Net sales in Q3 FY25 grew 17.1% to $1.83bn, from $1.56bn recorded during the same quarter of the prior fiscal year, primarily driven by UGG and HOKA brand contributions.
Deckers Brands president and chief executive officer Stefano Caroti said: “UGG continued to experience incredible global momentum, with the brand’s iconic franchises capturing strong full price consumer demand across all regions. At the same time, HOKA delivered impressive results consistent with our strategy, remaining focused on scaling through innovative performance products.”
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Deckers Brands fiscal 2025 Q3 financial review
The company’s flagship UGG brand reported a net sales increase of 16.1%, amounting to $1.24bn in Q3 FY25, compared to $1.07bn during the same period last year.
The HOKA brand exhibited even more pronounced growth with a 23.7% rise in net sales to $530.9m compared with $429.3m in Q3 FY24.
However, not all brands performed uniformly; the Teva brand saw a decline in net sales by 6% to $24.1m, while other brands faced a more significant downturn with a 16.6% drop to $28m.
A primary contributor to the third quarter growth was also the direct-to-consumer (DTC) segment, which generated net sales of $1.01bn, indicating a 17.9% rise compared to the $858.1m achieved in Q3 FY24.
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By GlobalDataFurthermore, the company’s comparable net sales within the DTC channel increased by 18.3% over the quarter.
Wholesale net sales of Deckers Brands increased by 16.2% to reach $815.8m in Q3 FY25, up from $702.2m in the corresponding quarter of the previous year.
Regionally, the company observed varied outcomes across domestic and international markets for the quarter ending 31 December 2024. Domestic net sales advanced by 11.5%, totalling $1.17bn compared to $1.05bn in Q3 FY24.
Conversely, international net sales experienced a robust surge of 28.5%, climbing to $657.9m from $511.9m in the same timeframe last year.
In terms of profitability, Deckers Brands reported a net income of $456.73m for Q3 FY25, up from $389.91m in Q3 FY24. Its diluted earnings per share improved to $3.00 compared to $2.52 from the previous year’s quarter.
The company executed a six-for-one forward stock split of its common stock during the second fiscal quarter, impacting its per-share metrics positively.
The company’s operating income also demonstrated positive momentum, increasing to $567.27m compared to $487.89m in Q3 FY24.
Gross margin of Deckers Brands improved to 60.3% in Q3 FY25 from 58.7%. Selling, general, and administrative (SG&A) expenses rose significantly to $535.3m from $428.7m during the same period last year.
FY25 outlook
In response to the Q3 performance, Deckers Brands has revised its projections for fiscal 2025, estimating around $4.9bn in net sales.
The diluted earnings per share is expected to range between $5.75 and $5.80, while gross margin is anticipated to remain at or slightly exceed 57%.
Additionally, an operating margin of approximately 22% is projected, with SG&A expenses as a percentage of net sales expected to be around 35%.
Caroti added: “Our increased full-year revenue outlook calls for 15% growth, which would be our fifth consecutive year growing mid-teens or higher, complemented by our commitment to maintain top-tier levels of operating margin.”
