Deckers Outdoor (DECK) 1 Feb 242024 Q3 Earnings call transcript

Good afternoon, and thank you for standing by. Welcome to the Deckers Brand's Third Quarter Fiscal 2024 Earnings Conference Call. [Operator Instructions]. I would like to remind everyone that this conference call is being recorded. I will now turn the conference over to Ms. Relations Planning. Investor VP, Kohler, and Corporate Erinn Thank you. go ahead. Please

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

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

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

also call and and timing expected on impact company's the of made composition future the transition include of announced the statements leadership today's the Forward-looking Directors. of Board

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

intent and to and assumed materially cause in the uncertainties by section its filings, XX-K company in Risk and forward-looking or our by required financial forward-looking Form statements. rules On the were explained States, Factors these XX-Q. from unknown York any not update SEC Forward-looking that generally Except in statements actual with report factors other risks, the on risks the including predicted, quarterly of New Exchange, on involve principles that law obligation to as some Stock numerous this may of any its implied has in listing accounting The uncertainties any or reports accepted United accordance of refer the measures Form or including results disclaims annual to the and may constant management expressly currency. call, differ results known prepared statements. company

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

for thank Good Erinn. you afternoon, Thanks, and call. joining today's everyone,

built and Caroti, foundation believe products and I all forward doing President succession a Before time innovative selected talent we I'm consumers a personal that planning from more Officer, driving X. Officer, incredibly resonating to and is and Stefano for retire during but be good has strategy it's to member industry brand best unique been of the has other globally. with good speak have marketplace work after our are I'm which an culture. I to years deep continue continues exceptional continue my performance, years and honor of Board life a industry, with has some as and Chief key Board We're doing culture this a note, excellent Serving extensive regional the member a announcement and on this will executive world. of passions the seamlessly it's our our years. demonstrate proud has this and omnichannel, Deckers of and great. Deckers and Chief as him thrilled of discuss Directors. HOKA On on Decker's will and transition. we its our results, talent led Executive helm. know has with thorough my CEO I next and pivotal which the for values, company's and third positive results, of us pursuing inclusive operations as and offer. engaged bench industry exploring to accomplishments strong great of make He Deckers of a the following been at hands Decker's helping more to you impact Stefano and to President to a serve to made privilege ways I he XX Deckers with CEO, in and can XX in team, the progress as decided Commercial a leadership passionate we experience, process. of some family, know looking a in of time spending our to consumer-focused After about you Deckers, a those who I've effective most quarter I'd to he at the don't, that like craft already, our August today. Many make Stefano to

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between increasing per to a XX% across points trends XX% to to record-breaking result via glad a company QX Key Now increasing third of revenue let's continues earnings $XX.XX. We on industry over its first total to resonates direct high basis our guided the our distribution innovative product UGG achieve today whole strategic margins increasing highlights teams to $XXX turn and time full-price the long-term HOKA revenue I'm marketing record-breaking high-quality demand. revenue trend revenue quarterly include product around increasing billion, representing quarterly leading our Brands is consumer of in alignment company to objectives, bucking omnichannel globe, longer-term quarter, decision-making of be as of X and ever growth share revenue, total performance. to continued $X success while the diluted billion total our increasing remaining focused discussing another to XXX believe and attention of XX% of vision company for XX% by on that total deliver with XX% Deckers $X.XX is company that here XX.X% execution an gross to results to our record the quarter that centers marquee of brands deliver quarter real the and be all-time consumer consumers brands strong the and creation, total million, DTC our our brands. increasing our XX% as

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from Starting billion, in X% global and respectively, remarkably closing on position dive quarter the the our the brands quarter for last significant for brand year, This third prior primarily total provide execution revenue in increase the of consumer from the was versus strength creating meantime, up by relevant fiscal and years and additional in this of the in XXXX distinct, to and performance and aided distinguishing But our with brand and regions, management, X%, Global on increased plan XX% year XX% discipline, Decker's breakthrough preserves let's with and opportunity respectively. $X.XX acquisition increased international XX% are are product quarter's rooted concepts the our domestic DTC, competition. represent growth domestic and We our revenue, deeply increasing insights consumer as financial third out brand XX% channel brand XX% which driven is by highlights. across full a related international will marketplace UGG. and financial fiscal outlook and and we Revenue of for year. combined ahead. Steve XX% the retained DNA. into increasing that representing strategic year. was color consumers focus UGG quarter

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posting digital like Seoul, with meaningful brand in that real performance Skateboards, demand Extreme Capsule most that results notably the buzz energy European we This well. In extremely Munich than of targeting, product, and of product launched heat Helping deliver online New Germany. to in approximately between conversion a cohesion which is additional quarter to transaction the of a as for where and location relative brand traffic are year's minutes this to cities winter's further SKU UGG UGG's performance a rate and selling the conditions. These capable brand any and Similar average. contributed popular new has maintained that consumer business are Pinnacle full-price continued fuel increases UGG brand field across to last the experience positive its a benefited with UGG key on UGG and product. support capitalizing with store high being first connections and highest one the DTC quarter, in year-to-date the brand. the and for the bolster double the new create and days, almost or what UGG brutal store, conversion benefited the of few markets, early consumer of and favorable demand opened, brand Colors across UGG attention of anywhere a European well than key there third the As Europe store gross the from fashionable and spearheaded features top-of-the-funnel by in average styles from its in contemporary in strong restocked. Shanghai in offer exciting heat York, Styles coordination year, products first performing are momentum elevated above we seeing country UGG and success consumers experiencing inventory houses behind Hosted brand average hot of rate its Asia. higher often of regional feedback ASP select the increase experiencing brand markets Tokyo. UGG levels reduced values to general, the Shanghai, help growth third out levels China, The launches focused target universally margin most store. much that full-price ATVs selling UGG and the Los most handling UGG activations, a across of social both Palace recognizing standpoint, third expressions XX% of most addition UGG the that products conversion time. and world XX% selling in extraordinarily which wholesale offers York, couple across New in scarcity, opportunities that in marketing were average on of invested and Paris the in count the globe this with operations to consumer rate during social combined when DTC price that the greatly flagship, see brought higher and visual U.S., marketing popular the online including the is commended unmet Both a new a growth listening channels Helping rate drove point, high quarter, highest and additional well community consumer the with driven store the greater more From styles. of London has channel, building New in Though in most stores Germany collaborations, platforms the Munich and are Germany's UGG above Angeles, in touch as the brand in average on was key stores brand's team that year of a for conversation stores opened to kind brand

among consumer is results produce partners. points continue we are to thoughtful key helping new see UGG UGG fostered alignment international positive is that brand-enhancing for distribution to brand. markets direct pleased opportunities touch where a of the experiencing in long-term regions the international The are localized We management these marketplace success creation, now product and our result implementation of marketing multiyear content see

we popular international Mini, a the opportunities and Star most the a including UGG With of Hybrid including momentum Mini Hybrid UGG well Neumel the about of The Collection Ultra Boot. include as global as styles heat Clog has the modern are positioned perspective, update few franchises the a brand to versions each Weather markets, excited more Collection, fashion-oriented was platform ahead. Classic with Weather key UGG as Tasman, success Golden the like Classic and created the and sneaker. and and new brand's style Lowmel growth experienced among introductions the that even From weatherized Tasman,

intended marketplace Star extremely versus partnered third product first in-store with off assortment. in to continue achieved time Our experience that was is greater that NBA during rising has known China's apparel premiumization the consumer quarter consistent a ], this star, The product year, we of HOKA. Global sneaker discounts [indiscernible] levels online. better In despite created during paying global brands. Clog China, new continued HOKA XX% locations sell-through expansion efforts well, continues X significant year. was which what year. HOKA revenue over work comparison higher activity. One on DNA. We which representing competitive maintain sell-through entire brand unmistakably increased of bolster continued generally was diligently primarily believe with capsule DTC success an in the brands, the third all domestic of versus drive by channel influential quarter international significant surprise undeniably the balanced connections quarter XX%, winter, the in than represented Lowmel, see acquiring a driven year-round acquisition a this quarter as our [ and strong promotion particularly More features fall Jalan and Lowmel which cohesive U.S. The seasonality of permission build product. been selling for the category, adoption full experience last high of areas, of year, each revenue X in as as in has and respectively, PRR out specifically sell-through. UGG XX% in a growth increases internationally thank event prior uses important levels Golden to in price of Golden in total million, gains exceptional consumers experienced retaining shoulder percentage performed UGG consumers. gains and year, full sneaker with widespread done XX% consumer XX% first benefited the HOKA indoor focus share to price to deliver is has play redefine growth reflecting to and somewhat year-round throughout continuation by and DTC Olympics. demand. HOKA points that for stores categories XX% of the HOKA is our and Clog Both increased on levels the with into HOKA price the among China retained low brand's and as Similar international consumer spring year-to-date. impressive XX% has categories, channel teams which the retail for their HOKA in and as quarter has a Brown HOKA months which $XXX quickly across increase outside growth promotion consumers but has DTC the to and results. across improve, The the revenue product this growth for driven volume plan third we and growth and the performance, strong by of regions high QX, to Through the a XX The collection retail every sneaker added consumers, as open positioned a this in to primarily of so in and seasons China, delivered that is have globe. UGG greater its full price selling, traffic was Europe, drive channel Star purchased growth region stories single collection collaboration next slipper through fiscal where a the channel see the the key hit in brand all known Garden to which with online, first market during which regions assortment. Both a in presence. and and the hybrid benefited half, example In of Complementing have DTC fiscal exceptionally gains it Lowmel particularly strategy the in in grows. with been has brand's in helped full location being been X brand emphasizing powerful has including in Star like driving the gender UGG added launch, awareness target performing holiday with and driven This our from the for has new was traffic team I'd we wholesale Sandal. Paris of Covent in complementing enabled have third compelling focus the countrywide X opens Day, been to as been a season HOKA particularly managing the well, quarter, London and company-owned Singles brand China, [indiscernible] to previously in with to a the to brand's brand online given has which hard congratulate as HOKA which strong highlight first to UGG online location in from the Golden year, event, through in the the business and this the DTC year. Shifting Europe third in has the has the regions representing year-over-year Tasman's

event I and of athletes footwear driving event the engagement complementary brand X days, for was increasing XXth have HOKA. in of elite in opportunity encouraged we the We markets have believe awareness in are Running the channel, moment U.S. of international HOKA expansion World HOKA a and to the the want for worldwide efforts DTC across been of presenting continue adoption center of by full huge a a sell-through. was environment had also school impact price performance impressions apparel. a Media an Foot We while key we some brand of very to HOKA significant early take to HOKA significant as Cross where wholesale with still stages on Annual that sponsor is quarter. seen managing HOKA ever growth thousands markets, the as amazing high player third highest we high the This the the levels Championships, to maintain particularly focusing the Country National see of Over we for major where in space. the internationally build to during growth, a establish outfitting U.S., highlight in Locker our and

elite most with technologies geometry, refine that ] develop products [ brands the the incorporating achieve foam athletes. enable as the designed compelling XX advanced of from The introduction the This and HOKA athletes, feedback the all sits results. plate the to brand's of morning, all-new Cielo assortment to compounds continues for announced ultimate to insights product enable front, HOKA HOKA their shoe most Cielo atop athletes that [ race day discerning roster the goals. ] assortment XX performance On the and and of record-setting kinds of a was

Roll for was ] elite as has wearing member, XX Rock now Jose it the XX qualifying available, Marathon Half San [ commercially already Before [ debut trial Marathon the XXXX the Cielo won its podium her & even has for an HOKA ] Olympics Kelyn Cielo made Team the Taylor, USA.

HOKA Running, logical join highlighting on experience instantly, partnering Clifton unexpected products. an comfort a Pinnacle by running the the products designed down in co-create to a apparel Transport together brands partnership French shoe the lifestyle-oriented occasions. of feature product, Satisfied the is performance expected the captivating brands. wear exciting with wearing highs trail and community to HOKA brand's sellers. sprint in They shoe versatile performance for collaborations reach brand's with XX consumer. the best brand Satisfied everyday HOKA Most exciting experiencing aesthetic take running same Beyond within top with and new audience with furthering of partnered also casual success our one-of-a-kind bought the LS, Francisco. a communities These HOKA become an HOKA out The yet are hills its skateboard, created from quality a recently, the to are sold new brand's almost that also steep San go-to the now the more sitting lows has resonance theme and lifestyle brought which package

is building hike performance a while products As our consumer with in for the player and and experience top brand running, with HOKA the lifestyle to to focus off-road innovative become rooted the the term, brand disruptive footwear, trail continue remain in road performance. expanding HOKA we bring long dominant keeping a

journey markets, with While we and across of this stages are we domestic powerful opportunities international global at see significant brand. this ahead different

another set the to achieving and fruit is stage to year and have price continue finish the proud strong sell-through to drive are efforts a world, with consistent build around of awareness HOKA full the high for brand our the We momentum quarter. record bear

Now moving to our discussion performance. channel of consolidated

remained strong DTC wholesale. across performance the quarter, During both third and

XX% UGG and revenue, across versus DTC last and DTC's across increasing XX% from XX% the and respectively. to year. a XX% with XX% Regions quarter's in brands to of respectively, year record remained success and line up and all the brands. DTC domestic consumers XX%, DTC our HOKA prior XX% respectively, increasing with objectives, retained acquired and represent XX%, increasing the broad-based with fastest-growing continues be channel and and with XX%, international in strategic increasing However,

In are addition, mix the provide we and X% the carries exchange price discussed, increased continue UGG with currency Furthering of greater UGG majority strong in-store, favorable we portfolio. versus and select with last to to wholesale third from increases contributing including HOKA selling, ASP highest through reflecting which online of in the HOKA, respect of foreign experience. operations third rates. and experiencing price performance, revenue in year, of success brands, consolidated the Higher quarter also as benefits dollar engagement both double-digit consistent DTC, incremental our the increase quarter, selling our With domestic a volume. full-price the by consumer the the omnichannel quality and ability to see driven a a average

this pleased management very especially strong been on during we wholesale focused year. fiscal are result, this We tight executing marketplace with have considering the

year Steve of high our the that price XXXX result for to to over with XXXX gains performance our quarter everyone. drove provide of hand and more brands third efforts, created opportunities And specifics I'll entering on market now inventories guidance. going have a lean sell-through, fiscal call forward. Thanks, these full calendar channel update As to an share levels

and everyone. Dave, afternoon, good Thanks,

our continued performance of quarter demonstrated and strength exceeded third Our brands. expectations the

well consumers quarter led the exceptional meet in [ by continued able HOKA shipments channel expedited all of quarter as demand high strong phenomenal to mentioned, innovative product of globally, with DTC offerings brand marketplace, performance. exceptional our most ] the the at through were the and in levels price drive our the popular the to growth, Dave brands consumers UGG results are of another delivered testament with helping manage as season we for wholesale solid sell-through. incremental DTC a These compelling and drove styles. to to we quarter demand diligently our brand's holiday to during As resonate full globally the continue and growth heat beyond, capture continue while driving

profile execute driving approach over our to commitment our delivers the us keeping while term. a to strategy operating have success robust enable disciplined Our achieve positioned that and long continued and company financial to strong brands to results

Now let's the get performance. financial to third of quarter the specifics

Third quarter. consumer in continued last ecosystem across versus consumer in up the was HOKA broad-based Notably, which across the versus of period versus was year. a channel, which billion revenue access was the delivering in strength to constant XXXX the XX% representing quarter points XX% of DTC strong last double-digit acquisition, global last an demand versus DTC increase versus with XX% On fiscal XX% in revenue UGG the as currency primarily billion, year. quarter Growth year, grew by last exhibiting growth in $X.XX year which XX% percentage driven $X.XX by aided revenue revenue and increases growth basis, the robust up contributing was regions HOKA's retention, XX% and particular increased regions increasing the remains DTC channels, DTC heat quarter brand's for total with global of was million all $XXX brand with a of and prior performance year.

was would to selling quarter's by unit I outpacing Additionally, revenue percentage aided note dollar growth. brand of growth UGG this price as which both of that a higher increases, full-price select well the growth as contributed

the for of increased larger-than-expected due season our points impact dynamic, brands which for always don't price for the basis is peak increases to one repeat. for XX%. catalyst manage the selling, full This was UGG deliver the year, is will to from and Gross growth. expect always styles margins year's our levels the price will with XXX full from was its we with strength we of last intent a XX.X%, year performance experienced level from affected combined particularly we this part of up While expectations high quarter

and year, margin continuing brand grow with last foreign favorable mix, gross price and channel pricing and from higher wholesale, in select mix faster product favorable benefited to full favorable compared of to action the As than quarter exchange rates. savings, mix freight DTC currency UGG selling,

While quarter the to anticipate seen remarkable outsized levels we of the degree. is margin not expansion and repeat mindful proud remain these same will are that we above something we this normalized results, exceptionally it's

see normalized levels to in benefits exchange continue anticipate pricing was X actions repeat last in our do deliver on now may third rate for through low opportunities considerable strategies, the are UGG million. such as year's major versus we brands, million, While as that items freight extremely currency of up promotional activity environment SG&A the to achieved spend $XXX low we XX% potential our quarter as top-tier a profitability very well from that not the include other foreign factors macroeconomic $XXX and costs rise key fluctuations. dollar

As primarily percent of year, to within SG&A organization revenue, functions our points and last spend. was higher investment support marketing key higher in basis growing due talent a to than XXX

is with share was to lower results, diluted combined diluted These XX.X%, rate $XX.XX tax Our a which per representing favorable relative interest earnings XX.X%. of than year's which count lower and year EPS $XX.XX XX%. per compares income record of last share, share to last last year's earnings growth drove

period, keep a of below same On incremental impact million, reflects of heading our year, up fiscal we into we could to sheet. down to in And sales the that see captured size inventory At in now the third balance that our note had already next quarter inventory with levels I'd ended year. position operating in billion to XX% Turning just are have Inventory strong have has the $X.XX point the fourth of December XXXX, with the which time and borrowings. no equivalents. selling quarter small growth. the seen versus last Today's was for during cash $XXX year, normal specifically, on this with XX, outstanding upside inventory levels And we the expect organization. quarter. this completed, we current been that investment we

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

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

versus that approximately up previous on full our growth experienced updated growth This year digits the fulfilled our fourth third of the expectation sell-through expectations driving now the guidance our $X.XXX digits. year. management. mid-single quarter, we from year year DTC disciplined full third growth This approximately billion. reflecting our is demand guidance into demand in a $X.XX to UGG our equates the XXXX. Based of billion, expect for revenue moving Now we with strong XX% of XX%, of up strong brand quarter low prior experienced now fiscal From increasing strong marketplace refill be year upside of we the increase perspective, from to quarter, last third double the result in approximately are guidance approximately in quarter. year revenue of Full and increase wholesale revenue full HOKA

year fiscal revenue our updated approximately now be XXXX margin to addition In to outlook, gross XX.X%. is expected

from of including levels contributing Key full SG&A part demand. continued As the heat expected gives believe percentage XX.X% expectations to identified to which UGG opportunity Styles is additional price have accelerate future. this experienced growth top-of-funnel for current foundation strong drive as setting to selling, of their the margin as our incremental represents in approximately strength, a spend year XXXX. We opportunities, QX brand revenue spend, defend areas fiscal positions increases brands sales high with the we now of price marketing as to of for be exceeding

the that that some moved unrealized expect gains of timing third recently QX I spending recorded and direction. be in in note in offset dynamics Additionally, have fourth to as opposite the rates related FX we quarter QX would will

in operating improvement With gross it margin now be approximately our these for are experienced. updates, and we the increasing XX%, the margin year to expect reflecting

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

line Styles quarter to closeouts U.S. the foreign to deterioration fourth projected high while currency in to we but of the rate. This group the We been Additionally, fourth is We, the to, that shipments in that Meaningful profitability year year note dynamics per end share and fiscal disruptions our our meaningful exchange no are our pressures, year. range. chain levels in earnings selling, last consumer even we current delivering wholesale of on not year and of on business deliver in that top inventory remain the assumes inflationary fourth which future but of UGG guidance of Decker's our supply would changes represents and top low we and prior $X.XX year seeing round update course, of fourth dedicated also exceptional the include, in uncertainties, top expect from the confidence tier tensions, revenue invest years, pressures, that and quarter this growth, some are Based and not limited success of profitability. have mid-teens fluctuations to future driving have there to this delivering levels a now the business recessionary guidance on historically increase operating least that among Key out organization this a that we're benefit revenue risks are profitability diluted will operating a third we've enable levels guidance outsized repeat at out of strong repeat our growth. full peer that went including would year tail related of strong this highlight, quarter still end continue high few the that to like to in sell-through with to not price operating of quarter. seen consistently at occurred may geopolitical consecutive as

through than to expansion to term. in said if flow may related faster near ability keep we've the pace comes revenue with profit some the the line bottom our As of past, investments, growth

a for recognize brands. initiatives continue the of maintain our into we to our vision the and importance next strategic on moving focus funding year long-term However,

to final approach fiscal in fiscal We our we will continue enter disciplined as next begin our be for planning and year. quarter

of well our look and success to year-end healthiest drive forward future back diligent now positioned Thanks, our operating and Dave in the his a demand providing are hand we robust I'll final and industry. approach, to everyone. our for largest And most X Our remarks. sheet With to balance in on call. call are the brands more details

Thanks, Steve.

which and year-to-date record are We our revenue earnings produced brand's results. performance, have proud extremely of

Thinking position As as further, both years, believe in into brands, believe HOKA innovation I expansion HOKA an with remains product we UGG next of incredibly few opportunity growth. we for awareness and this XXXX, increases our the the region management, continuing brand year's across ability we strategy omnichannel through hybrids heritage flexible model of UGG long-term continues on for force while operating focused and global development continue be performance strong brand's our and primary vehicle innovative upon confidence build the behind on growth driving category success. We considerable growth executing have value. category deliver look driving beyond with profitability and our and Decker's high pipeline of further levels for fiscal year resonate the to giving remain that codes to our to exceptional the consumers us objectives celebrate sustained against markets. target to to strategic shareholder focus marketplace

with and driving aligned Additionally, our to across employees thank consistent and their long-term the results focus all recognize I'd to vision. our for strategic dedicated of like organization

go and upholding to Our while employees above continue values. Decker's beyond

few want words. a to turn Q&A, to moment a give we Stefano? Before to say Stefano I

good kind named afternoon, Dave, for to and been the is CEO. privilege you It next have a everyone. Deckers thank introduction,

around people here, our Deckers. competitive our and tenure all and appreciate people, made advantage Deckers where the at a I world. effort team many management my well we opportunities ahead our positioned get it of our building today. highly success. immense brands I organization understand and the of through significant with the is I'm I support innovative had the collective to are about take to believe continue passionate taken the and beautiful Deckers, continuation that us marketplace resonate as cutting and dedicated of we've the have has and strides During good to with grow the chance with consumers

next mentor, Over you. working to smooth executing Thanks, Back ensure a great look strategy and I Dave, has who to X continue months, friend on forward and Dave. with transition. a become the to colleague our

as Decker's to call for and continue us thank next exciting Stefano, over turn the We you, look to Thanks, Operator? the I'll for forward future. on call everyone, sharing the build that, With to operator today. we joining quarter Q&A. towards more

of [Operator from Wedbush Tom Nikic Instructions] Your first the from question comes Securities. line

Dave, with on run great forward a Stefano to working you. congratulations looking and

quarter. that specifically door and look, it just Locker, Decks how of on appreciated? Is I a kind of to the sounds be products? of you're unpack greatly with fourth HOKA wholesale drivers would the guess, levels it HOKA, being in I So embedding new inventory kind the the like about expansion of that just lean? sell-in if a wholesale, Foot little could think of it reacceleration, Is bit in so channel really Is

a spring. then have at strategy. question. a my that to very at before, orders as as happy QX that And quarter of of as launches globally. all, in demand. will really right yes, a a level into is I And for things. stock the going HOKA execute fulfilling on refill we great plan, little teams getting Yes, moment. back to But a The head the right continue rough. QX, on we planned. HOKA we and that product There's results first as And answer a of exciting we some Been lot hoping apologize, coming voice fighting it's had as in that cold out well mentioned are QX, combination be wholesale into new you're

So this at very new and HOKA continue very momentum ahead. net sells evaluate to on QX how strong solid for through. of doors. looking be No And the strategy. We'll optimistic executing quarter performs how new no we're us. pleased is that the continue end year, about based and on market the to the doors

noncore just year? if follow I a couple great just seasons on do one And a What you've good. you holiday had Sounds in for do UGG. next Obviously, up also could row. of

a right? bit listen, But question, good UGG. a for a has new it's this Well, little been think era Yes. mean our volatile. I I history is

pipeline the an categories leadership well with is core performing the innovation to global consumers. our real. well inventory. with region, incredible light momentum is beyond every And We're every expanding is UGG-brand The have This We team. on the channel brand for sell-through we most exciting incredibly is right regard icon quarter our and new styles seen now. heat, UGG I've with global were ever global resonating

the of an lot levels, of that opportunity. have didn't there's down. this still real lot coming we strength lot but had still the us fall that think going increases this us. still a of the incredibly marketplace going out new course year. we're been introductions We as Lowmel, But especially inventory and slow with manage this a for pay incredible prioritize of some clean like to formula with of we the we have stay this there's a continues DTC Across Hybrids there be had. we're growth, tight healthy and with quarter and upside into for Weather we think icons were price women's, successful And And, a dividends to brand. We men's, the in there's major some in that position And marketplace. off demand to

Steve. And Tom. add that, to is Yes, this just to

in our works. had as management QX, is at that where the, the look think we I marketplace success we this

of where We are really work. this wholesale DTC the seeing that our And the is demand the, that containing lowing channel. over to power you're channel. some We're of

design. it expansion, model so margin going reinforce we're and we by next know we that's the see that year. to continue gross where table. And with demand the to need that's You a on And

that DTC to build flowing table. on demand controlling with that and the over distribution continue we brands excess some of by marketplace leaving So some at these into

line your of question the Vasilescu from next Pariba. And Laurent comes BNP from

best wanted the I Dave, future your endeavors. to for wish you

XX% maybe you'll resting like update? Stefano, target, I -- targets Steve, anything some a provide, then billion of out $X 'XX. that on heart for term. will to call. just And up There's EBIT over targets EBIT billion term? maybe wanted Dave, And be margin Is year for mix. margin you are term kind this Is long these You have follow there also by could you there follow the alluded long with many. to you the there missed rate up, fiscal that on of great right maybe want sometimes overearn to think business XX% on long to, to the -- some for $X you that DTC I there it's changes to I wanted that

Yes, Laurent. Good question.

to regards stress, strategy, [indiscernible] long-term that still on focused before. we've coming it's to think we are with up it's important about So particularly talked I what

sitting are continuing saying, to a momentum I that about Stefano happen. and change major that hey, have Stefano here helped the and create. more there's quite frankly, team So needs It's his

spoke the we not that strategy before, that a ranges there. to are we've think about But those targets It's the We hard in So talked target. get there's potential place. about. is

are brands We this, confidence time. to have, through our migrating that consumers, they're consumers, I us the over heat way brands And way building a more quarter more the especially of then to and DTC the where these and the these examples achievable. presenting we're we're targets more in for those this, and market gives business closer of think marketplace results quarterly managing our DTC just coming how represented great we're like the out connecting with

at get incredibly consumers into excited fold, same UGG continue, for remain we but as also more the time. So opportunity about will and that for the the we HOKA,

coming international markets and there. on So the confident after still, we're with to particularly we stay get course, the the lots strength of can now, get

of of we for the investments. spending take money, watch And when a we like some this and the in we just we where brands and I've like year, Laurent, seen where is in our sake see In to invest, prior above we we high-teen have are we're every said business. let will so that margin. kind way such we've spend about that of such the when the a margin this And that's as QX, we're on past not run where our will runs we we business through year, placing of to And Yes. talked that. through. money opportunity, then, when way margin at case that. a out where the the opportunities margins given year. full We're demand before carefully can some delivers we is business approach well the products flow selling on an operating is strong look calls. seeing we The have perfect And price did kind of in

we've that continue seen at to in it, well. competition we the because we're looking same time, stepping year our we outlook, our raised prior at But in is we've as where indicated as invest the in also You've know years. brands can where full up

we're we'll same business, an the So we that. well, run. that time, at and in health investments business are looking long of at right this this long-term to the of some But pass to forward the provides us continue opportunity we'll when through the make drive performing the

change that's you for approach. types So that's of us, these is how That's of and not to working results. can our going driving kind see

from like, order some a on Maybe then as the it's harder. just, guide about on getting UGG the follow-up next and I [ the could number? much this And be fall XQ. between you timing that question year's year, XX% next this going but, question Steve, shifts to to for business. that would are for any not book you And just I you're to for question indication going it's investors growth Steve, very oh, year, audience, alluded prepared oncore clear. Very Stefano, be XQ quantify back to UGG Dave, that helpful? think next for for Tom's ] we quarter, know

Yes.

start Laurent. I'll So

are overperformance orders. yes, some QX QX know, remarks wholesale did the in Where where slightly terms of I our deliveries that's seeing shifts, prepared we QX. we mentioned the we see haven't of is, some because, as of impacting guided of what In again, you in earlier the some

full full of really guidance, a reflection in our of I we have we year, a QX, terms haven't know we've given bit that's different. little that and seen year is maybe quarterly model In our because strength everybody's raised the

kind as so it. come we've way that is of sell-through say the did looked QX QX it how you're was hard happen the to business in of The at strong. it's looking may in thought we at at very And specifically some us

performed ]. Generally the expected. took seeing And and advantage what better has speaking, we of able we [ shift we kind what business is, you're were some of so of that than that, to

it our strong business in demand seeing QX we've performance year We takeaway We've And incredibly of flowed through year as for that lifted flowed incredible that full kind QX. think seen is little We full of we're have lift. is through. I in bit timing. with But our there. brands on a our and overall, the

up within Yes. be just as regards year confident. fall portfolio. growth we coming the experienced. we're a And We like now with Will XX% 'XX into UGG see it to digit, brand double of

very sell for selling our versions different planning call, that position iterations boots. to past. new the I We slippers, talked to distribution about sneakers. call. pretty a more in marketplace there's diversified much that, we been at be it Classic hybrid will selling used remind we're We And segmentation than had. consumer, and We're go younger in more short, to growth of but in this marketplace. primarily I still has was And a it's that. UGG think across sell the the similar And and few it's have the to be we diverse is UGG starting with different the globally. consumer, now. think important is And selling folks innovations, classic Classics, colors, in last to we're We're the slippers, a

pipeline potential and for our brand to years lot with continue drive going strength a in strength play this to this of the international growth have product to untapped markets, We to teams the we're a continue of the marketing of innovation to our come. as through and

question Sole comes the line Jay next of your And from UBS. from

be of sort helpful. versus to up II the where percentage your would of kind and couple last sneakers more and Can quarter, the couple newer How that the business of a if years? was of UGG. years today? of a And line was follow to sort give much Boots some of over of that the some really Classic ago? those sort different stuff, wanted sense us what product of the you That of comments the on of derivatives the, of that's I Dave, could things you you diversified in third compare Neumel made of kind about of that the some version is

will Yes. Core on really have exact but the Classics the at that, point. to this I maintain say I don't just are specifics business

the growth So Tazz, some purposely is are from category foray then, just noticed, it's performance those. of you programs. still Platform UGG some healthy. better like the we're shrink Those trying But not the product that is Style, the serious into products. managing and and as which Ultra I the Mini, said, the our the Xtreme, coming and first We're launched newness, like hybrid in that marketplace. to the winter of And sneaker versions we more

So, the right I this that brand marketplace. get has broad like a seeing, really innovative we in and always shoulders. product really is these And distinct that. that I've are there's DNA this nothing think we're once said really design the into now categories

lot a have of We runway.

a upside innovate, UGG there. with focused way. consumers continue to DNA And tremendous still in with and so assortment of to we're categories think continue product there's And connect these to going our segmented attack a I

brand. with So the UGG last to be confident

the pipeline, [indiscernible] to our and indication a at this this we're going to the team leadership of pace is as going has optimistic new well I continue as the healthy the an and is that brought discipline innovation think in marketplace, forward.

all Got emerged. years that do ago, we X today addressable the and sort the it the is would you've it to for a addressable this you doing you us think way. was market different of so what mainly fast category? boots, it's given okay, the have tell you're market And ask just just sneakers categories Hopefully, UGG. how you, that with where Can maybe but where it. total one, for what size UGG try if that about the total accomplished business was what, Understood. I'll different just

I'll let Steve question. that answer

where Clearly, Yes, market we Jay, it's a were grown X question. ago. the addressable has years good

cases kind UGG. Right? at another especially the it years way at is to use it, different being is, think, year I in last seen, than what's for know we've and is I UGG you're opportunities trying what growth I future of adopted what how this X to ago. for think get look was

seeing product. so market increase And greater to continues total that are our we addressable adoption around as

categories what that is we've in resonating Dave's consumers to But that, we're what adopting. iterations where seeing about created products excited heritage so in about are saw consumers. we point we're newness QX of And

the And about also so come strong into seeing brand younger ]. we're talked a with some the we've demographic routes And of a [ demographic excitement.

internationally. really it You've seen we're come DTC It's And QX. of that that performance. grow through what's then driving some seeing in

going about we faster is growing that last North the the can cases. talked recall, a at consumer dollars, success that brand. we're use international we're on in the of what the deliver that's brand years seeing grow embracing and ago, years, different about So And UGG you're international domestic. terms smaller couple seeing cases. across then see some shows to this excitement of how casualization, go as gives than X And America progress demand UGG, globe different we to continuing us rate, we those through at what And in is markets you what use and the a now but to percentage how were the that faster the albeit export And we've with markets. this you where for learned through is adoption of rate

are would thing brand, last you attached think the about had the in And quite past. say, ago, And and brand brand that Yes. a I those was I days Sigma some if think years that this that's, time. UGG boot for it X the we've

the it's for I start and years that and have some of sneaker taking the we to that share that Lowmel come really a be think bestseller We that's And about version I'm had resonating a brands in to categories before. from never of is products our sneaker, there. going potentially excited out different

your of from Janine line from question Stitcher comes BTIG. the And next

best to you And opportunities the HOKA. same it? Congrats it? maybe future on in elaborate you any the on then guess question broad price styles? for price I increases? When want terms take Dave did Yes, as take was about I big curious And And there? wish how the well. the for increase little it the How you and a on the results, all was pricing UGG--can bit. of

price? being at talked I that your pricing happy where as you've just about see do pretty but peers think potentially you any taking the there, is opportunities some look of

Janine, and question. great Thanks, Yes.

have prices we we have at We are, and been, continue to been and we'll strategically. look

of of some in really year so And made on our of just best this were best the proved a in to we handful UGG, styles but sellers. be decisions our really some sellers were

you a at perform a that's those of some price as added revenue made well or and they big the $X why So, impact so they saw exponential styles $XX, on on lot difference of units. of full

providing where fall. this We're be for do opportunities will if prices But And the evaluating and now. are that. the of HOKA. There's for continue still We're don't and prices not in product right pricing We through same growth more for massive to are market we'll approach do price selected broad-based We forward, strategy the that think will It's incredible see value we then ours. we dollar. roll raise style bit a our innovation. that, to but decisions. increases appropriately comfortable Going it. a is drive it the evaluate consumer, market by the continue pricing, little as to the here pricing out we there and

just that. a add And on Janine, Yes. bit little to

the to of increase very not it a units was board. that the significant. potential And identified was said, consumer absorb we that without It was resistance. Dave has much As surgical across price terms in

of lot And a on would so, It knew well. it Styles. was was that Styles we do not

Styles And so it sense was it drove and high-performing surgical in of big portion. a the those

just quantify at terms bit quarter, a in basis last our little the it So in was XXX year from points. to margin gross

full strong increases, other for a was big sell-through promotional. with was quarter we thing a contributor, price didn't that I us. price think the This get along

basis XXX in the it XXX experienced price and increases that that about not up came of points we So from being promotional the quarter.

looking future of very increases see price year will it. [indiscernible]. it from price drive driver be Dave this that not not We're big periods. was necessarily as how we that of But year X place to a continue to So going we're we that. the we how said, And kind we careful contemplate about to benefited increases and in to

color. Got the gross structural? And pricing there in margin, that as promotions of that the just [indiscernible] the it's basis a least some remains at future points to helpful the That's to terms portion XXX might in of normalizes it. of more assume fair kind be increases

Yes. Yes.

of from Sam Williams And comes from Poser your Trading. the line next question

we So have Erinn, Teva. already and UGG

Sanuk other question? because my So could you other give I And the all have just me you Teva, questions then give favorite and of it. I or wish

Sam. Sure,

HOKA as third So Teva $XX for for calc quarter, total $XXX $XXX the $X million. million other Sanuk million. and real distributor then mentioned, you UGG, million million. Koolaburra, quick can largely you is and $XX.X wholesale

Based Thank for you what happy before for, looks to you Totally beach there. seen well, I you, we're hope gets so of first very, sunset I I'm of Okay. you as if, all, it January, the on and we've it very sail Dave, congratulations. in into far out awesome believe the

I that. Sam. you, Thank appreciate

in are your lot sales going so that it I'm just for own to around whatever small a trying but are retail given people you a gearing like hits, your just of hearing are wholesale to more lot those can. are the they quarter fourth accounts a there's what's seeing on your pushing of get retailers lot We're orders DTC are, to York. UGG Like than getting, stores New usual, in that like getting of really

So yourself you're more? lot going feed to a

into more teams stores What some when our of allocating that say we're of few been wouldn't wholesale or gotten sales last not of of from by sucked I DTC inventory better DTC. inventory demand, away [indiscernible] I the we've wholesale say forcing for in. that we're up inventory in at the having not some And purposely this that would customer amount through the inventory missing the so in years, I kind gets right is, protected think fill-ins. the that have comes

across out our to it as we're than we're can we balancing wholesale just have retail protecting they we that sure the stores. making and like e-commerce how shop. for consumer And and and better best So for

there strong going is But running pull little their and bit a heat happened. happens, wholesale find pull does And this are well model an are it's DTC find inventory, go indication more. how momentum, working. a it. benefit that, if when help low to stores Just your so you also is have of though, this to on of it partners our of business kind they're our generally what that it a websites have to that's, indication we brand model And and to like

there heard And some it under I've as heard be color you [indiscernible]. And be the might that us they've a Deckers I retailers the fall. there? X you some of then be coming it going the, new over might was some thing on seen heard what from I Could and lastly, for may product sort hinted give Labs. from of to

Luke, exciting Well, for force that established years a Yes. our a say all the been ago who engine brands. Lab of for is I John co-founders of our one us. pipeline quietly few will with as it's HOKA, has Deckers for Innovation of We help this and of building the

you're So Teva there's HOKA we innovation And to kind some an uncover of of in sneaker in the that. UGG and as of well brand. is of things opportunity a see has for the one seeing soon new we'll and from come that some

a this So styling. sophisticated lot technologies Super where, It's for exciting. you comes find brand. running that pretty It's performance would really the category made Sneaker of we day put It's in would and a the under more it but with brand. of all

lines. more name cleaner and days. allowed the price let it's plates, above you We're A obviously, materials different and the market. different this into know So to excited modern point elevated I'll little and stay robust carbon the bit $XXX, foams, few early launch what you'll there. as head to. soon hear in into from a weeks, April then more and and But launch, next soft tuned March way as about build we'll in the I'm

from And question your from Baird. last of comes line Komp the Jonathan

The core those you styles, the to ], thoughts out? share retailer think any And are hearing, some recently more long-term on plan sustaining about attached. you potential Cielo In [ are without any UGG long-term time afternoon. could UGG. you X Stefano, maybe premium just thoughtfully expand then for on or The just Skyflow], [ Skyroad potentially different distribution? you highlighted frame while And think forum, new revenue share especially I leadership on in a UGG? still on the the for comments question relation specialty Dave, growing a Good the One to about how separately insights still HOKA, you feedback to bring on [ more you Dave opportunity any can ], eventually you thinking X what of products run in double

the going then the I'll first I'm come Yes, to let to HOKA Stefano answer question, question. back

Yes.

today CLX literally. we ], launched On launch the [

So look it's the they're it's I it's well early a to at bit say encouraging, results, days. how early quite but doing. on

growth is, the I than actually this that's think say, brand, digits, regarding to then this doubled marketplace some And smart for brand a the healthy listen, with doubling ever more Yes. still be think that UGG in and in point, saying but Does has way. I business don't a our remember potential at and this We some okay. line growing the managing that's we a effectively would brand at is see point. rate trend. mid-single growth we as

now, marketplace and in it X line potential strategically really a we start time methodically taking you little apparel year if strategy. to think more. if Anything our a engine optimize we I build possible. our at men's, with we're this building is and in bit But and right

could in XXXX? sneak more Steve. Just for one comments more if for accruals Any potentially year-over-year to the and that given or year incentive performance? XXXX, a I strong And it on what normal like how about in think look bonus just

Yes.

question. good So

clearly, in with accruing So increase resets we've back compensation. 'XX, to that an That the approved FY on for we going budget are performance performance-related levels. in got

clearly, So couple months seen so performance. dollars. expectations terms, on of not on the percentage But quantifying terms, percentage very we're far, left. a strong we've everything But given

that So 'XX. we there in is compensation then 'XX. And for in increase FY FY performance-related reset an

participating. you Thank This you. call. for concludes today's Thank

may You disconnect. all