Deckers Outdoor Corp (DECK, Financial), a global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories, announced its financial results for the second fiscal quarter ended September 30, 2023, on October 26, 2023. The company reported a 25% YoY increase in Q2 FY 2024 revenue, reaching a record $1.092 billion. Diluted earnings per share for the quarter rose 79% to $6.82.
Financial Performance Highlights
Deckers' Q2 FY 2024 net sales increased by 24.7% to $1.092 billion compared to $875.6 million in the same period last year. The company's Direct-to-Consumer (DTC) net sales rose by 38.8% to $331.7 million, while wholesale net sales increased by 19.4% to $760.2 million. Domestic net sales grew by 21.1% to $748.0 million, and international net sales increased by 33.3% to $343.9 million.
The company's gross margin for the quarter was 53.4%, up from 48.2% in the same period last year. Selling, general, and administrative (SG&A) expenses were $358.4 million, compared to $294.1 million in Q2 FY 2023. Operating income for the quarter was $224.6 million, up from $127.8 million in the same period last year.
Brand Performance
UGG® brand net sales increased 28.1% to $610.5 million, while HOKA® brand net sales rose 27.3% to $424.0 million. However, Teva® brand net sales decreased 28.4% to $21.5 million, and Sanuk® brand net sales fell 28.5% to $5.4 million. Other brands, primarily composed of Koolaburra®, saw a 7.2% increase in net sales to $30.6 million.
Balance Sheet and Capital Allocation
As of September 30, 2023, Deckers had cash and cash equivalents of $823.1 million, up from $419.3 million a year earlier. Inventories were $726.3 million, down from $925.0 million. The company had no outstanding borrowings. During the second fiscal quarter, the company repurchased approximately 347 thousand shares of its common stock for a total of $185.5 million.
Outlook for FY 2024
Deckers raised its FY 2024 revenue guidance to $4.025 billion. The company expects gross margin to be in the range of 52.5% to 53.0%, and SG&A expenses as a percentage of net sales to be in the range of 34.0% to 34.5%. Operating margin is expected to be approximately 18.5%, and diluted earnings per share are expected to be in the range of $22.90 to $23.25.
Explore the complete 8-K earnings release (here) from Deckers Outdoor Corp for further details.
