Deckers Shares Fall Despite Record Q1 Revenue and EPS Beat

Deckers Brands (NYSE: DECK) announced record first-quarter results that surpassed analyst expectations, yet its shares fell 3.4% in post-market trading. The footwear maker's strong performance, driven by its HOKA and UGG brands, was overshadowed by a full-year revenue forecast that failed to meet Wall Street's consensus.

Record Quarter Performance

For the first quarter, Deckers achieved a historic milestone, with revenue surpassing $1 billion for the first time in the company's history.

• Revenue: Reached $1.02 billion, a 5.7% increase year-over-year, matching market expectations.
• Earnings Per Share (EPS): Adjusted EPS came in at $0.94, beating the analyst consensus of $0.87.
• Gross Margin: Expanded by 60 basis points to 56.4%, indicating improved profitability.

Growth was primarily fueled by the HOKA brand, which saw net sales climb 7.7% to $703.5 million. The UGG brand also contributed with a 4.9% increase in sales to $278.0 million. Stefano Caroti, President and CEO, attributed the results to the "continued strength of HOKA and UGG, with growing global demand."

Guidance Weighs on Stock

Despite the strong quarterly results, the company's forward-looking guidance appeared to disappoint investors. Deckers raised its full-year adjusted EPS forecast to a range of $7.35 to $7.50, bringing the midpoint near the consensus estimate of $7.50.

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However, the company left its full-year revenue outlook unchanged at $5.86 billion to $5.91 billion. The midpoint of this range, $5.89 billion, falls just short of the analyst consensus of $5.91 billion. This slight miss in revenue expectations is the likely catalyst for the negative stock reaction.

Key Growth Drivers

Operationally, Deckers demonstrated strength in its direct-to-consumer and international channels, which outpaced overall growth.

• Direct-to-Consumer (DTC) sales grew by 13.0% to $352.8 million.
• International Sales rose 8.4% to $502.1 million, outpacing domestic growth of 3.2%.

These figures highlight the company's success in expanding its global reach and strengthening its relationship with customers, though for now, the market appears more focused on the conservative top-line forecast for the remainder of the fiscal year.