Deckers cleared $1bn of first-quarter revenue for the first time, and its net income fell 6.6 percent
Deckers Brands sold $1,019.5m of footwear, apparel and accessories in the three months to June 30, against $964.5m a year earlier, and says it is the first time first-quarter revenue has passed $1bn. Net income for the same quarter fell to $130.0m from $139.2m. Diluted earnings per share went the other way, rising a cent to $0.94. The arithmetic between those two facts is the share count, which fell to 138.6 million from 149.6 million after the company repurchased 3.3 million shares for $338.2m during the quarter, at an average of $103.79 apiece.
Both main brands grew. HOKA revenue rose 7.7 percent to $703.5m and UGG rose 4.9 percent to $278.0m, while the smaller brands fell 18.1 percent to $37.9m, a decline the company ties to phasing out standalone Koolaburra operations. Direct-to-consumer sales rose 13.0 percent to $352.8m, with comparable sales in that channel up 6.8 percent, against wholesale growth of 2.2 percent. International revenue rose 8.4 percent to $502.1m and domestic revenue rose 3.2 percent to $517.4m, leaving the two almost level for the quarter.
Costs are where the quarter turned. Gross margin improved to 56.4 percent from 55.8 percent, so the pressure was not in the cost of the product. Selling, general and administrative expenses rose to $419.9m from $372.6m, an increase of 12.7 percent against sales growth of 5.7 percent, and that gap is enough to account for the fall in operating income to $155.3m from $165.3m. Inventories stood at $807.6m, below the $849.4m of a year earlier but well above the $487.0m carried at the end of March, and the company reported no outstanding borrowings.
Cash fell to $1,602.6m from $1,907.2m at the end of March.
The full-year outlook moved up on margin rather than on volume. Deckers left expected fiscal 2027 net sales unchanged at $5.86bn to $5.91bn, still expects HOKA to grow by a low double-digit percentage and UGG by a mid single-digit percentage, and now expects gross margin slightly better than 56.5 percent and operating margin slightly better than 21.5 percent. Diluted earnings per share guidance rose five cents to a range of $7.35 to $7.50, which the company says assumes buying back shares worth roughly 80 percent of projected free cash flow. The outlook carries an explicit exclusion: it does not assume the collection of refunds for tariffs previously paid.
