Fueled by higher levels of full-price selling and double-digit sales gains for both its Hoka and Ugg brands, Deckers Outdoor reported 81 percent net income growth to $115.6 million from $63.6 million for the first quarter that ended June 30. The period marked the last earnings call for CEO and President Dave Powers, who is retiring next month. In after-market trading today, Deckers shares shot up nearly 8 percent, or $66.86.
Total Q1 revenues rose by 27 percent to $825.3 million from $675.8 million, bolstered by a 30 percent increase for Hoka to $545.2 million and a 14 percent improvement at Ugg to $223.0 million. Gross margin increased by 560 basis points to 56.9 percent, lifted by the higher levels of full-price selling and lower freight rates, which will unfortunately be a headwind for the remainder of the FY.
By channel, DTC sales rose by 24.0 percent to $310.6 million year-over-year, with the US business gaining 31 percent. International DTC lifted 27 percent higher on strength from China and EMEA. Wholesale revenues increased by 21.0 percent to $514.8 million. Geographically, US sales improved by 23.0 percent to $515.9 million, and international sales jumped by 21 percent to $309.5 million.
With the results, Deckers upped its FY25 guidance. Annual sales are forecast to rise by 10 percent to $4.7 billion, with Hoka sales improving by 20 percent and Ugg sales increasing by mid-single digits. Management said the rest of the FY ahead would be marked by a more normalized promotional environment and higher freight costs. The company’s annual operating margin is pegged at 19.5-20.0 percent. In a separate development, Deckers intends to divest its Sanuk brand, which had a Q1 net sales drop to $6.9 million in August.
