Deckers Brands, intent on growing both its direct-to-consumer and international businesses in the months ahead, generated a 42 percent increase in Q1/24 net income to $63.6 million versus 44.8 million for the three months ended June 30. Operating income was 26 percent higher year-over-year at $70.7 million. Total net sales rose 10.0 percent to $675.8 million from $614.5 million in the year-ago period. Gross margin increased by 330 basis points to 51.3 percent from 48.0 percent, bolstered by more high-margin Hoka sales, more direct-to-consumer business, and lower freight costs.
With the quarterly results, Deckers raised its FY24 guidance for both sales and profitability. Annual revenues are pegged at $3.98 billion, up from prior guidance of $3.95 billion, due largely to expected 20%+ growth for Hoka this year. The FY EPS range was lifted to $21.75 to $22.25 from $21.10 to $21.60.
A closer look at Q1 results shows group wholesale net sales declining by 1 percent year-over-year to $425.4 million, but DTC revenues rising by 35.3 percent to $250.4 million. Sales in the U.S. market lifted 9.1 percent higher to $419.5 million as international market sales increased by 11.4 percent to $256.3 million. International DTC sales rose by 20 percent, helped by gains in China.
Except for Hoka, all brands in Deckers’ portfolio had lower year-over-year sales in Q1. Hoka, which accounted for 62 percent of group revenues in the period, realized a 27 percent sales gain to $420.5 million. In a historically low seasonal quarter for the brand, UGG had 6.0 percent lower revenues to $195.5 million. Elsewhere, Teva sales fell by 18.8 percent to $48.4 million; Sanuk quarterly sales sunk by 32.3 percent to $9.6 million; and Other brands, primarily Koolaburra, suffered a 33.9 percent sales drop to $1.8 million.
