In the latest financial update from Deckers Brands (NYSE: DECK), the company has reported impressive results for the first quarter of fiscal year 2025. The report, which covers the period ending June 30, 2024, highlights a significant increase in net sales and a positive outlook for the remainder of the fiscal year.

Dave Powers, the outgoing President and Chief Executive Officer, expressed his satisfaction with the results, stating, “As this is my last quarter to report as CEO, I am pleased to share these strong results to kick-off fiscal year 2025. HOKA and UGG continue to drive robust full-price demand in the global marketplace by delivering compelling products that consumers love. Deckers has an exciting future ahead as Stefano transitions into his new role as CEO next week.” This transition marks a pivotal moment for the company as it moves forward under new leadership.

Stefano Caroti, the Chief Commercial Officer and incoming President and CEO, echoed these sentiments, stating, “Fiscal year 2025 is off to a great start, with HOKA and UGG delivering fantastic first quarter results that have contributed to our increased outlook for the full fiscal year. I’m excited by the opportunity to now lead Deckers and its iconic brands, with the support of our talented teams that remain focused on the long-term opportunities ahead for this great company.” This leadership change is expected to bring fresh perspectives and strategies to the brand.

First Quarter Fiscal 2025 Financial Highlights

Deckers Brands reported a remarkable 22.1% increase in net sales, reaching $825.3 million compared to $675.8 million in the same period last year. On a constant currency basis, net sales saw an even higher increase of 23.0%. This growth can be attributed to the strong performance of both direct-to-consumer (DTC) and wholesale channels.

Channel Performance

• Direct-to-Consumer (DTC): DTC net sales rose by 24.0%, amounting to $310.6 million, up from $250.4 million. DTC comparable net sales also increased by 21.9%, indicating strong consumer engagement and brand loyalty.
• Wholesale: Wholesale net sales increased by 21.0% to $514.8 million, compared to $425.4 million in the previous year.

Geographical Breakdown

In terms of geography, domestic sales were particularly strong, with a 23.0% increase to $515.9 million from $419.5 million. International sales also saw a robust growth of 20.8%, reaching $309.5 million compared to $256.3 million in the prior year.

Profitability Metrics

The gross margin for the quarter improved significantly, standing at 56.9%, up from 51.3% in the same period last year. This increase in gross margin reflects the company’s effective cost management strategies and the strong demand for its products.

However, selling, general, and administrative (SG&A) expenses rose to $337.2 million from $275.7 million. Despite this increase, the operating income showed a substantial improvement, reaching $132.8 million compared to $70.7 million in the previous year. This indicates that the company is effectively managing its operational costs while driving revenue growth.

Earnings Per Share

Deckers reported diluted earnings per share (EPS) of $4.52, a significant increase from $2.41 in the same quarter last year. This increase in EPS reflects the strong overall performance of the company and its ability to generate profit for its shareholders.

Brand Performance Overview

Breaking down the performance by brand, HOKA and UGG were standout performers for Deckers in the first quarter of fiscal 2025:

• HOKA: The brand saw an impressive net sales increase of 29.7%, reaching $545.2 million compared to $420.5 million last year. This growth underscores HOKA’s strong market presence and consumer appeal.
• UGG: UGG also performed well, with net sales increasing by 14.0% to $223.0 million, up from $195.5 million.
• Teva: In contrast, Teva brand net sales experienced a decline of 4.3%, indicating challenges that may need to be addressed moving forward.

The results from Deckers Brands for the first quarter of fiscal year 2025 showcase a company that is not only recovering but thriving in a competitive marketplace. With strong leadership, robust sales growth, and a clear vision for the future, Deckers is poised for continued success in the coming quarters.