thought. have and make these we're that the I past And taking the think to us, we to times sales been for the been that so in And performance we're what we've few is going of using saying the what investments outpacing invest trust originally business. places. that that's quarters in right We know

in are continue of we to said, investments, the sales. making drive as these business proper the Dave so levels And that

increase we're for our leveraging marketplace think with management, the demonstrating and investment, the that some way increased I approach, even lift year. margins the that's in disciplined gross we're to operating. profitability the And investment of

strategic, very a in way. it thoughtful, doing we're So disciplined

David Powers

guys fixed. of more worked last our And we've that, is add I SG&A ensure that know, you on the to would thing as Yes. variable hard versus

year. And we of on so a . half of maintain pretty some the cut back model flexible in should those the things need to agile, second we

Operator

question next from comes from Komp Jonathan Our Baird.

Jonathan Komp

impact growth and follow-up. think mentioned I about might ahead QX? in on how from trend? the HOKA, terms and product the on trends? your chasing [indiscernible] And what thinking you year, seems detail a of how hearing into pipeline in about shifts Could then that Everyone cushioning as little be the want the retail about just partners some we of next of any to calendar the just you order staying rates QX competition. more maybe you to a share color the are ask And you're really

David Powers

Great glad you question. I'm Yes. asked that.

is when a we starts the QX that to into again. QX spring/summer speak, So We're of make lot next kind year. thinking pushing the really beginning sure in the time to spring beginning how to second in exciting, the Traditionally, put kick when running of volume come into get of we're to year little bit want so the a But we of launches season of do. color season less we holiday the the our That's powerfully time strategically half of frame. really to at launches the about frame. still in on out

It promotional marketplace allows out the fray to QX. of of us also stay in a

situations athletic slowdown of a the where above fray, channel So so to we're to in QX feel launches launch where marketplace, our of the a in and speak. inventory space there's over I on. with to a lot better there's lot X of markdowns anticipating the QX coming that particularly promotions we in it's we're don't in inventoried want going of major and innovation of lot major, stay the when the

to tell going that launches strategically obviously, that our I can in And us, to don't that position dominant for And have teams of the So of decided There created. we we'll in from competitive you is very lot category evolving that's brands seriously. the QX. want those oversized we're that are We push are X in the and activity, trends lose innovation taking exciting. how direction. the address coming a launches out to then incredibly

line bottom X were Some that good, ago type of as we X not differentiated is with the bad, profile. but some we're years as or

compounds, plates, and that. little a fact trail low the want heavy do. go use addressing we bit going we foams, to that et and new in everything focus their different are our We're different the may materials tremendous to testing, product after geometry forefront cetera, But think for a continues product. at there's of But We of uses profile. opportunity hike. be our people different want on technology, They of

in dominant We already. a that position have

for So it's top of mind the team.

Stefano in of HOKA Interim coming pipeline. fast think new some those team tracking as brand I QX. brand of to the President up we're the done exceptional job has with of unveil our innovation an the excited concepts leadership And

Steve Fasching

add on is that Yes. the And I this think, Jon, just strategy laid we've with out. that, to aligns

a change. not is this So

awareness brand full aligns the -- As price of with our we've the marketplace, to year selling, continuing full importance said outlook. in build the controlling maintaining product marketplace

No we're so that And front. operate continuing change on on that.

see what's paying really to But with can going and what that's to brand tight performance, and continue we strategy, marketplace be on good you management, growth we're by the that's HOKA QX with off. our and impressed As still deliver.

David Powers

really maintaining an marketplace HOKA the brand. listen, HOKA having And theme a here think the is for healthy is I year. exceptional

saw or in level, event we results this half Chamonix, on year France. the promotion year You at of were UTMB event the first the dominant a in the

in Nice, HOKA . Actually, American won contest. just won today, was athlete winner News Two Our is Footwear Ironman first athlete weeks of later, the in race, by the France. championship male ever that the announced it our the that brand year.

seeing and consumers. increases awareness in acquisition You're from our the

channel. innovation in and we cadence we product of is and manage out still We're the sure make Our strength price the marketplace and exceptional. think DTC. I to doesn't here, of in the specialty And tons to is strategy effectively want have run selling and the introductions that it on. momentum dominant full the ahead drive to us of that got We've teams spot laid that continue get

naive excited, about not really some of now QX the as same a it talking may we're that but sector be that fact time, are So is at be tough. the people to in having the to right fact this lot challenges reasons

We going and but just marketplace, again, to haven't that attention to quite sector this But full keep issue the to, brand pace. close pay that moving we're we scarcity in a at healthy seen it's maintain want price yet. sell-through a economic

Jonathan Komp

just if If couple helpful. it of hundred to down of a for half slightly. at can maybe year-over-year look guidance second margins sort the implying implied And points I X the performance, EPS on down the I very flat close basis very, year. ask and looks kind you're like of That's financial operating Steve, follow-up to

Just such could you growth us that sense rates on year-over-year those? help is after both obviously of make the first half strong of

Steve Fasching

sales from raising keep to with moving is of . We'll how out we've full we're lifting it's combined full back in a you're half. beat see sales lifting part of right? earlier recognizing know, through a half point half, operating year QX gross of that the it was in the that not had focused half benefiting the think planned what back of some question. timing you the year, Yes, those appear that sales I we it's And some quarters. back our full good of passing But yes, the experienced be the our Jon, on sales we're not And part margin. little we're saying, marketplace that at full is year, we overall as we because the the year out lift, I our in of timing. as while lifting second of the so time sales at with QX, year, We're are and in margin. of the in this bit. plays into a full of our year, think overall kind of the half But what year, year of taking improvement second this looking QX some is

the like long the at basis. We run. on the a guiding So Dave year. full we're look managing year, the the business we're for said, We're full business managing that's not quarter-to-quarter how

that some to additional investments. us is make outperformance QX of allowing And these in

Operator

The next question Research. comes Paul Lejuez Citi of from

Paul Lejuez

then Curious comments can HOKA during the about business, UGG there's the date? if you DTC to had talk year. last about if unmet side, trended some that on quarter? quarter any And make And could you also the how you demand

what demand? being chase that in ability on curious assumptions to you're second on and your again half [indiscernible]. chase for I'm UGG to able the about mentioned You And your mode fulfill are

Steve Fasching

Paul. Okay,

a Some was best take of my -- little that I'm shot. -- harder to going I'll

Steve. is this So

look XX% so to when DTC very with And signal. they factor that consumers. the of having HOKA QX, going up are just strong HOKA the that business, closely watch flow in orders fluctuations of as there And resonating the up is performance. and we wholesale be demonstration on real strong, QX at We with strong how true well XX%. demand another DTC know So is

by that. encouraged very So

lot about a as the brands into marketplace, a thinking get think how Dave of environment. are. inventory. space. articulated in is there competition like we're of of seeing lot We managing promotional there and I kind not We're just out don't said, we've HOKA as promote over that other having QX We're not is want that's promotion. and know to back to we half, a

And brand go, you QX. quarter David? those new and style planned then this a we Do question type we was then part chasing. fourth bigger so increase forward other for And continue want on how your second to to build build towards percentage as have intros terms

David Powers

one. talk Yes, that I'll about

I had X varying mini. think it Bow brand way But degrees those X, top-selling have years So quite drove of X You and styles. evolved if Bailey to X we pony X more important clarify of one-trick were honestly, I franchises. If the assortment other Button. success really is all back to And X you go styles. Classic, has was the back at look think brand the go with -- years, is, days. it X Bailey thing X we is in or classic, was but short, X and now and was we UGG what you or business, It outside basically the the the

Classic some a Mini like to and from. [indiscernible] more TAS variation the styles at platform, and the styles in platforms, and Dipper, Ultra Tasman, look choose platform, the ULTRA Mini, there's assortment the et you If cetera, of lot the the

resonating on and the has weather UGG Neumel program. line news styles, weather the like good good same versus have And that about the And they're prior the And XX% team at year. the very by well. is things weather all time, we edited classic reads early the Weather

you in behind and styles marketing focused able the have selling teams putting we've styles put more the a to this key lower year. X We depth Anne's styles that With can perspective, went put inventory been we and inventory. those these to put in styles. So that into emphasis also from top XX inventory traditionally into getting help more

earlier a couple the them, the to reacted we have selling of Now teams faster due than are expected quickly. but demand,

We back I December, inventory, into these a have the the of think not we'll ability to on of some going key in styles. be good but ton, shape some chase end

demand a inventory feel And we exciting -- collection It's Extreme do do. a category focus time, with forward. little very of what new bad we launch not which on need for bit table have the a we of that's UGGextreme case. at coming the in, is us if So the a we Weather same have going that to UGG like the the thing to leave to

So I shape. we're in think pretty good

are and last XX cleaning and the more the the done of didn't across the growth. that adjusting the to job think great power the putting have right teams really year, We inventory I and which styles, we X have driving and assortment styles a up

Steve Fasching

Yes. And I think, Paul, that. just to to add

inventory. that the very that we've QX on strength seen One styles the of popular, with some the down and things of we're have been in selling the

right? be are every to of expedite we nor sale. back limit, sale in, able some necessarily We that looking but won't chase would to to we there's want a And chase every

out, set the well. how increase. we're we'll driver year of full It So play our very is but up see things

half of the into very we're going back encouraged the So year.

Operator

next of The question Trading. comes from Sam Poser Williams

Samuel Poser

then it, bunch of question. got have and a normal of whole Sanuk questions. And all, other Erinn, of my most but Teva, are I you've First have

Erinn Kohler

start I'll sure, off with Sam, that.

what this, you of some global million, think So as million, distributor and out XX can we for at and for leaves XXX million, XXX that wholesale for you Teva, other you pull UGG the But Hoka second I quarter, million; Sanuk of about noted, XX million. with just said. X.X

Samuel Poser

All right.

-- this revenue of in With that going how should out way. and the skip balance to guidance going so that you're through just the that Or think we about So the a to of discontinued are going place on. year? you as Sanuk operation

Steve Fasching

Yes, Sam.

operations. that break discontinued not we're to no, So to looking

a as it buyer. So we we'll find seek report to continue to

that's the current So Yes. plan.

Samuel Poser

wholesale, with flowing in mean this especially much back I should came third business? the wholesale how Okay. UGG there quarter was the in of in to way UGG And forward is QX? half, given expect the pull in the down then lot in we a be

Steve Fasching

Yes.

increase in on for the is basically your haven't what's there So have But to yes, is QX outperformance. orders UGG in depending saying what that occurred we're the that And of model QX. we quarter. you wholesale may guided in leading planned is again, that a portion because

quarterly that were say we you how in QX. don't again, to increase QX had the think forward moved UGG yes, into So that some out. in we've exactly that I of But know broken wholesale given I haven't it guidance. orders is seen safe

David Powers

I to in is we earlier brand much upside heat the of And or QX. was that Yes. be will think just is how through demand QX and captured what still determined continue

say But should way, point, said, to brand continue. this so like. strong heat macro healthy, and the on some going that that we're heading of into But And it's demand either we're environment we an we moves. market well think continue will at that QX. demand through was how we're positioned what it look to depending as optimistic hard think But seems I the unknown and that

Samuel Poser

of So -- -- HOKA, and question. then kind then same okay. And the on

a launched QX? then a -- moving that's away that new -- in on would a to a that -- launch ] new the lot but or momentum look from real does that this. moving and mean you're -- more products business big Given maybe into then QX big launches like moving the as noticed no much. good QX a slow launch mean out, in [ you're few wholesale weeks, I DTC. there's but I of then accelerate And for appears It last very down reason you've percentage,

Steve Fasching

Yes.

there's And to question. look it's different good kind So at a Sam, it. of ways

have year. as looking for at we Dave haven't HOKA way said, we're I the think the and I So said changed

Remember, in I right? launching think because wholesale products in wholesale are is underlying the kind most seen QX we talked we so of be marketplace, about, that important. market a new some QX. as want Dave think QX, controlled as So that's the And fundamentals of we're controlling as about period that to we very

an important think underlying. So that's I

comps large then other DTC a ago. year had The remember, very is, we

like those, when XX%. DTC of you're comps year, was I was XXX%, at think QX some our So QX looking last

off ago. year a quarters coming big very growth we're of So

as other the this. to that's So consider, thing talking right, about we're

other So growth. we've growth. think, to thing, the I is what year about into full account said Then there's take

marketplace. going by again exceeded be growth, because growth second of half has is number, lower full which full wholesale a year we've said that guide half means, controlling first we're that year As to definition, bit our average component the the little

strategy. of is This our part

Now back have our of setup some as at discussed, right? will half that So in necessarily of the and for partners our be but QX, next we end there some captured wholesale expansion our year. get talk won't

So well. to again, continues important perform importantly dynamics are playing said. are we've brand The are very everything is to that well. there out And I that very the in understand. most brand continues there some like is think to perform But

David Powers

the last And last opening Yes. thing would I to in add year, that new QX. doors is, were we

door expansion. So there was some

the doors. still to so quantities a of door setup And led maintaining growth. some year, we're on This neutral QX those in net the through growth

could So year comping that last growth the too. impact bit have door wholesale a little of performance, an on

Samuel Poser

been then And you've Dave, at now long you. Deckers. lastly, how Got

David Powers

years. XX over little A

Samuel Poser

that make statesmen? elder you Does the

David Powers

No.

Samuel Poser

charge in of were collaboration? You that

David Powers

for take That was and it, I see was but want credit No, to team. excited I to the that. Anne

Operator

of The BNP Parebas. next Laurent Vasilescu question from comes

Laurent Vasilescu

maybe for you're if there HOKA little maybe, you I Europe. by I and you Dave, saw how do that Steve, Congrats growth? know HOKA. to you how What's How grew a can give a the bit I a maybe DTC? just you just thinking ask color some -- results. little between what the region. If give case, mentioned about the on I mentioned of growth bit the HOKA us year? And XX% Was about to that UGG such driving international think just solid did spread wholesale between you International you see think quarter. guardrails in think growth that don't you internationally? wanted can that's

David Powers

Yes.

QX that and of . The results. our Europe, don't that bottom been very across But exactly a also of are was particularly So really about growth we teams validate DTC it effectively exceptional a the experienced the XX%. across that all managing are saw That's number. growth the and for excited marketplace ours line can real focus strength of international we creating in job then tremendous marketplace wholesale. DTC the in brand heat brands. that internationally. I was led, we of that know is that doing The in we

that for as smaller but in more were of Europe. that mentioned Iron -- the a our and the consumer speaks in Now the to demand in and events region. we're UTMB total investing think marketing we held percent business, The we health such Man the the of brand

buzz So there's a of the brand lot there. around

just investing that And at there. from managing team in capabilities that perspective, we're the brand and better getting over a DTC

DTC, and still as third What growth strong. the awareness, in channel. create But U.S., excitement the really formula Wholesale to It continue we're is drive other on the driven and that going the steve business for really, the question? still to forward. tightly DTC there. but we we're was lean the ultimately by to the primarily to going being was the managing So that's said, question the is

Steve Fasching

So the DTC you was growth. quoted total think Laurent, company I number international

So the provide we HOKA didn't component.

the So was you total company that growth. total I international think quoted XX%, DTC

HOKA, a see I think for the on then me expansion just do question internationally to little to how was your bit year. we about HOKA

think we and run what are we're the the year community in that trends America a we behind. see further up saw I how -- probably or community beyond then in right? run North ago, the we're to what seeing similar show So HOKA is but similar seeing X

begins seeing in in with and kind America. growth faster Very to or expansion another case build indication consumers, starts bigger that we've percentage HOKA grows. that, awareness resonate brand run North this so terms community And with as what trend to to seems we're that is the the seen runners, of similar out be

So but international, that's in to still extrapolate why very we're internationally, high behind for company, and arena, domestic can on innings early as where brand a growth HOKA earlier well. little and but we percentages that a little international bit those you both that the we're were, seeing bit total

David Powers

London new the and in also. experienced Yes. we're the driving great for A own continue and store well there. Covent stores, results we our China lifestyle perform first brand and and the everyday lot time partner seeing the opened to our tourists runners of our in Garden in performance is start, of mix off is And that which formula a to in out, the play stores stores

Laurent Vasilescu

time launch to the stands you launching to new might last Dave, and to the potential alluded And potentially be divestiture resources the quarter, same us but give where small, then, a a I maybe bandwidth, on pursue That's update Sanuk. that of Q&A, give brand can you the M&A of an at hear. just that new time as Does great think brand. that just capacity with you during

David Powers

Yes, not from us holding and X launching really events. there It's separate back the building are Sanuk a was that brand. new

we at model. So look fine-tuning just these separately our as

have Just this that journey managed to But speak of the brand too And second. in from the very management to is so meaningful marketplace proud really it's standpoint. just scale that last it's a product the our we for is long. few right what now how Sanuk the strong. to decision brand very, that years a realized the I'm over teams portfolio,

home can and somebody a portfolio. is we There's a fourth brand a who this in. other brand things love. that or that think good we is versus invest them consumers in fifth we think can that -- our priority It deserves And for

from regards decision tough financially. and to But the we're those give With I competition, to brand HOKA and it's excited. to much brands. and on, want best of we're the the new going I brand this. working all we don't away a best taking X and too the it's So to emotionally our but the think have UGG company be to do for thing learnings the We're

across super calling, various brand categories. we're a sneaker what creating, And

distribution We have channels. the

DTC the have We network.

some is innovative, this make we but long game think a have that and sneaker leverage have haul, we going the to really is emerging beyond We products. in It HOKA. in some the a exciting of and forward sure that want skin space lot marketplace we a will that be

create about and a workload those opportunities our organic and efforts excited lot far future look. opportunity the inroads disruption. listen, do desk as that has then yet. mind we we have and regards with for a come across listen, launch see while HOKA. we're growth the and for real and we as of focus But on new down can of our to We've and here think it. But always to always it And and road, Nothing exciting that that our company at continuing eyes UGG in Teva what think would attention we for with financially foreseeable looked some enough in if have and brand we us, make goes, top We're next we portfolio keeping years. M&A has it's and we're brands both our on can we our

Operator

today Stichter Our from last question comes from BTIG. Janine

Janine Hoffman Stichter

some of recently tested recent you've I the hear wanted HOKA. you're on think to at been Locker in few more doors that you've more what years, over Question DICK'S, about I the seeing JD. last Foot

Just HOKA. about UGG, curious you any broaden look what if on have more bit it's a I'd like you aperture on consumer you're kind reach getting, the there? type the then the if with love just sell-throughs the of of you to of international. helping hear And thoughts And consumer

the think about more in UGG a to if but hear the would seeing you're is seeing U.S.? strength at momentum love what what there about I HOKA, you with talked international and quite bit similar versus you're just

David Powers

question. Yes. Good

doors full-price performing who performing very, run stealing have are to very new stores. accounts, in strong brand share, year all HOKA was doors Stefano, performance, new So we door sales, that we've I new talking high the the that well, specialty last now, market well. right turns, of opened over very level opened up overseeing that is

day and We that DICK'S cetera. JD, to in we're more. have But and doors every #X position. fighting we a position they in there maintain et build out want want Foot and to new that Locker

in a with maintain partners. hoped it good our full is gross right a type It's for consumer. those that we good as on doing have would way doors And that's of managing healthy question happen. we're and performing So tightly would turns the sign. price line so we the what and And selling it we margins that been have we're

female, male just as but was play, seeing and consumer, we're also a happen. strategic reach a Locker and lifestyle strategic not from an younger as Foot a both example, to volume play, that

the hadn't focus college that on I some success we with think we're QX pay consumers realized really to And in back-to-school was before. athletes, seeing probably that -- XX-year-old off. XX- our of and business

then to Air that away. that to go be to super We're And over the X. our That's big so brand, exciting. close and or college and school it's spike see beyond of brand, Dunk exciting to looking doors, Force NIKE going don't those eye keep a to for a and HOKA the we because athletes gravitating going high choice athletes making want traditional on

So long all healthy teams we business lifestyle need that tightly our to accounts to for sure manage that make the term. and over a working it's that the are and with

local saying And haven't of time, couple at growth, particularly HOKA, of in momentum then And is The years with the it's PR really extremely are younger Steve for is on marketing what in been all in International, and to heat was region. and is in And in product well leveraging working in international, the across is to ago, healthy the in they've activations see. Europe, consumers UGG our UGG Europe some the was point been similar consideration but direction. hard this strong resonating new UGG where the in on a there. consumers brand The exciting right quite position but particularly improving. the acquisition heading level really board, we real. And is

play an to So this region. continue markets. build marketing aggressive and to more on the in opportunity this, we're playbook biggest with is and we to Germany, in activations And our going this get out think particularly the X U.K.

Operator

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

may You disconnect. now

Deckers Outdoor (DECK) 26 Oct 232024 Q2 Earnings call transcript