Q1 2022 Deckers Outdoor Corp Earnings Call
[music].
Good afternoon, and thank you for standing by and welcome to the Deckers brands first quarter fiscal 'twenty 'twenty 2 earnings conference call.
At this time all participants are in a listen only mode. Following the presentation. We will conduct a question and answer session and instructions will be provided at that time for you to queue up for questions. If anyone has any difficulties hearing the conference call. Please press star zero for operator assistance at any time I would like to remind everyone that this.
This conference call is being recorded and I'll now turn the call over to air and cooler and Vice President of Investor Relations and corporate planning.
Hello, and thank you everyone for joining us today on the call is Dave powers, President and Chief Executive Officer, and Steve Fasching, Chief Financial Officer before we begin.
Begin I would like to remind everyone of the company's safe Harbor policy. Please note that certain statements made on this call are forward looking statements within the meaning of the federal securities laws, which are subject to considerable risks and uncertainties. These forward looking statements are intended to qualify for the safe Harbor from liability established by the private Securities Litigation Reform.
And 1995.
All statements made on this call today other than statements of historical fact are forward looking statements and include statements regarding changes in consumer behavior and strength of our brands and demand for our products changes to our product allocation and segmentation and distribution strategies changes to our marketing plans and strategies change.
And our capital allocation strategies the impact of the COVID-19 pandemic on our business, our anticipated revenues brand performance and product mix gross margins expenses and liquidity position and our potential repurchase of shares.
And we're looking statements made on this call represent management's current expectations and are based.
On information available at the time such statements are made.
And looking statements involve numerous known and unknown risks uncertainties and other factors that may cause our actual results to differ materially from any results predicted assumed or implied by the forward looking statements.
The company has explained some of these risks and uncertainties and its S.
<unk> filings, including and the risk factors section of its annual report on form 10-K, and quarterly reports on form 10-Q, except as required by law or the listing rules of the New York Stock Exchange the company expressly disclaims any intent or obligation to update any forward looking statements.
With that I'll now turn it over to Dave.
Thanks, Erin and good afternoon, everyone and thank you for joining us today <unk>.
And we're excited to discuss a strong start to fiscal year 2022 for a portfolio of category leading brands.
First quarter revenue increased 78% versus last year to $505 million grew.
Gross margin increased 130 basis points to 50.
1, 6% and we delivered a profitable June ended quarter with earnings per share of $1.71, while unique marketplace dynamics contributed to this result, we believe the growing influence of HOKA was it's more evenly spread seasonal volumes will continue to drive our organization towards a more balanced business across quarters.
Performing.
Performance in the first quarter was driven by global wholesale growth of the HOKA and Teva brands, whose compelling products are continuing to build market share and overcome the disruption and the channel that began during the pandemic.
The direct to consumer growth and HOKA as the brand continues to build awareness through digital marketing introduced innovative products and category.
Structures that drive new consumer acquisition.
And deliver a consistent consumer experience for online replenishment.
Additionally, our brands are benefiting from strategic marketplace management globally, which continues to drive high rates of full price selling across our entire portfolio of brands.
This quarter represents further.
Corey just toward our long term strategies, which include accelerating consumer adoption of the HOKA brand globally to build the brand's revenue to $1 billion and beyond.
Building <unk> as every year round global lifestyle brand through our diverse product offering and.
And executing a digital first approach by prioritizing direct to consumer acquisition online.
Progress and working towards a direct business that will represent 50% of total revenue for the company over time.
While we remain firmly committed to these strategies over the long term. It is important to recognize certain aspects unique to fiscal 2020.2 related to lapping the pandemic, which is still having varying effects and different locations.
Specific to the quarter, just completed we experienced higher wholesale shipment volumes as well as earlier shipments as compared to the prior year.
The earlier shipments primarily relate to replenishment of depleted UGG wholesale account inventories that resulted from exceptionally high levels of sell through during fiscal 2020.1.
These earlier shipments.
Combined with strong demand for spring and summer products across our entire portfolio of brands drove a significant increase and our wholesale business.
Given the momentum of our brands and their respective market share opportunities. We are focused on meeting consumers, where they want to shop to optimize growth and is less and certain marketplace.
But remain committed to driving direct to consumer demand over the longer term.
Steve will provide more detail around the unique dynamics, we are anticipating for the balance of this year later in the call for now I will share more detail around first quarter brand and channel level performance and some context for the remainder of fiscal 2020.2.
Starting with the brand highlights.
Global first quarter revenue increased 71% versus last year to $213 million.
Performance was driven by strength and domestic and international wholesale is the brand lab disrupted and last year's spring season, and refill depleted domestic inventory that resulted from record sell through and the prior season.
Growth of international DTC as Doug benefited from localized marketing investments to reignite the brand in Europe, and China, which was partially offset by softness and domestic D. T C, resulting from the decline of extraordinary slipper growth unique to last year's stay at home orders.
The strength of global wholesale resulted from the brand's marketplace.
<unk> management strategies that left us with unusually lean inventories entering the year. This positions us to accelerate some would be false shipments, helping avoid anticipated bottlenecks and the supply chain and providing the brand with an opportunity to meet in store consumer demand.
We saw this strategy play out effectively as online traffic for Agua predict.
Predictably lower than last year's exceptionally high levels, while sell through a physical retail was strong.
With a highly fluid consumer environment, we're managing our omni channel business to ensure <unk> has a meaningful presence where the brands target consumers and tend to spend however.
However, we continue to closely manage our product allocation and segmentation strategies.
And to ensure of maintain healthy levels of full price sell through.
Oh and continues to see high levels of consumer demand as the brand maintained positive mind share with 18 to 34 year olds and the U S occur.
According to Yougov brand consideration among women and this group remained roughly flat to last year's record highs and among men UGG brand.
Attrition is at an all time high.
These new levels of consideration among men are leading to the growth of augment continuing to outpace that of the total brand.
Helping to drive more consumer love and connection for the brand hug recently held its fifth annual proud from event and partnership with the Pacific Pride Foundation.
This event is and inclusive.
<unk> for 1 to connect with logo LGBTQ I E plus and Allied youth from Santa Barbara and surrounding coastal communities that celebrates identity and love. This year's event featured friends of the UGG brand and that included musical artist Little Nasdaq's and actress Harry Neff.
Further on the brand building front against continued to engage.
Consider brands and designers to create powerful product collaborations that elevate the brand fashion credibility and perception among consumers.
In June 1 teamed up with the same fashion designer telephone Clemens namesake brand tell far to release, the first of multiple product collaborations.
The first product dropped sold out on <unk> Dot com.
Gauge with few hours, but more importantly garnered positive press for the brand, which included features and leading fashion publications.
We are excited to once again collaborate with this exciting designer as we unveiled the second <unk> Telsar product drop in September which will include more footwear and apparel items.
From an international perspective, we.
We've been pleased with the progress in Europe, and Asia Pacific as the brand is building a younger audience through greater acceptance of the UGG brand's diverse product line.
We are gaining confidence and the UGG brand's turnaround and based on continued positive response from consumers in both regions during.
During the first quarter, DDC acquisition, and Europe, and in the Asia Pacific region more than doubled preterm.
Pandemic first quarter levels.
And these new consumers are purchasing products, such as fluff sandals and sneakers.
With the strong sell through August experiencing within wholesale accounts growth and our international DTC business and exciting spring product innovations to come August well positioned for continued progress and the spring and summer season next.
Year looking ahead to the balance of this fiscal year, we expect to continue experiencing elevated levels of global wholesale demand as we replenish domestic inventories and reignite the brand in Europe, and China maintained positive momentum with younger consumers around the world and work to convert a higher percentage of consumers to repeat purchases across categories.
Accelerate international DTC demand by showcasing the brand has diversified product offerings through localized marketing tactics and.
And mitigate pressures related to lapping heritage slipper demands and the U S.
Overall, we feel very positive about the UGG brand start to this year and the teams are working hard to acquire new and repeat consumers around the world.
With bold and exciting products that provide the luxurious feeling a bug.
Moving to Hooker global revenue for the first quarter increased 95% versus last year to $213 million.
This quarter represented a significant milestone for Deckers and HOKA as the brand's revenue slightly surpassed that of our.
For the first time and the company's history and.
And has become standard for HOKA growth was balanced across the brands ecosystem of access points with all regions and channels of distribution experiencing impressive growth.
It continues to build its consumer base through a combination of disruptive product innovation emotionally connected inclusive marketing.
And a consistent consumer experience based on the premium quality of the brands products and distribution partners.
Helping to drive the HOKA growth during the quarter the brand launch and update to its flagship Clifton franchise with the introduction of the Clifton 8.
This eighth generation Clifton features the brands all new innovative ultra light mid cell phone, which.
And is designed to offer maximum cushion with and energetic response to each step.
Consumers have enthusiastically embraced this franchise update making the Clifton Nate a top 5 style for hooker dot com despite only launching in June.
Search interest for HOKA and the U S continues to expand as the brand experienced a 69% increase.
<unk> versus last year's first quarter, according to Google trends.
And the Clifton 8 launch helped boost traffic to hook, a dot com during the quarter and on top of that HOKA continues to build awareness with new consumers through targeted digital marketing.
During Q1, 72% of online traffic was from consumers, who had not previously shopped and the Hooker web.
Site, we have been encouraged by the loyalty of consumers, who buy HOKA online during Q1, the number of consumers who purchase toga 2 more times increased 46% versus the prior year.
These repeat purchases HOKA is expanding closet share with existing consumers as the brand is seeing adoption across multiple categories.
And to help achieve this.
The whole <unk> team is building innovative products and trail hike and fitness categories.
At the beginning of July HOKA launched a brand new hiking silhouette known as the inner Capa, which is available in low and mid height. We were excited about the launch of this franchise, which is intended to build market share and the hiking category and attract new consumers to the HOKA brand.
And this hiking boot features recycled materials waterproof construction and a VEBA and Mega grip outsold, but most importantly is built with lightweight HOKA technology to feel like a sneaker.
Coinciding with an a cap of launch Hooker has teamed up with nonprofit organizations sold track to encourage outdoor exploration by participating in the HOKA.
Gold sold track hike challenge on the stride application.
Virtual consumer touch points like the Strava challenge had been great avenues to connect with consumers globally. We've been excited about the return of in person events over the last few months.
And June HOKA was the title sponsor of the Western States endurance run.
Which is the world's oldest.
And at 100 mile Trail race this.
And this event was the first trail ultra marathon to be covered by a live stream telecast with over 30 hours of coverage from start to finish and congratulations to Hooker athlete, Jim Walmsley, who are the brands Evo Steego trail shoe and adventure bucket hat to win the Western States event for the third consecutive year to.
The HOKA.
This 1 approach to product marketing and distribution has been highly effective and building consumer awareness and and affinity for the brand.
With the brand rooted and performance running we continued to see higher awareness among those consumers, but recently the growth of total consumers aware of HOKA has outpaced increases and awareness among runners according to our.
Catenary HOKA brand tracking data.
We view this as an important positive step and the evolution of HOKA and expanding the brand's addressable audience.
For the balance of this year, we anticipate HOKA growth will continue at an impressive rate.
And though lower than the quarter, just experienced driven by new consumer acquisition as the brand expands globally.
Terrorists, including a key market focus and Germany, the U K and China.
Innovative product updates and increased category adoption from consumers.
Market share gains with wholesale partners across the globe Greater global brand presence through in person event sponsorship and higher frequency product drops to maintain excitement with loyal.
And well aware and as we continue to scale HOKA. We are building the right team for the brand's long term future success. As you may have seen in our press release not long ago. The brand has hired 2 key footwear design and apparel team members intended to enhance the evolution of HOKA over the next 3 to 5 years.
Shifting to Teva global revenue and the first quarter increased 66.
6% versus last year to $58 million.
What is truly impressive about the standout quarter from Teva as the brand's growth and both fashion with its heritage Universal franchise and function with a more rugged hurricane franchise.
Strength and Hurricane franchise, we feel has been driven by the brands roots and the Grand Canyon as National.
[noise] tumors and has seen a record attendance this year from a DTC perspective, Teva delivered solid growth on top of last year's extraordinary increase as compared to last year's first quarter, where teva more than doubled consumer acquisition. The brand maintained a similar number of acquired consumers. This year increased retained consumers by 41% and saw a.
Parks and increase in average order value among online purchasers and.
Additionally growth of 18 to 34 year old consumers continued to outpace total consumer growth leading to younger consumers maintaining the largest mix among all age groups for Teva.
For the balance of this year Teva is expected to build market share with closed toe products such as the brand's amber.
10, precise and increased DTC consumer acquisition and continue to grow the already high percentage of loyalty among 18 to 34 year olds.
With respect to channel performance in Q1 global wholesale revenue increased 140% as compared to last year.
Wholesale growth was unique this quarter as a result of disruption and the channel last year.
Refilling domestic log inventories that were depleted from record product sell through and shipping and product earlier than in prior years and order to mitigate macro supply chain pressures.
And as a result hug wholesale is up significantly relative to the past couple of years HOKA also experienced meaningful growth as our brand is building market share and benefiting from the.
<unk> launch.
From a direct to consumer standpoint, global revenue increased 15% versus last year's first quarter.
<unk> drove the majority of DTC growth as the UGG brand was pressured by exceptional demand last year that resulted from the stay at home orders benefiting online sales and the slipper category.
Because of the pandemic.
<unk> disruption of both 1 and wholesale physical retail locations last year, we experienced a significant increase and DTC mix during the first quarter and fiscal year 'twenty 1.
Given physical store reopening and shifting consumer shopping patterns, we saw a decline of DTC penetration this quarter as compared to last year, but had been pleased to maintain D.
Clifton and mix above pre pandemic levels.
Longer term, our focus remains on building DTC towards representing approximately 50% of our total business.
Before I hand off the call to Steve I wanted to take a moment to highlight some of our brands recent activities on our sustainability ESG and D I front.
D C, which we believe they are having a positive impact on consumers' passion for our brands and the culture at the company.
Over the past few months, our Deckers gives program provided meaningful donations as nominated by our employees and community to 10 nonprofit organizations championing racial and social justice.
We are in.
And the diversity of hiring with 49% of new hires over the past year coming from bypass communities.
<unk> received the 2020 vendor partner of the year Award from Rei and recognition of the brand's performance and commitment to doing business and the right way and our employees are close to finishing our first ever plastic free July.
<unk> competition, which aims to reduce the abuse of single use plastics here.
Here and Deckers, we have a philosophy known as do good and do great, which is a core value that drives and inspires our company and our people to make a positive impact our progress and the ESG and D. I States exemplifies this philosophy and our journey continues.
Improve with that I'll hand, the call over to Steve to provide further details and our first quarter financial results as well as our updated outlook on fiscal year 2022, Steve.
Thanks, Dave and good afternoon, everyone as Dave just covered fiscal 2020.2 is off to a great start and we are proud to have delivered our most profitable.
<unk> first quarter ever and our long term strategies continued to serve US well we are in an advantageous position with 2 of the most in demand brand and the workspace and considerable opportunity ahead for our brands, while our strategies have helped propel performance, we recognize the existence of unique circumstances.
News have and some cases benefited results and and others put pressure on our brands.
Through it all we remain confident and the strength of our brands are solid operating foundation and ability to remain flexible and nimble and a dynamic marketplace first.
<unk> first quarter fiscal 2020.2 revenue came in at $505 million.
Net representing an increase of 78% versus the prior year performance and the quarter aligns with our set up for the year and discussed on our last earnings call with shipping more product earlier. This year as we look to mitigate exposure to supply chain challenges and get product into the marketplace.
Q1 growth versus.
The prior year was driven by the HOKA and Teva brand and for the first time HOKA contributed the largest share of revenue and a quarter at $213 million and increase of 95 per cent.
Increased 71% over the prior year to $213 million with global wholesale.
Sales and international DTC growth offsetting a difficult domestic DTC comparison.
And Teva increased 66% over the prior year to $58 million based on the strength of domestic wholesale.
Across our entire portfolio of brands wholesale was the primary driver of growth increasing 1.
<unk> 40 per cent over last year in part due to unique marketplace dynamics, which include lapping disruption and the channel last year refilling depleted channel inventories for the domestic UGG accounts and shipping of product earlier than in the prior year to mitigate ongoing macro supply chain pressure and ensure.
And we have product well positioned and the marketplace.
Irrespective of these unique dynamics specific to the pandemic our brands are resonating well with consumers and we are aggressively pursuing market share where we see opportunity.
Gross margins for the quarter were up 130 basis points over last year to 51.
100% the increase was related to favorable brand and product mix and HOKA increased as a percentage of the total company and 1 benefited from earlier wholesale shipments of fall product a reduction in reserves related to uncertainty and the prior year and favorable foreign currency exchange rates with offsets from channel.
6 brand and greater utilization of airfreight.
SG&A dollar spend for the quarter was $199 million up 32% from last year's $150 million.
Higher spend was primarily driven by increased compensation related to higher warehouse wages, including hazard pay onboard.
Onboarding additional talent to scale, the organization and long term incentive performance compensation, reflecting non cash expense.
Also increased marketing to maintain momentum and our brands and reignite international markets for the UGG brand.
Increased variable warehouse logistics and it costs with savings related to <unk>.
Low mix and and bad debt.
Our tax rate for the quarter was 21, 9%, which compares to 1 and 2% benefit on last year's pre tax loss.
This all resulted in diluted earnings per share of $1.71 per the corner, which compares to a basic loss per share of 28 in Q1 of <unk>.
Fiscal year 'twenty 1.
The nearly $2 increase as compared to last year was driven by revenue growth and HOKA and.
And Teva and the related favorable mix of brand and product SG&A leverage as revenue growth exceeded expense growth with offsets from channel mix favoring wholesale and tax.
Axes on net income this year as compared to last year's loss.
Turning to our balance sheet at June 30th 2021, we ended June with $957 million of cash and equivalents.
Inventory was $458 million up 5% from $435 million at the same time last.
Last year, and we had no outstanding borrowings.
During the first quarter, we repurchased approximately $82 million worth of shares at an average price of $329 and 55.
As of June 30th 2021 the company had $728 million remaining under its stock repurchase.
Purchase authorization.
Moving to our outlook for fiscal year, 2020..2 we are raising our guidance to reflect further strength and the HOKA and Teva brands and adjusting our gross margin and operating expense assumptions based on the latest available information.
For the full fiscal year, 2020.2 we know.
Correct, a year over year topline growth of 18% to 20%, resulting in revenue in the range of 3.01 billion to 3.06 billion with HOKA, increasing its growth rate over last year to be and the 50% range crossing the 815 million dollar milestone.
<unk> still growing and the high single digit to low double digit range Teva now growing and the high teens range Culebra still growing and the low double digit range and Sanofi is still expected to be approximately flat to last year.
Gross margin is now expected to be slightly below 53%.
Now, it's lower than our prior guidance due to pressures from increasing costs related to ocean containers and greater utilization of airframe.
SG&A is now expected to be approximately 35% of revenue, reflecting a similar dollar spend as reflected in our prior guidance on increased revenue estimates.
Which similar to commentary from our year end call, we expect SG&A spend to ramp throughout the year.
And the lowered ratio of spend to revenue is related to expected delays and the pace of hiring as the labor market remains highly competitive and more efficient variable marketing spend and fueling demand for our brands and.
We.
And these adjustments will help offset higher than expected logistics costs that are pressuring gross margins, allowing us to maintain our prior operating margin guidance of $17.5 per cent to 18%.
We still expect a tax rate of approximately 23%.
With these updates and the share repurchase.
Dissipate executed and the first quarter, we are raising our earnings per share guidance for fiscal year 2020 to now be and the range of $14 and 45.
$215.10.
As a reminder, during this fiscal year, we are thoughtfully investing to create the long term future and success of Deckers.
Purchase these foundational strategic investments include.
And in logistics capacity with another distribution center and the U S and larger facilities internationally.
Enhancing consumer experience on our e-commerce platform with increased personalization capabilities.
Improving planning and data analytics with new.
The to optimize logistics efficiencies and data insights.
Seating HOKA and reigniting, our brand heat and China through localized investments and bringing in new talent across the organization as we scale, enabling emerging opportunities with added capabilities.
And while disruption and the supply chain persists.
Persist across the industry, we are working hard to mitigate impacts on our brands, including working with factories to prioritize certain products to ensure timely marketplace entry.
Planning greater DC bypass and collaborating with wholesale partners to get product onto shelves more quickly.
Utilizing airfreight where necessary to make.
Tools and strategic product launches and.
And optimizing distribution center workflow to support peak season DTC shipments.
Well, we have tried to incorporate what we know at this point our full year guidance does not anticipate any further significant supply chain disruption excludes any charges that may.
Be considered onetime in nature and does not contemplate any impact from additional share repurchases.
Our teams have a great handle on what is under our control and we will remain nimble to react to this dynamic environment. Our brands are well positioned to deliver another fantastic year. Despite these challenging circumstances and I'd like.
And thank our employees for their tremendous work and dedication to delivering consistently exceptional results I'm excited for what lies ahead as we evolve our brands and business model to create the future of Deckers.
And thanks, everyone and I'll now hand, the call back to Dave for his final remarks.
Thanks, Steve as we just covered fiscal.
And 2022 is off to a great start and we are pleased with the results. We have delivered despite the macro challenges we are especially excited about the expanded consumer adoption, we are seeing across brands genders and categories within our entire portfolio.
There is a high degree of confidence and our organization about the strong demand our brands are.
<unk> and our teams are working hard to minimize any macro pandemic related challenges that persist and the current environment.
We are focused on our long term strategies to increase consumer awareness and adoption of the HOKA brand to build a multibillion dollar global performance brand overtime and.
And hence the year round adoption of UGG as a global life.
Brand with broad acceptance of the brands diverse product offering.
And driving consumers to our online ecosystem to increase our DTC mix to 50% of total company revenues overtime.
We are actively building, our workforce and making other key investments and the business to support these strategies now and for the future.
Thank.
To all of our stakeholders for your continued support.
With that I'll turn the call over to the operator for Q&A operator.
Thank you we will now begin the question and answer session to ask a question you May Press Star then 1 on your Touchtone phone.
If youre using a speakerphone please pick up your handset before pressing the keys.
Life style of all your question. Please press Star then 2.
And the interest of time, please limit yourself to 1 question and 1 follow up.
At this time, we will pause momentarily to assemble and roster.
Our first question comes from Jay sole from UBS. Please.
Please go ahead.
Great. Thank you so much I just wanted to ask you. If you can elaborate a little bit on the growth with HOKA can.
Can you just talk about you know within the North American market, how much of the growth has been with new products. How much has been the existing products. How much is new doors, how much is just comp and the existing doors, particularly in the wholesale.
Channel.
And and can you give us a sense of sort of you know what your expectation was for HOKA growth didn't in Q1.
And versus where it shook out and sort of how you see it playing out by quarter over the rest of the year. Thank you.
Yeah. Thanks, Jay I appreciate the question you know.
Obviously, you don't get it on quite a tear and the good.
The debt that is absent really any increased distribution and.
So we're continuing to sell and the.
The very strategic accounts that we've been in.
The only place, where we're really expanding a little bit.
Few more doors and Dick's go into 40 doors index.
And then and nordstroms where and.
And about 25 doors, but not expected to go to a more.
Until the spring so the growth that use experience and the past quarter. It was driven largely.
By our DTC business and existing distribution.
At the same time and the majority of the business that we're seeing is and core franchise styles such as.
Alright, and Clifton, but we're starting to see more adoption and and for other categories, and we talked about and trail and hike the launch a day and a cap of hiking boots, and then received extremely well also so it's broad based growth crossbows channel across you know franchise styles and extended into new categories.
And the demand is just continuing to be Super strong and you know the awareness of the brand and amongst runners is still in the mid 20% and even lower across all consumer so you.
You know what we find is when people hear about the brand and they try it they're hooked and they're in so our job now is just continued to increase awareness and adoption of the brand and the existing distribution play and globally and.
So we're super excited about how things are continuing to perform and performance and a quarter and it was in line, but a little bit better than expected, hence the raise for the rest of the year and will continue to you know and focus and drive that momentum and continue to reinvest marketing dollars to keep it going.
Yeah, and and just Steve just add onto that the so the improvement and revenue guidance Uhm that were now flowing through for the who your outlook. The majority of that increase is coming from the better than expected results of Hogan and Q1, and I think as you think about the balance of the year and.
As we compare against bigger quarters last year, the percentage increase and growth is expected to reduce.
Overall, we're still growing significantly with hookup, but we're gonna start lapping bigger quarters against last year. So that percentage growth may decrease and the nice thing about <unk> is it a nice balanced year right there isn't the.
Seasonality that we have seen and with the brand. So uhm as you think about <unk> continued growth a little bit less on percentage terms.
And a nice balanced year.
Got it thank you so much.
Thanks Jay.
The next question comes from John Kernan from Cowan. Please go ahead.
Yeah. That's excellent. Thank you and take my question and congrats on it.
Great great start to the fiscal year.
And extra.
And it talked about polka, obviously, being I think 50 million of that $60 million increase and and.
And guidance for revenue, but had a phenomenal quarter and the first quarter can you talk to the dynamics of.
[noise] embedded and the guidance for the rest of the year.
Yeah sure I'll I'll take a cricket at first so I think it goes back to what we said on the last earnings call, which was we were going to shift shipments earlier and the year and part of the reason we haven't given quarterly guidance is because we weren't certain of the timing of that but I think as indicated and Q1, we have been able to ship more in.
Q1, so that's what's driven significant growth with the Hulk brand, but also within the wholesale channel and just as a reminder, there.
The intent there was to get more product out into the marketplace, because we saw disruption within the supply chain. So this was a.
And strategic move on our part to work with wholesale customers to take product earlier than they traditionally do.
And this is for US right. This is what's really driving the growth to your question. So.
It's a typical and the sense of we're moving more product and Q1 and anticipation of mitigating supply chain disruption.
We've been able to move more but it also aligns with what we said again on the laughter and his call which was.
The growth of the <unk> brand was really going to occur and the first half as we were shipping and anticipate shipping and the first half product that we typically have shipped on a wholesale account basis in Q3, and so that's what's driving they're very strong result, and Q1 again, it's not necessarily that we're doing more.
Or at this stage, it's more about anticipating supply chain disruption and trying to get more product out into the marketplace to mitigation and a high tech.
But it also then allows us to focus on fulfillment of DTC and and get into that.
[laughter].
So that's.
Okay, and kind of a strategy and the growth behind that you're seeing and Q1.
Understood I I don't think that's my life, but 1 more 1 more for me.
And you talked about T T T going to 50 per cent longer term of.
Of the business.
And we can see from the model that direct to consumer what contribution large and a segment large and it will be.
You want to look it up 700 basis points over the last 2 years and it.
It's now exceeds wholesale in terms of overall margin how should we think about the profitability and P. T. C vs. Wholesale it's a scale towards 50 per cent.
Yeah, we haven't given specifics on profitability other than to say R. E. Commerce channel is our most profitable segment and hence.
A significant emphasis on growing that part of the business and is the big driver of the total D. DTC growth to get 250%. So again, we haven't given specifics on that per se in terms of profitability, but it is our most profitable channel.
And why we are intently focused on driving that proportion DTC as a total of sales $2.50 per cent.
That's great. Thank you.
Extra 1.
The next question comes from Jim Duffy from Stifel. Please go ahead.
Thanks, Good afternoon, guys. Thanks for taking my questions.
I wanted to start asking about a hug and some of the seasonal and comparison influence.
With the wholesale business is there a possibility and we're gonna see similar pull forward from the fiscal third quarter of the fiscal second quarter or more product now and the marketplace too and not think about that as an influence and then I'm also curious that difficult comparison influence on day to see will that continue into the physical second <unk>.
And fiscal third quarter.
Yeah, So Jim I'll I'll take a stab at first and Dave feel free to jump in here I think the hookah dynamic is a little bit different.
And then so with because of the seasonality of the business. It was easy to identify what we traditionally sell in and Q3.
And especially from a wholesale account and how we could identify and strategically move up some of those shipments with hope.
What we're seeing is we're shipping to wholesale but we're also seeing demand increase and so that's where you are seeing the outperformance and the carry through and the outperformance to our full year outlook. So there it's about really the success of Hoecker drew.
Driving additional sales that we're seeing and the quarter. We're more aligned I would say in terms of kind of a traditional cadence as it relates to wholesale accounts for hookah. There, it's about just getting inventory in too.
To accommodate our wholesale states as well as some of the launch states and that is where we are seeing some pressure and looking to expedite and use some of that air freight. So there is a little bit about last and pull forward and it's more about seen increased demand and how we meet that increased demand and the marketplace and bring product in.
And and expedited manner to match that demand and so that's where hook is a little bit different and.
And a little bit more challenged in the sense of how much more can we do give and constraints and disruption and the supply chain and how we then work around that with expedited price. So it is not so much about and pull forward, but it's more about increasing demand and meeting that increased demand.
Okay and related to that before we get into the day to see comparison dynamic Steve the gross margin guidance change pencils to about 20 million is that is that all are afraid is that how we should think of it.
The large large majority so yeah I think the way you're thinking about it is about right in terms of what we anticipate.
I'd say not just air Fry airfreight, but kind of all additional costs associated with trying to get <unk>.
Inventory and sooner. So it is not solely all air freight, but the air freight is a big component of that were also seen increase and other costs related to try and to expedite shipping.
Okay.
And then the day to see comparisons sorry, I know this is stretched to be more than 1 question. It was it started as 1 I promise [laughter].
See comparisons with strong slipper sales and so forth is that a dynamic you expect.
Will challenge progress and the D C business and fiscal 2 Q3, Q or are you kind of through that now given yet.
Yeah I think.
To call the ball and that right now at this point and we did see a little bit of that challenge and and lapping last year.
Stay at home orders, because primarily the slipper growth that we saw I think you're gonna still seats and more channels and you know more so and the upside of DDC is wholesale opened up vs last year, but our philosophy is at this point is we wanna be ready and all channels to wherever the consumer wants to shop, and so we're making sure that we're getting.
Our wholesale inventory levels and line, we're prepared on DTC, both and store then e-commerce globally.
And it's still a very uncertain environment. So if there are further lockdown.
Orders or.
The Delta variant take on a whole new life, we're gonna be ready no matter, where the consumer has to shop.
But we're confident that will be ready to meet the demand across all of those channel. So you'll probably still see a little bit more pressure on Ah DDC and the short term, but longer term and he will get back to normal.
Normal mix and it in the morning increase growth and DDC overtime.
Thank you so much guys.
Extra.
The next question comes from Sam Poser from Williams trading. Please go ahead.
Thank you for taking my question. So I'm just going to ask this could you give us what the D. T. C revenue was by brand and for the quarter or the wholesale revenue by brand for the quarter either way you want to do it.
[laughter].
Hi, Sam and I'll take that 1 so by brand and it'll be global wholesale including distributor asked for the total wholesale channel.
And a quarter and that was $135 million.
Per helga and a quarter 151 million.
43 million and.
10 million.
And other brand 4 million.
Thank you very much.
And then.
2.2 other questions real quick how do you view, just the clean merchandise margins and what do they look like what are you doing with pricing and of.
Of products and.
And then do you have any any thoughts on M&A.
Dave.
Thanks.
Yep and the first 1 I just saw and margins and pricing. So as you know we have you know we've been very tight and clean distribution chart, all of our brand and wholesale.
And we're maintaining high levels of full price fell through and.
As far as price increases go we haven't had dramatic price increases this year.
The product is on and the water if not already and the D C and and the and the accounts and.
The margin the product that's here is considered and <unk> and the guidance go forward with a little bit of hedging for some of the supply chain disruption.
But we're pretty confident and the sell through and the margin that we're gonna have this year next year. We are looking at some price increases across the board and on a global level across all brand, that's and exercise and management team is going to be going the next couple of months to mitigate some of the potential expense increases.
That are coming down the pipe and the supply chain. So this year no price increases steady healthy margins is how we're looking at the business. We don't see any real reason to think differently about that and.
It's more about continuing high premiums fell through and distribution of the branch.
And M&A perspective, you know we've talked about this before and it's not a major priority for US we are continuing to have conversations as we have at and the last 3 to 5 years and.
We're not looking at a major acquisition and that's gonna can dramatically change the shape of the organization. We feel you have so much organic growth amongst our marquee brands now both across footwear geography channel and then ultimately with apparel and we wanted to make sure of and I've taken our eye off the ball, particularly in Oregon.
Okay and.
And at the same time, we are interested and you know smaller brand whether their footwear apparel that could provide healthy growth and the out years 3 to 5 years from now that's something that we can incubate such as we've done with Coca over the last 9 or 10 years and retail feel right. Now if we were gonna do anything it would be in that space and smaller brand.
But not a major priority, we're just continuing to have conversations and and.
1 day away what's out there.
Thanks, very much continued success and.
And <unk>.
The next question comes from Kimmy low alliance from B T. I G. Please go ahead.
Hi, everyone and thank you uhm.
Dave I was wondering if given.
Given the consumer data that you're tracking and working on your own consumers and.
That it comes to your channel.
Have you see those customer zone, you discipline and last year that probably came through and bought slippers.
Come back and get here and buy and Justin.
Type of footwear products and have you seen any sort of attention that's come back to the brand.
Yeah, we definitely see and that Camilo, you know, what we talked about and the last couple of quarters is we're bringing in a younger more diverse consumer and this is for all of our brand and.
And then we are seeing more repeat purchases so.
The trend that we talked about last year.
Year round, this time, and Q2, where people were coming to the brand and buying.
Traditionally a classic and now coming in and buying a flat for a different category of product for the first time.
And then they are coming back you know, particularly with a flop franchises and talked about and there's a lot of new net there's a lot of excitement and there's a lot of innovation and as we expand that franchise to be more of a.
Sandals and a slipper, we're starting to get increased purchases that way as well. We're also seeing really strong results for my loyalty program and that's driving a significant amount of our sales and repeat purchases. So a lot of Ah repeat purchases our loyalty members. So what's great as we get these new consumer them and get them signed up and our loyalty program and.
Then we can cultivate and new opportunities across a diverse category offering. So this is a big change from where we've been in previous years are we now have exciting compelling product and beyond core classics, and slippers, and sandals and sneakers and rain boots and.
And fashion winter boots, and we're starting to see those categories really resonate which is great. As you know that's a key strategy and viruses diversify.
And then obviously some strong adoption and that we're starting to see what the apparel.
So you know what gets me really excited about the <unk>.
The momentum right now is that it's broad based it's cross gender and it's cross category It's global.
And we think that there's a lot more opportunity down the road to continue down some of these new categories and build more of a year round business.
And that's gonna hit and thank you for that color and that's I guess, that's just 1 more and I think senior justice all of it and put them on that kind of try and thing down and and see if we can get some sort of quantitative benchmarks sales understand the dynamics around slippers, and if you could help us understand.
Email, the Prepandemic and makes it slippers and.
And this quarter relative too.
And it was last year and what he went down to this year and and.
And could help us understand how that will modulate and to you know.
And next quarter. So just really trying to understand you know the the.
<unk>, that's a comparison that we're facing him as we transition.
Into a faulty and until more normalized shopping behavior pattern relative to 1 of our last year at this time.
[noise], Yeah, sure Camilla and I can give you probably more high level overview, rather than specific numbers because it's we're dealing with 2 unusual years here, so going back a year ago right with the pandemic and.
Kind of.
Really taking a fact if people were working from home we saw.
Very significant.
Increase in terms of the slipper business and and that was largely again from a channel basis, then driven through our DTC business.
So we saw sooner.
General growth with the and slipper business. We are we are copying that growth and.
But it's but it's also changing because of this dynamic where we're shipping more product early this year. So it's not a true apples to apples comparison.
What we can say is that we're continuing to see growth part of that growth is this year that we've shipped some of that product earlier and.
And so I think we need to see how the next few quarters play out.
In terms of that growth the encouraging news is it's still a growing category for us even on top of last year's exceptional growth.
But we are shipping and some of that product earlier, and so we'll see some of the growth moderate in future quarters, and we will have a better read on it as we get through the season, but we're still encouraged by growth that we're seeing in that category.
Yeah, and the other day, but.
Yeah, Alright come out look at franchise and have the number 1 and style and for the quarter.
Similar to last year, So I was still seeing that strong reaction there.
A little bit of growth and that style vs last year, but obviously very compelling.
Program, and we're gonna continue to build on and they're still strong demand for it.
Got it so that's encouraging to hear that slippers was part of that big with lunch and date, you had and this quarter.
Is there a way to quantify what the total replenish and that was 2 this quarter. If we separate out just generically spring products out through vs for punishment.
What did that and add to the yeah yeah.
Yeah, we don't there isn't a specific number to to speak to yes in terms of replenishment because it will be dependent on kind of future sell through too. So we can't peg too and number at this stage I would say stay tuned on that what we are saying, though is that the.
The growth as I mentioned on 1 of the previous questions that you're seeing in the growth and the quarter.
A good component of that is building inventory and the wholesale channel.
So clearly the replenishment will be dependent on what sells through that.
And so that's where we need the next couple of quarters, because we are shipping and did ship and Q1, some fall product right and this is all to mitigate some of the disruption that we're seeing with supply chain. So don't have a specific number at this stage other than to say the growth that you're seeing and on wholesale and Q1 is really our strategy.
<unk> of getting more product out early to replenish inventory and the wholesale channel, which we've done we are seeing goodsell through but some of that product is they're rebuilding inventory and then we'll see as we get through the next couple of quarters of how much of that rebuilt inventory vs. How much of that sold through and then we'll be and a better position to say how much is replenishment.
Very good color 1 last 1 if I could.
And that it's becoming pretty well now and I. Thank you and by consumers that inventories are fairly lean and if you see something 81, and you should causes and diet.
Are you seeing that and materialize and the earlier purchases up fall product.
I wouldn't say and that's necessarily happening just yet.
Selling is a good healthy mix of spring and summer and fashion classics, and particularly and slippers and the new mail, if we're seeing and anywhere it's probably and the new male and the classic mini vs previous years.
But we're not seeing a lot of early shopping based on inventory, we've been able to maintain a good and healthy mix of inventory the wholesale channels and getting fulfilled again and sell through is as healthy, but I wouldn't say necessarily seeing people shop early because they're afraid of and.
And not being able to get it.
Alright, thanks, so much guys and good luck.
Alright.
The next question comes from Jonathan comp from there and please go ahead.
Yeah. Thank you I Wanna ask you about a hookah, Steve maybe first just when you think about seasonally for <unk> typically and it looks like and my first quarter is among the lowest in terms of the sales by quarter throughout the year and it doesn't look like that's the way you're planning or at least embedded and the guide so any any additional color.
Kind of seasonally how we should think about <unk> and any constraints to growth. If if there are any and then Dave when do you think about the view to a multibrand multibillion dollar brand brand opportunity could you share a little bit more just what that looks like what do you think about geography channel product you know any sort of color you cannot and the mix and those.
There is.
Sure John So I'll go first and talk a little bit about hookers. So you're right I think traditionally we've seen Q1 be smaller that is why you're seeing higher percentage growth. Currently so as we see it become a more seasonally balanced brand, that's why you're seeing higher levels of growth.
And what has traditionally been are historically been smaller dollar quarter, so with the higher percentage they are catching up to some of the bigger quarters and.
In terms of constraints right.
Right now, it's not demand, it's product and getting product in quick enough to fulfill demand there is <unk>.
Demand out there for Hulk, and we're just trying to meet that demand and a constrained environment and so again to 1 of the earlier.
Questions, where I was talking about air freight <unk> is a brand that we're looking to expedite freight to get it in to meet the demand so.
We've got and.
A few questions in terms of Hogan and how we see it clearly it is a big grower, it's growing very rapidly.
The challenge is more just us getting product made and to the market and.
The sell through is incredible pricing very clean and sell through is great. We're building the smaller quarters and so we're here. The challenge really is just getting inventory and and getting it in and time to meet the demand and the marketplace and in some cases.
And that's where we're seeing some pressure.
With the brand so overall very healthy growing incredibly well, we're very pleased with the progress that we're making and we're just trying to keep up with the growth that we're seeing and out there.
Okay and can you <unk>.
Hitting the question you had about multi brand.
Yeah, Yeah, I misspoke, the multibillion dollar opportunity and you see for the Hookah brand Dave could you just talk about and any broad strokes. How you view that played out by channel or geography, or even product category and just trying to conceptualize. How you were thinking about the opportunity for <unk>.
Yeah, I think we.
We think we can surpass 1 billion dollar.
Milestone with the current distribution and current category mix. So heavy on road and trail running still primarily as our drivers of revenue and growth. So the bondi and clipped clipped and franchises as an example.
Longer term and a multibillion dollar opportunity.
Continuing to take market share from our competitors globally and core run really expanded outdoor hike busy.
Business.
And is a great example of the potential there, we're starting to see traction beyond that and stealing market share that there as well.
From a channel mix.
To finish off of the there is also a significant lifestyle opportunity for us and.
And we're starting to see product and they're in that category and seeing and success. There early on and I think you'll see spring 22, and 12.23, some really compelling crossover style that are still rooted and performance, but have a broader wearing appeal for consumers and.
Ultimately there is a and apparel opportunity that were incubating as you saw we brought in and you have a design for apparel. So are we getting serious about that.
You know broad base will probably be larger international isn't the U S overtime.
But that is going to be driven by.
Healthy mix, probably 50 per cent of D. T C.
And 50 per cent wholesale again, and just continuing to increase the breath of the line and <unk> and increasing reach and particular places like Europe, and Asia Pacific with a big focus on China on top of that continued growth and North America.
That's great I appreciate all the color. Thank you.
That.
The next question comes from Janine Stichter from Jeffries. Please go ahead.
Hi, Thanks, so much for taking my question and what to ask about the SG&A. Thank you said you were looking at dollars similar to how you had previously planned it but with the better sales. So can you help us to think about the relationship and expresses valuable and the model and then it sounds like maybe there are some areas, where you would ramp SG&A more and he could and maybe speak to those areas and.
And what your optimal level of standard day.
And <unk>.
I'll take that so I think what we're seeing and what we spoke to on the last earnings call is a commitment to increasing so again last year and.
And I think as everyone acknowledges a unique year incentive we saw and acceleration.
Of revenue and we weren't keeping pace necessarily with investments and a year of uncertainty and so we've approach this year much more around building capabilities and infrastructure and marketing for brand awareness as we now look to continue to grow the organization and grow our brands and so you.
Are seeing a step up and step up as a percentage of sales.
As we've currently guided and that approximately 35% of revenue.
That's a good that's a good point.
To be we think for the current year.
What we do and are also doing is increasing our variable component of that and.
And so with that we're being very tight in terms of management on fixed costs.
Which is allowing us to create more variable spend specifically around marketing and global marketing to build brand awareness. So as we're seeing tremendous growth with these brands.
Fueling that with marketing to drive brand awareness at the same time, we are leveraging our fixed costs, which is.
What what were seen and and overall picture again, ignoring what happened last year.
To build that profile and so we're very comfortable with that we liked the profile.
Of what we've got and the current guidance that gives us that flexibility.
What we are seeing to that and what we've flow through currently is we're seeing some challenges with hiring and getting people when we thought.
And so that is some of the reduction that you are seeing and the current SG&A guide vs. The prior SG&A Guy and that will be something that may change slightly in the future as we're trying to build talent and the organization to support the level of growth that we see and the coming year. So overall comfortable with what we're guiding this.
Year more variable to drive marketing globally and brand awareness globally.
Leveraging on the fixed costs, but also recognized and we're probably a little bit behind where we thought we would be a quarter ago, and that's giving us a little bit of leverage and the current year.
Yeah, and I would just add okay got it.
Sorry did you know just add to that that we're having ongoing conversations about Howard tracking with hiring and Steve said, that's a little bit more challenging this environment than we anticipated.
So anywhere that we have money that is.
And not being span and potentially treat up we're doing our work to reallocate that to marketing goes to drive the brand.
All brand is going forward and also international grew.
Gross so we can turn these markets around at a faster pace.
Okay, Great I know, it's very hard to look out uhm animal tier basis now. Thank you very much and and brand building non especially for that day.
Do you think the level of marketing spend that you are at now is that optimize can we see that kind of effect to moderate and at the brand awareness and pick out.
I think it's very healthy right right now for <unk>.
Yep lytic sector tend to have higher rates of marketing with athletes and events and everything else. So.
It's working for US, we're continuing to drive it uhm I don't see.
Reducing that anytime soon if we have an opportunity to ramp it up even more so we probably will because we want to states super aggressive and competitive here on the outside we have been increasing the rate of spend over the last 3 years to very healthy and comparable to some of our peer groups and.
And we're going to continue raising that but you know.
I think right now we're in a very good spot, where we have a lot of flexibility and agility with how we spend our money, where we spend our money by brand region channel and type.
And we're constantly having conversations with our Ah brand leaders and commercial teams on how we can optimize that so.
Marketing is a big leather for us and this environment and Super competitive we want to stay aggressive and and we're gonna put as much and marketing dollars and to play as we can and making sure that we also have our building and infrastructure to support the growth that we're driving.
Okay, great. Thanks for all the color.
You bet.
And our last question comes from Mitch cause and that's from pivotal research. Please go ahead.
Yeah. Thanks for taking my questions Steve on the on the earlier shipping that you've talked a lot about can you quantify the impact that that had and the quarter and you know your sales were up 10 or $28 million or you said earnings up nearly $2 from your from a year ago can you parse out and packed on those 2 numbers from the earlier shopping and then I have 1.
Follow up on 1.
Yeah. So it's a good question and we haven't given quarterly guidance. So.
What we're what we're saying and it's probably best viewed through the lens of the change and the annual guidance that we've given so with increasing revenue $60 million. What we're saying is what we've achieved and again this is largely through hooker and Teva.
That is better performance than what we expected and and that's where we're flowing through it on the year in terms of what we're saying is that's largely us.
Adhering to the strategy that we set out at the beginning of the year, which is ship as much as we can as early as we can.
And so that's why you're not necessarily seen the change and the full year outlook at this stage. So I think in terms of the when you look at the change and.
And Q1, we are shipping a lot more than what we historically do that's not necessarily more business. Some of it is is demonstrated by the performance of Hogan Teva. The hug aspect is really more around the strategy of shipping more product early to replenish depleted inventories.
And set ourselves up for a successful fall season.
That's what we're doing and that's really what you are seeing and the numbers.
Because of that outsized revenue increase and largely timing on the <unk> side, it's driving a significant profit and the corner right. Some of that is getting pass through but again not all of it is overperformance is largely timing of performance.
And so best viewed again through that lens of compare our full year outlooks and there you can identify it and then just speaking to the other components of the P&L as we've talked about on previous questions. We are seeing pressure.
We supply chain constraints, and bringing inventory and and.
And so that is with leading us to take down our gross margin profile as we expect to incur more costs on that front and then we're able to offset some of those increases with some leverage and SG&A vs. The prior guidance, which is allowing us to hold the operating.
Fit profile, but with the increase and sales driving the lift and EPS that we're also passing through.
And then just real quick on maybe 2 quick ones I'm just following up on come out of the question around flippers and I can appreciate all the dynamics there that you mentioned, but I'm curious you know the other guy does high single solo double are you expecting slippers to be better or worse and 1 with that and then maybe a second on on hug.
And.
Made some positive comments about men's consideration can you remind us kind of where the split is man's vs. Women's that's kind of how the growth rates compare these days.
Yeah, sure I think from and the overall standpoint, and as I said, we're still looking at growth again, it's not.
On a percentage basis similar to what you saw last year because of the dynamics of last year and what.
What drove the growth there, but the good news is we're maintaining and continuing to build on that on that growth.
And then from a men's shift in terms of percentage of the business. We are continuing to see some increases as we resonate with the mail consumer and.
Yeah, and we're still and kind of growing above are at roughly around that 15% range, where historically if you go back a few years was probably closer to him around the 10% to 12% so.
Yeah and proportion to sales so not only are we growing the dollar amount right. We're also and we're growing the percentage.
Of that business too so again good good growth.
Increasing on the mail on the male side as Dave said earlier, as we're resonating and kind of with younger consumers that includes males and so bringing more new customers into the brand. Dave did you have anything you want to add on that 1.
Yeah, No I think that's right I think what we're seeing and men. We've been at this for quite some time to make a relevant and and exciting for the male consumer foot locker partnership has been a big catalyst for US there and included as well as journey and we're getting more penetration and wholesale for men's product led by the new male but also.
Now adopting some of the slipper products and.
And driving acquisition online and R E Commerce business, and DDC business, and we had better strength and and places like China, where the penetration and Mendez bigger and more broad base. So we're going to continue to build on that we're allocating more marketing dollars against the men's opportunity we.
We feel that that is a significant.
Space that we can build and takes share from competitors and that space and be a meaningful brand per man over a long term.
So the the progress there is exciting and and.
We have a new leader.
Later in the men's business that joined us during the pandemic and.
And a tremendous experienced and innovation pipeline for product and strong we're going to continue to build on that.
I would say just and clothing I do want to say that I want to give the management team and and the whole organization and a lot of credit for.
The way they manage the last 18 months.
We've been and maintaining a very aggressive mindset with these brands we want to continue to steal share, we where we want to continue to get gain shelf space globally, but.
But the way the team the executive team and their teams globally have managed around factory planning staying aggressive on the buys 1 other brands are cutting inventory that has helped us tremendously or navigating through a lot of the supply chain issues through earlier shipments close partnership with our Keith.
Key wholesalers to take product early.
Super tight marketplace management by our branch were saying clean and premium.
And the existing product pipeline, and what's coming down from and innovation standpoint and.
Is incredibly compelling so.
Combine all this with a very purpose led culture and.
And there's a lot to be excited about a deckers and I'm really proud of the work the teams have done.
And I'm very excited about what's ahead of us for all of our brands on a global scale. So we appreciate your time.
This concludes our question and answer session. Thank you for attending the Deckers brands first quarter of fiscal 2022 earnings call. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
[music].