Q1 2026 Deckers Outdoor Corp Earnings Call

July 24, 2025

At this time all participants are in a listen only mode.

Following the presentation, we will conduct a question and answer session.

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Speaker Change: I'll now turn the call over to Erinn, Kohler, VP Investor Relations and corporate planning.

Erinn Kohler: Forward-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 statement.

Speaker Change: Hello, and thank you everyone for joining us today on the call as Stefano Karate, President and Chief Executive Officer, and Steve Fasching, Chief Financial Officer before we begin I would like to remind everyone of the Companys Safe Harbor policy. Please note that certain statements made on this call are forward looking statements within the meaning of.

Erinn Kohler: The company has explained some of these risks and uncertainties in its SEC filings, including in the risk factor 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.

Speaker Change: Of the federal Securities laws, which are subject to considerable risks and uncertainties.

Speaker Change: These forward looking statements are intended to qualify for the safe Harbor from liability established by the private Securities Litigation Reform Act of 1995.

Erinn Kohler: Please note, as previously disclosed, the company affected a 6-for-1 forward stock split during the second quarter of fiscal year 2025. The share-per-share and resulting financial amounts mentioned on this call have been adjusted to reflect the effectiveness of the On this call, management may refer to financial measures that were not prepared in accordance with generally accepted accounting principles in the United States, including constant currency. For example, the company reports comparable direct-to-consumer sales on a constant currency basis for operations that were opened throughout the current and prior reporting period. The company believes that these non-GAAP financial measures are important indicators of its operating performance because they exclude items that are unrelated to, and may not be indicative of, its core operating resources.

Speaker Change: All statements made on this call today other than statements of historical fact are forward looking statements and include statements regarding our ability to respond to the macroeconomic environment and the impacts on our business and operating results, including as a result of changes to global trade policy and fluctuations in foreign currency exchange rates.

Speaker Change: Our current and long term strategic objectives, the performance of our brands and demand for our products anticipated impacts from our brand product marketing marketplace and distribution strategies product development plans and the timing of product launches changes in consumer behavior, including in response to price increases our ability.

Erinn Kohler: Please review our earnings release published today for additional information regarding our non-GAAP financial...

Speaker Change: <unk> to respond to the dynamic consumer environment, our ability to achieve our financial outlook, including anticipated revenues product mix margins expenses inventory levels promotional activity anticipated rate of full price selling and earnings per share and our capital allocation strategy, including the potential repurchase of shares.

Stefano Caroti: With that, I'll now turn it over to Stefano. Thank you, Erin. Good afternoon, and thank you all for joining today's call. Fiscal year 2026 is off to a solid start for Deckers. With HOCA and UGG both outperforming the first quarter expectations, we set forth on our year-end call. In the first quarter, our brands gained market share while maintaining a high degree of full price integrity. HOKA delivered its largest quarter in its history, driving strong sell-throughs during this period of key model transition. We continue to make disciplined and strategic investments in our brands and our teams tightly manage spend in other areas of the business to provide flexibility.

Good afternoon, and thank you for standing by, welcome to the Decker's Brands. First quarter, fiscal 2026 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.

Speaker Change: Yes.

Speaker Change: Forward looking statements made on this call represent management's current expectations and are based on information available at the time such statements are made forward.

Instructions will be provided at that time for you to queue up for questions.

If anyone has any difficulties hearing the conference call?

Speaker Change: Forward 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.

Please press star zero for operators assistance, at any time.

I would like to remind everyone that this conference call is being recorded.

Speaker Change: I'll now turn the call over to Aaron Kohler VP investor relations and corporate planning.

Speaker Change: The company has explained some of these risks and uncertainties and its S E SEC filings, including in the risk factors section of its annual report on Form 10-K, and quarterly reports on Form 10-Q.

Stefano Caroti: This all led to Deckers delivering a great first quarter result, highlighted by revenue growing 17% versus last year. to $965 million. and Diluted Earnings Per Share increasing 24% to 93%. The strength of our business continues to be driven by the remarkable growth in our international markets, with Hoka and UGG both contributing to Decker's 50% increase in international revenue. while navigating a choppy U.S. consumer environment. Our first quarter results demonstrate that Hawk & Ugg remain two of the best-performing and most consumer-loved brands in our industry. We believe that Deckers' key differentiator is our ability to build premium brands focused on authenticity, innovation, and purpose.

Speaker Change: Sept 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.

Speaker Change: Hello. And thank you everyone for joining us today. On the call is Stephano, corot president and chief executive officer and Steve fasching Chief Financial Officer. Before we begin, I would like to remind everyone of the company's Safe Harbor policy.

Speaker Change: Please note as previously disclosed the company effected a six for one stock split during the second quarter of fiscal year 2025, the share per share and resulting financial amounts mentioned on this call have been adjusted to reflect the effectiveness of the stock split.

Speaker Change: 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 4 are looking statements are intended to qualify for the Safe Harbor from liability established by the private Securities. Litigation Reform, Act of 1995

Speaker Change: On this call management may refer to financial measures that were not prepared in accordance with generally accepted accounting principles in the United States, including constant currency.

Speaker Change: For example, the company reports comparable direct to consumer sales on a constant currency basis for operations that were opened throughout the current and prior reporting periods.

Speaker Change: All statements made on this call today other than statements of historical fact. Our forward-looking statements and include statements regarding our ability to respond to the macroeconomic environment. And the impacts on our business and operating results including as a result of changes to global trade policy and fluctuations in foreign currency exchange rates.

Speaker Change: The company believes that these non-GAAP financial measures are important indicators of its operating performance because they exclude items that are unrelated to and may not be indicative of its core operating results. Please review our earnings release published today for additional information regarding our non-GAAP financial measures.

Stefano Caroti: Our sustained track record of delivering healthy and profitable growth in challenging environments gives us confidence in navigating current uncertainty. And we believe that our brands and teams will continue to achieve long-term success. Our brands continue to be guided by the principles of consumer-first, elevating our products to exceed the expectation of consumers in a more competitive environment. brand-led, leveraging our unique brand codes to deliver a consistent brand experience as we target share gains across categories, seasons, and product applications. Innovation Forward, challenging ourselves to create distinct styles with tangible consumer benefits. And Globally Driven, balancing our business across regions and...

Speaker Change: Our current and long-term strategic objectives, the performance of Our Brands, and demand for our products. Anticipated impacts from our brand product marketing Marketplace and distribution strategies, product development plans and the timing of product launches

Stefano Karate: With that I'll now turn it over to Stefano.

Stefano Karate: Thank you Erin.

Stefano Karate: Good afternoon, and thank you all for joining today's call.

Stefano Karate: The year 2026 is off to a solid start for Deckers with HOKA and UGG, both outperforming in the first quarter expectations, we set forth on our year end call.

Stefano Karate: In the first quarter, our brands gain market share, while maintaining high degree of full price integrity.

Speaker Change: Changes in consumer Behavior, including in response to price increases, our ability to respond to the dynamic consumer environment. Our ability to achieve our financial Outlook including anticipated revenues product mix margins expenses, inventory levels, promotional activity, anticipated rate of full price selling and earnings per share and our Capital allocation strategy, including the potential repurchase of shares.

Stefano Karate: <unk> delivered its largest quarter in its history.

Speaker Change: Forward-looking statements made on this. Call represent Management's, current expectations, and are based on information available at the time such statements are made

Stefano Karate: Driving strong sell throughs. During this period of key model transitions, we continue to make disciplined and strategic investments in our brands and our teams tightly managed spend in other areas of the business to provide flexibility.

Stefano Caroti: As we view for the future, we believe these principles, supported by the strength of our fundamentals and operational discipline, will help us lead, adapt, and grow in the rapidly evolving consumer line.

Speaker Change: For 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.

Stefano Karate: This all led to Deckers delivering a great first quarter results highlighted by revenue growing 17% versus last year to $965 million.

Stefano Caroti: Steve will provide further details on our first quarter financial results. and an update on fiscal year 2016.

Stefano Caroti: First, however, I'll share more details on brand performance and how we plan to execute the remainder of the program. Starting with HOKA, global revenue in the first quarter increased 20% versus last year to $653 million. Hookah Performance came in ahead of our expectations. but the shape of the brand's revenue growth versus last year was aligned with what we had anticipated. Global Wholesale increased 30%, driven primarily by the strength of our international regions, with the U.S. also contributing to this growth. And DTC increased 3% globally, with international regions maintaining their momentum, which was partially offset by ongoing pressure in the U.S.

Stefano Karate: And diluted earnings per share, increasing 24% to 93 sons, the strength of our business.

Stefano Karate: T news to be driven by the remarkable growth in our international markets with HOKA and UGG, both contributing to Deckers, 50% increase in international revenue.

Speaker Change: The company has explained some of these risks and uncertainties and it's secc filings, including in the risk factor section, of its annual report on form, 10K, and quarterly reports on form 10q 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.

Stefano Karate: While navigating choppy U S consumer environment.

Stefano Karate: Looking at the global marketplace, our first quarter results demonstrate that whole kinnock remain two of the best performing and most consumer loved brands in our industry. We believe the Deckers key differentiator is our ability to build premium brands focus on authenticity innovation and purpose.

Speaker Change: Please note as previously, disclosed the company affected a 641 Ford stock split during the second quarter of fiscal year 2025 the share per share and resulting Financial amounts. Mentioned on this call have been adjusted to reflect the effectiveness of the stock split.

On this call management, May refer to financial measures that were not prepared in accordance with generally accepted accounting principles in the United States including constant currency.

Stefano Caroti: online channel, as previously forecast. As you can see, the HOKA brand's international business continues to drive exciting and broad-based growth across all regions in both DTC and wholesale. EMEA contributed the most meaningful incremental dollar growth. as Europe reported record quarterly wholesale reorders and DTC continue to be fueled by gains in consumer acquisition and retail. The APAC region is also delivering impressive growth. Hoka further penetrates the market with model brand partner stores as well as own retail stores in China. In the U.S., hookah performance was aligned with our expectations. Marketplace dynamics are generally playing out as anticipated amid key franchise upgrades, resulting in the brand experiencing a similar quarter relative to the one previous year.

Stefano Karate: Our sustained track record of delivering healthy and profitable growth in challenging environments gives us confidence in navigating current uncertainties.

Speaker Change: For example, the company reports comparable direct to Consumer sales on a constant currency basis for operations, that were open throughout the current and prior reporting periods.

Stefano Karate: And we believe that our brands and teams will continue to achieve long term success, our brands continue to be guided by the principles of consumer first.

Speaker Change: The company believes that these non-gaap Financial measures are important indicators of its operating performance because they exclude items that are unrelated to and may not be indicative of its core operating results.

Speaker Change: Please review, our earnings release published today for additional information regarding our non-gaap financial measures.

Stefano Karate: Our products to exceed the expectations of consumers in a more competitive environment.

Stephano Corot: With that, I'll now turn it over to Stephano.

Thank you, Aaron.

Stefano Karate: Brian led leveraging our unique brand codes to deliver a consistent brand experience as we target share gains across categories.

Good afternoon, and thank you all for joining today's call.

Stefano Karate: <unk> and product applications.

Stefano Karate: The vision forward challenging ourselves to create distinct styles with tangible consumer benefits.

fiscal year 2026 is off to a solid start for Deckers with Hoka and Ugg, both outperforming the first quarter expectations, we set forth on our year end call

Stefano Karate: And globally, driven balancing our business across regions and channels.

Stefano Karate: We build for the future. We believe these principles supported by the strength of our fundamentals and operational discipline will help us lead adopt and grow in the rapidly evolving consumer landscape.

Stephano Corot: In the first quarter, Our Brands, gain market, share, while maintaining a high degree of full price integrity.

Stefano Caroti: From a U.S. wholesale perspective, performance continues to reflect our disciplined approach to marketplace. HOKA is driving revenue growth from increased selling, additional doors with key partners to satisfy greater in-store demand, and reorders, a sell-through in the channel, continue to outpace revenue growth. The HOKA Brand's ongoing success with the Wholesale Channel highlights a continued shift in U.S. consumer shopping preferences toward in-person retail experience. Our observations indicate that while consumers often search for deals online, brick-and-mortar stores remain the primary venue for full-price sales, aligning with the feedback received from a retail... Our continued journey to thoughtfully expand wholesale doors plays well into this marketplace providing HOKA the opportunity to build share and strengthen partnerships with.

Stephano Corot: Hookah delivers largest quarter in its history. Driving strong, sell throughs during this period of key model transitions.

Stefano Karate: Steve will provide further details on our first quarter financial results.

Stefano Karate: And an update on fiscal year 'twenty six.

We continue to make disciplined and strategic investments in Our Brands. In our teams, tightly managed spend in other areas of the business to provide flexibility,

Stefano Karate: First however, I will share more details on brand performance and how we plan to execute the remainder of this year.

Stefano Karate: Starting with HOKA global revenue in the first quarter increased 20% versus last year to $653 million.

Stephano Corot: This all led to Dakar delivering a great first quarter result. Highlighted by Revenue growing 17% versus last year to 965 million.

Stefano Karate: Hookup performance.

Stefano Karate: In ahead of our expectations, but the shape of the brand's revenue growth versus last year was aligned with what we had anticipated.

Stefano Karate: Global wholesale increased 30%.

24%. 293 cents. The strength of our business continues to be driven by the remarkable growth in our International markets with Hoka and a both contributing to decor's 50% increase in International Revenue.

Stefano Karate: Driven primarily by the strength of our international regions with the U S also contributing to this growth in.

Stephano Corot: While navigating a choppy us consumer environment.

Stefano Caroti: On a much smaller scale, we also continue to selectively expand our own retail locations in key cities around the world. as we seek to build direct relationships with consumers and offer experiences that showcase the full breadth of the Hoka brand's product. These strategies help HOKA gain visibility and solidify its position as the leading running brand in the U.S., although they create short-term pressure on BTC due to our limited retail presence and reliance on e-commerce. Over time, we expect our DTC business to benefit from the conversion of newly acquired consumers to loyal repeat purchasers. In addition to the channel dynamics affecting We have practically identified opportunities for improved execution in response to evolving U.S.

Stefano Karate: In DTC increased 3% globally with international regions maintained their momentum, which was partially offset by ongoing pressure in the U S online channel as previously forecasted.

Stephano Corot: Looking at the global Marketplace, our first quarter results, demonstrate that Hawk remain 2 of the best performing and most consumer loved brands in our industry.

Stefano Karate: As you can see the HOKA brand's international business continues to drive exciting and broad based growth across all regions in both DTC and wholesale EMEA contributed the most meaningful incremental dollar growth is Europe reported record quarterly wholesale reorders and DTC continued to be fueled by gains in consumer acquisition and <unk>.

We believe that decor's key differentiator is our ability to build premium Brands focused on authenticity Innovation and purpose.

Our sustained track record of delivering healthy and profitable growth in challenging environments, gives us confidence in navigating, current uncertainties and we believe that Our Brands and teams will continue to achieve long-term success.

Stefano Karate: The APAC region is also delivering impressive growth.

Stefano Karate: Polka further penetrates the market with the motto brand partner stores as well as owned retail stores in China.

Our Brands continue to be guided by the principles of consumer. First elevating our products to exceed the expectation of consumers in a more competitive environment.

Stefano Caroti: consumer demand. As a relatively young brand, HOKA remains committed to applying insights gained from our experiences to drive future growth and development. Recognizing some of the execution challenges we faced over the last six months, we're implementing changes that include adjusting product lifecycle. to ensure a steady and balanced introduction of new products across key categories, time to coincide with major shopping periods, while providing greater separation between launch dates for our largest franchises. Tightening marketplace inventory targets on outgoing models ahead of product updates. in enhancing our HOKA DTC loyalty program to more effectively differentiate the DTC. which will take time for the benefits of these actions to meaningfully impact our business.

Stefano Karate: In the U S. Hookup performance was aligned with our expectations marketplace dynamics are generally playing out as anticipated amid key franchise upgrades, resulting in the brand experiencing similar quarter relative to the one prior.

Stephano Corot: Brand LED leveraging, our unique brand codes to deliver a consistent brand experience as we target share gains across categories seasons and product applications.

Stephano Corot: Innovation forward challenging ourselves to create distinct styles with tangible consumer benefits.

Stefano Karate: From a U S. Wholesale perspective performance continues to reflect our disciplined approach to marketplace management bookings.

And globally, driven balancing our business across regions and channels.

Stefano Karate: Cook is driving revenue growth from increased selling.

Stefano Karate: Additional doors with key partners to satisfy greater in store demand and reorders of sell through in the channel continue to outpace revenue growth.

As we build for the future, we believe these principles supported by the strength of our fundamentals and operational discipline will help us lead adapt and grow in the rapidly evolving consumer landscape.

Stefano Karate: Hooker brands ongoing success with wholesale channel highlights the continued shift in U S consumer shopping preferences toward person retail experiences our observations indicate that while consumers often searched for deals online brick and motor stores remain the primary venue for full price sales aligning with the feedback received from our retail partners.

Steve will provide further details on our first quarter Financial results.

In an update on fiscal year 26.

First, however, I'll share more details on brand performance and how we plan to execute the remainder of this year.

Stefano Caroti: but we're confident they will ultimately improve the consumer experience and facilitate more seamless key franchise updates in the future. With respect to our current franchise upgrades, the consumer signals we're seeing for Bondi, Clifton, and Arahi are quite Bondi and Clifton are driving consistent and healthy sell-through in the global marketplace across channels and segments of distribution, evidenced by representing the top two running franchises in the U.S., according to Circana, driving very strong reorders and representing the top sellers among acquired and retained customers in EMEA, and doubling year-over-year volumes in China for the spring-summer 25. Building off the success of Klisten and Bondi, the R.I.E.8 update has also been a success since launching at the beginning of.

Stephano Corot: Starting with Hoka Global Revenue in the first quarter, increased 20% versus last year to 653 million.

Stefano Karate: <unk>.

Stefano Karate: Our continued journey to thoughtfully expand wholesale doors plays well into this marketplace dynamic providing HOKA the opportunity to build share and strengthen partnerships with key customers.

Hookup performance came in ahead of our expectations but the shape of the Brand's Revenue growth versus last year was aligned with what we had anticipated.

Stefano Karate: On a much smaller scale. We also continue to selectively expand our owned retail locations in key cities around the world as.

Stephano Corot: AS Global wholesale increased 30%.

Stefano Karate: As we seek to build direct relationships with consumers and offer experiences that showcase the full breadth of the HOKA brand's product offering these strategies help HOKA gain visibility and solidify its position as the leading running brand in the U S. Although they create short term pressure on DTC due to our limited.

Driven primarily by the strength of our International regions with the US also contributing to this growth.

Stefano Karate: Sense and reliance on e-commerce over time, we expect our DTC business to benefit from the conversion of newly acquired consumers to loyal repeat purchases.

Stefano Caroti: Early feedback in the U.S. has been very positive on the Profit Institute. with particularly strong initial selling in their own specialty channel and in detail. EMEA has experienced double-digit weekly sell-throughs since launch. And China has seen significant volume gains on this model versus last year, performing well ahead of plan for the first two weeks. While still early, we're very pleased with the initial results. The consumer is showing a strong affinity for the updates to the Hoka brand's three largest franchises. We continue to believe there is more work to be done to build the same heat in other franchises across our compelling products.

Stefano Karate: In addition to the channel dynamics affecting hookup, we have practically identified opportunities for improved execution in response to evolving U S consumer trends.

Stefano Karate: As a relatively young brand HOKA remains committed to applying insights gained from our experiences to drive future growth and development.

Stephano Corot: As you can see, the hookup Brands, international business continues to drive exciting and broad-based growth across all regions in both DTC and wholesale contributed the most meaningful incremental dollar growth as Europe. Reported record, quarterly wholesale reorders and DTC continue to be fueled by gains in consumer acquisition and retention. The APAC region is also delivering impressive growth as Hoka further penetrates the market with modern brand partner stores as well as owned retail stores in China.

Stefano Karate: Recognizing some of the execution challenges we faced over the last six months. We're implementing changes that include adjusting product life cycles to ensure a steady imbalanced introduction of new products across key categories timed to coincide with major shopping period, while providing greater separation between launch dates for our largest.

In the US, hookah performance was aligned with our expectations Marketplace. Dynamics are generally playing out as anticipated amid key. Franchise upgrades resulting in the brand experiencing a similar quarter relative to the 1 Pryor

Stefano Caroti: We believe the Hoka brand's point of differentiation to the consumer is its relentless focus on innovation that delivers transformational to continue delivering the level of innovation consumers have come to expect. We've bolstered capabilities across design, innovation, color, and lifestyle, allowing for greater dedicated resources to enhance a broader range of styles. As a result, we're seeing tangible improvements to the product pipeline, which is reflected in the positive retailer response towards Spring-Summer 2016. We also expect to significantly enhance our ability to segment the marketplace with greater product ammunition, allowing us to fuel DTC acquisition through differentiation, and expand wholesale doors in a controlled manner as we continue to build awareness and broaden demand for the hookah brand.

Stefano Karate: Franchises.

from a US wholesale perspective, performance continues to reflect our discipline approach to Marketplace management Hook is driving Revenue growth from increased selling

Stefano Karate: Lightning marketplace inventory targets on outgoing models head of product updates.

Stefano Karate: And enhancing our hooker DTC loyalty program to more effectively differentiate the DTC experience.

additional doors with key Partners to satisfy greater intore, demand, and reorders, a sell through in the channel, continue to outpace revenue growth

Stefano Karate: It will take time for the benefits of these actions to meaningfully impact our business.

Stefano Karate: But were confident they will ultimately improve the consumer experience and facilitate more seamless key franchise updates in the future.

Stefano Karate: With respect to our current franchise upgrades the consumer signals, we're seeing for Bondi Clifton and Iraqi are quite positive.

The hookah brands ongoing success with the wholesale Channel. Highlights a continued shift in US, consumer shopping preferences toward in-person retail experiences. Our observations, indicate the world consumers, often search for deals, online brick and mortar stores Remain. The primary venue for full price sales, aligning with the feedback received from our Retail Partners.

Stefano Karate: Bondi Clifton are driving consistent and healthy sell through in the global marketplace across channels and segments of distribution evidenced by representing the top two running franchises in the U S. According to sarcoma, driving very strong reorders and representing the top sellers among acquired and retained customers email.

Our continued journey to thoughtfully. Expand Wholesale Doors plays. Well into the marketplace, Dynamic providing Hoka the opportunity to build share and strengthen Partnerships with key customers.

Stephano Corot: On a much smaller scale. We also continue to selectively expand our own retail locations in key cities around the world.

Stefano Caroti: To that end, you may have seen that just a few weeks ago, HOKA launched its 2025 global brand campaign titled Together We Fly High. The campaign is centered around the power of community and the idea that individual progress is fueled by the collective. This is a principle HOKA has always embraced, as we believe the HOKA community has truly been the driving force behind building this transformational community. Together We Fly Higher celebrates the unifying power of running, highlighted in a new anthem film and an inspiring series of short films that spotlight real stories of running. will amplify this campaign across retail stores, connected TV, out-of-home, digital, and paid social, across HOKA-affiliated social media platforms. Personally, I'm super excited about this campaign.

Stefano Karate: And doubling year over year volumes in China for the spring summer 'twenty five season.

Building off the success of Clifton and Bondi via right. He ate update has also been a success since launching at the beginning of this month.

Stefano Karate: Early feedback in the U S has been very positive on the pro fit and feel.

Stefano Karate: With particularly strong initial selling in the run specialty channel and in DTC EMEA.

as we seek to build direct relationship with consumers and offer experiences, that showcase the full breadth of the Hoka Brands product offering these strategies help Hoka gain visibility and solidify, its position as the leading running brand in the US, although they create short-term pressure on DTC due to our limited retail presence and Reliance on e-commerce over time we expect our DTC business to benefit from the conversion of newly acquired, consumers to Loyal, repeat purchasers

Stefano Karate: EMEA has experienced double digit weekly sell throughs.

in addition to the channel Dynamics affecting Hoka,

Stefano Karate: This launch in China has seen significant volume gains on this model versus last year performing well ahead of plan for the first two weeks of July while still early we're very pleased with initial results.

we have practically identified opportunities for improved execution in response to evolving us. Consumer trends.

Stefano Karate: The consumer is showing a strong affinity for the updates to the hooker brands three largest franchises.

Stephano Corot: Recognizing some of the execution challenges we faced over the last six months. We're implementing changes that include adjusting product life cycles to ensure a steady and balanced introduction of new products across key categories timed to coincide with major shopping period, while providing greater separation between launch dates for our largest.

Stephano Corot: As a relatively young brand Hokah remains committed to applying insights gained from our experiences to drive future growth and development.

Stefano Caroti: I feel the brand has found its voice, and this is the strongest hooker campaign. Overall, Fiscal 26 is off to a very good start for HOKA. Our three largest franchises are performing strongly with consumers. We were expanding the brand's global reach, introducing Hoka footwear to a broader customer.

Stefano Karate: We continue to believe there is more work to be done to build the same heat in other franchises across our compelling product assortment.

Stefano Karate: We believe the hooker brands point of differentiation to the consumer is this relentless focus on innovation that delivers transformational experiences.

Stephano Corot: Franchises.

Stephano Corot: Lightning marketplace inventory targets are now going models head of product updates.

Stefano Caroti: Shifting to our Global revenue in the first quarter increased 19% versus last year to $265 billion. From a channel perspective, I've outperformed whole has also increased 30% versus last year, with consistent growth across the U.S. and international. And DTC decreased 1%. With similar regional dynamics relative to HOKA, we were seeing pressure in the U.S. related to consumer sentiment and in-store shopping preferences offset by continuous strong international growth. The main drivers of our growth this quarter came from our focus International drove the bulk of growth for us this quarter, with EMEA and China contributing the largest year over year.

Stefano Karate: To continue delivering the level of innovation consumers have come to expect from hookup with bolstered capabilities across design innovation color and lifestyle, allowing for greater dedicated resources to enhance a broader range of styles. As a result, we're seeing tangible improvements to the product.

Stephano Corot: And enhancing our hooker DTC loyalty program to more effectively differentiate the DTC experience.

Stephano Corot: Take time for the benefits of these actions to meaningfully impact our business.

Stephano Corot: But were confident they will ultimately improve the consumer experience and facilitate more seamless key franchise updates in the future.

Stefano Karate: Pipeline, which is reflected in the positive retailer response to our spring summer 'twenty six offering.

Stephano Corot: With respect to our current franchise upgrades the consumer signals, we're seeing for Bondi Clifton and Iraqi are quite positive.

Stefano Karate: We also expect to significantly enhance our ability to segment the marketplace with greater product ammunition, allowing us to fuel DTC acquisition through differentiation and expand wholesale doors in a controlled manner as we continue to build awareness and broadened demand for the HOKA brand.

Stephano Corot: Bondi Clifton are driving consistent and healthy sell through in the global marketplace across channels and segments of distribution evidenced by representing the top two running franchises in the U S. According to serve kind of driving very strong reorders and representing the top sellers among acquired and retained customers email.

Stefano Caroti: Men's footwear grew at nearly twice the overall brand rate, and sandal and sneaker styles drove most of the growth, reflecting the success of Uggs 365. Although Q1 is primarily a selling quarter for the brand, we're encouraged by the robust start in wholesale. Positive Early Indicator of Consumer Interest as Partners Look to Accelerate Change. Ike products continue to gain relevance during transitional periods, reflecting the brand's ongoing success in developing collections that align with consumer preferences. Furthermore, we're particularly optimistic about the consistency of what has been working in key regions around the world. Jet Team has effectively implemented a brand-led global marketplace strategy delivering elevated experiences through distinctive products around the world.

Stefano Karate: With that and you may have seen just a few weeks ago Hooker launch is 2025 global brand campaign titled together, we fly higher the campaign centered around the power of community and the idea of the individual progress is fueled by the collective. This is the principle hook has always embraced as we believe the hooker community has truly been the.

Stephano Corot: And doubling year over year volumes in China for the spring summer 'twenty five season.

Stephano Corot: Building off the success of Clifton and Bondi Euro. He ate update has also been a success since launching at the beginning of this month.

Stefano Karate: Driving force behind building this transformational Brad.

Stephano Corot: Early feedback in the U S has been very positive on the pro fit and feel with particularly strong initial selling in the run specialty channel and in DTC EMEA.

Stefano Karate: Together, we fly higher celebrates the unifying power of running highlighted in the new anthem film and an inspiring series of short films the spotlight real stories of runners.

Stephano Corot: EMEA has experienced double digit weekly sell throughs.

Amplify this campaign across retail stores connected to be out of home digital and paid social across hook affiliated social media platforms.

Stephano Corot: This launch in China has seen significant volume gains on this model versus last year performing well ahead of plan for the first two weeks of July while still early we're very pleased with initial results.

Stefano Karate: Personally I'm Super excited about this campaign I feel the brand as far as voice and this is strongest hooker campaign to date.

Stefano Caroti: VIAG's brand focus on telling fewer, more targeted stories to amplify launches is demonstrating measurable success. The consumer response to the peak mod style is a perfect example of the team's efforts in driving positive results. The Peak Mod is a completely new men's specific log that takes design cues from popular Ag styles. It initially self-launched in March on the heels of our first ever men's focus spring marketing campaign. It was then featured as part of our seasonal Icons We Imagine marketing campaign. This versatile style quickly became a male consumer favorite across the U.S., EMEA, and China, even earning placement in major fashion publications as a go-to style for more and more of their customers.

Stephano Corot: The consumer is showing a strong affinity for the updates to the hooker brands three largest franchises.

Stefano Karate: Overall fiscal 'twenty six is off to a very good start for HOKA. Our three largest franchises are performing strongly with consumers and we're expanding the brand's global reach introducing hooker footwear to a broader customer base.

Stephano Corot: We continue to believe there's more work to be done to build the same heat in other franchises across our compelling product assortment.

Stephano Corot: We believe the HOKA brand's point of differentiation to the consumer is this relentless focus on innovation that delivers transformational experiences.

Stefano Karate: Shifting to AGA global revenue in the first quarter increased 19% versus last year to $265 million.

Stephano Corot: To continue delivering the level of innovation consumers have come to expect from hookup with bolstered capabilities across design innovation color and lifestyle, allowing for greater dedicated resources to enhance a broader range of styles. As a result, we're seeing tangible improvements to the product.

Stefano Karate: From a channel perspective outperforming wholesale.

Stefano Karate: Wholesale increased 30% versus last year with consistent growth across the U S and international regions.

Stefano Karate: And DTC decreased 1% with similar regional dynamics relative to hookup, where we're seeing pressure in the U S related to consumer sentiment and in store shopping preferences offset by continued strong international growth momentum.

Stefano Caroti: We believe there are four key reasons for the... Infusing ad brand codes into a versatile design. Leveraging consumer insights early and frequently. continue to edit the assortment to allow for more focused seasonal stories in pursuing a long-term strategy to acquire more male consumers. With respect to our 365 initiative, AGA achieved strong global growth within the sandal and sneaker segments through the following. The Golden Collection, which generated significant consumer interest, particularly in the new Golden Star Glide and Villa styles that commanded high retail prices compared to existing models. and the Lomel franchise, which effectively blends the distinctive aesthetic and comfort with adaptable wearability.

Stephano Corot: Pipeline, which is reflected in the positive retailer response towards spring summer 'twenty six offering.

Stefano Karate: The main drivers of our growth this quarter came from our focus areas.

Stephano Corot: We also expect to significantly enhance our ability to segment the marketplace with greater product ammunition, allowing us to fuel DTC acquisition through differentiation and expand wholesale doors in a controlled manner as we continue to build awareness and broadened demand for the HOKA brand.

Stefano Karate: International drove the bulk of growth for August quarter, with EMEA, and China contributing the largest year over year gains.

Stefano Karate: Men's footwear grew at nearly twice the overall brand right and Samuel Sneaker styles drove most of the growth, reflecting the success of 365 initiatives.

Stephano Corot: Does that end you may have seen just a few weeks ago Hooker launch is 2025 global brand campaign titled together, we fly higher the campaign centered around the power of community and the idea of the individual progress is fueled by the collective. This is the principle hook has always embraced as we believe the hooker community, it's really been the.

Stefano Karate: Though Q1 is primarily selling quarter for the brand. We're encouraged by the robust start in wholesale a positive early indicator of consumer interest as partners look to accelerate shipments.

Stefano Karate: <unk> products continue to gain relevance doing transitional periods, reflecting the brand's ongoing success in developing collections that align with consumer preferences.

Stefano Caroti: as we move into late summer and early fall. Despite ongoing concerns affecting the U.S. consumer sentiment. Jack Brand is strategically positioned within the global marketplace to achieve growth in the second half of calendar year. To provide more context, we have operated with lean marketplace inventory for the Tasman franchise, maintaining scarcity ahead of its core selling season. In addition, AG will be launching its iconic design campaign to build heat and generate buzz for versatile footwear in advance for AG's future. with activation planned in key cities. UGG begins this transitional period with three key product stories leveraging its iconic mustard seed colorway on key styles including the Lomel sneaker I break clog in all-new classic.

Stephano Corot: Driving force behind building this transformational breath.

Stefano Karate: Furthermore, we're particularly optimistic about the consistency of what has been working in key regions around the world.

Stephano Corot: Together, we fly higher celebrates the unifying power of running highlighted either do anthem film and an inspiring series of short films the spotlight real stories of runners.

Stefano Karate: The <unk> team has effectively implemented a brand led global marketplace strategy delivering elevated experiences through distinctive and products around the world.

Stephano Corot: Amplify this campaign across retail stores connected to be out of home digital and paid social across hook affiliated social media platforms.

Stefano Karate: UGG brand focus on telling fewer more targeted stories to amplify it launches is demonstrating measurable success.

Speaker Change: Personally I'm Super excited about this campaign I feel the brand as far as voice and this is strongest hooker campaign today.

Stefano Karate: Consumer response to the peak months style is a perfect example of the team's efforts in driving positive results.

Speaker Change: Overall fiscal 'twenty six is off to a very good start for our three largest franchises are performing strongly with consumers.

Stefano Karate: The Piedmont is a completely new men's specific Claude that takes design cues from popular styles.

Speaker Change: We're expanding the brand's global reach introducing hooker footwear to a broader customer base.

Stefano Karate: Initially soft launch in March on the heels of our first ever men's focused spring marketing campaign it.

Speaker Change: Shifting to AGA global revenue in the first quarter increased 19% versus last year to $265 million from.

Stefano Caroti: Early feedback on all three styles is very positive, and we anticipate more exciting UGG launches.

Stefano Karate: It was then featured as part of our seasonal icons of imagine marketing campaign. This versatile style quickly became a male consumer favorite across the U S EMEA and China, even earning placement in major fashion publications as they go to style for more and more of our tire.

Stefano Caroti: The Viette team executed the first quarter very well, reinforcing our confidence in achieving another strong year for the...

Speaker Change: From a channel perspective outperforming wholesale.

Speaker Change: As wholesale increased 30% versus last year with consistent growth across the U S and international regions.

Steve Fasching: With that, I'll now hand it over to Steve to provide further details on our first quarter results, as well as our updated thoughts around fiscal year 2020. Thanks, Stefano, and good afternoon, everyone. Deckers again delivered another quarter of strong results that came in above our expectations for the first quarter. As Stefano outlined, both HOKA and UGG experienced significant growth in the quarter, with the wholesale channel being the primary driver. For HOKA, sell-in was strong as sell-through in the wholesale channel was very healthy. In addition, international DTC delivered robust growth as we continue to build brand awareness and grow market share.

Speaker Change: And DTC decreased 1% with similar regional dynamics relative to hookup, where we're seeing pressure in the U S related to consumer sentiment and in store shopping preferences offset by continued strong international growth momentum.

Stefano Karate: We believe there are four key reasons for the success.

Stefano Karate: Using <unk> codes into our versatile design leveraging consumer insights early infrequently continue to edit the assortment to allow for more focused seasonal stories and pursuing our long term strategy to acquire more male consumers.

Speaker Change: The main drivers of our growth this quarter came from our focus areas.

Speaker Change: International drove the bulk of growth for August quarter, we demand, China contributing the largest year over year gains.

Stefano Karate: With respect to our 365 initiative I got shoved strong global growth within the sandal and stinker segments through the following the Golden collection, which generated significant consumer interest, particularly in the new Golden Star glide and Villa styles, the commanded higher retail prices compare to existing silhouette and the low mail franchise, which effectively blends.

Speaker Change: Men's footwear grew at nearly twice the overall brand right and sandals and sneakers styles drove most of the growth, reflecting the success of 365 initiatives.

Speaker Change: Although Q1 is primarily selling quarter for the brand. We're encouraged by the robust start in wholesale a positive early indicator of consumer interest as partners look to accelerate shipments.

Steve Fasching: For UGG, growth was also driven by the Wholesale Channel, as the brand experienced success with versatile year-round styles, refilled depleted inventory levels, and started fulfilling fall order books.

Stefano Karate: The distinctive August static and comfort with adaptable wearability.

Stefano Karate: As we move into late summer and early fall despite ongoing concerns affecting the U S consumer sentiment ZG.

Speaker Change: <unk> products continue to gain relevance during transitional periods, reflecting the brand's ongoing success in developing collections that align with consumer preferences.

Steve Fasching: While macroeconomic uncertainty continues, our teams are directly engaged to drive improvements across our business, identifying and implementing actions that are aligned with and have the ability to bolster our long-term strategic opportunities. We believe our disciplined operating model and strong financial framework positions us well to remain nimble and react appropriately to further changes in the dynamic consumer environment.

Stefano Karate: <unk> brand is strategically positioned within the global marketplace to achieve growth in the second half of calendar year 'twenty five.

Stefano Karate: To provide more context, we've operated with lean marketplace inventory for the Tasman franchise maintained its scarcity.

Speaker Change: Furthermore, we're particularly optimistic about the consistency of what has been working in key regions around the world.

Stefano Karate: It's of course selling season. In addition, I could be launching its iconic design campaign to build heat and generate buzz for versatile footwear in advance for AG season with activation planned in key cities around the world.

Speaker Change: The <unk> team has effectively implemented a brand led global marketplace strategy delivering elevated experiences through distinctive and products around the world.

Speaker Change: <unk> focus on telling fewer more targeted stories to amplify launches is demonstrating measurable success.

Steve Fasching: We are excited about the tremendous growth opportunity ahead for both HOKA and UGG and will continue to build upon the rock-solid foundation we have set over the last few years.

Stefano Karate: Begins this transitional period with three key product stories, leveraging its iconic mustard seed color way on key styles, including the low milk sneaker.

Speaker Change: The consumer response to the peak months style is a perfect example of the team's efforts in driving positive results.

Steve Fasching: With that, let's get into the details of our first quarter fiscal year 2026. Total company revenue was $965 million, up 17% versus the prior year. OCA drove the majority of incremental dollar volume, adding $108 million of revenue versus last year to deliver record quarterly revenue of $653 million. outdrove its largest June-ended quarter in history, contributing an incremental $42 million to deliver $265 million of first-quarter revenue. Gross margin for the quarter was 55.8%, which is down 110 basis points from last year's 56.9%. As compared to last year, first quarter gross margin was impacted by unfavorable channel mix with wholesale growing faster than DTC, increased promotion across UGG and HOKA as we anticipated, and higher freight.

Speaker Change: I break clog.

Speaker Change: The Piedmont is a completely new men's specific clogged the peaks design cues from popular styles.

Stefano Karate: And all new classic micro <unk>.

Speaker Change: Early feedback on all three styles is very positive and we anticipate more exciting launches. This fall as yet team executed in the first quarter very well reinforcing our confidence in achieving another strong year for this powerful brand.

Speaker Change: Actually soft launch in March on the heels of our first ever men's focused spring marketing campaign it.

Speaker Change: It was then featured as part of our seasonal icons of imagine marketing campaign. This versatile style quickly became a male consumer favorite across the U S EMEA and China, even earning placement in major fashion publications as they go to style for more and more of our tire.

Speaker Change: With that I'll now hand over to Steve to provide further details on our first quarter results as well as our updated thoughts around fiscal year 2026.

Steve Fasching: Thanks, Stefano and good afternoon, everyone.

Speaker Change: We believe there are four key reasons for the success.

Steve Fasching: <unk> again delivered another quarter of strong results that came in above our expectations for the first quarter.

Speaker Change: Using our brand codes into our versatile design leveraging consumer insights early infrequently continue to edit the assortment to allow for more focus seasonal stories and pursuing our long term strategy to acquire more male consumers.

Steve Fasching: As Stefano outlined both HOKA and UGG experienced significant growth in the quarter with the wholesale channel being the primary driver for.

Steve Fasching: For Hooker selling was strong sell through in the wholesale channel was very healthy. In addition international DTC delivered robust growth as we continue to build brand awareness and grow market share.

Speaker Change: With respect to our 365 initiative I got shoved strong global growth within the sandal and sneaker segments through the following the Golden collection, which generated significant consumer interest, particularly in the new Golden Star glide and Villa styles, the commanded higher retail prices compare to existing silhouette and the low mail franchise, which effectively blends.

Steve Fasching: <unk> growth was also driven by the wholesale channel as the brand experienced success with versatile year round styles refilled depleted inventory levels and started fulfilling fall order books.

Steve Fasching: with partial offsets from Favorable Product Mix and Favorable Foreign Currency Exchange. SG&A dollar spend in the first quarter was $373 million, which is up 11% from last year's $337 million. As a percentage of revenue, SG&A was 38.6% versus 40.9% in the prior year, with leverage driven by favorable timing of certain expenses and one-time benefits in the quarter. SG&A dollar growth compared to last year was driven by investment in key areas of the business in support of our growth initiatives, which includes higher marketing spend for HOCA and UGG, increased warehouse costs as we transitioned our EMEA third-party logistics provider, and greater rent expense resulting from select retail store expansion.

Speaker Change: The distinctive static and comfort with the Doctor boat Wearability.

Speaker Change: As we move into late summer and early fall despite ongoing concerns affecting the U S consumer sentiment zagged.

Steve Fasching: While macroeconomic uncertainty continues our teams are directly engaged to drive improvements across our business identifying and implementing actions that are aligned with and have the ability to bolster our long term strategic opportunities.

Speaker Change: <unk> brand is strategically positioned within the global marketplace to achieve growth in the second half of calendar year 'twenty five.

Speaker Change: To provide more context, we've operated with lean marketplace inventory for the Tasman franchise maintained its scarcity.

Steve Fasching: We believe our disciplined operating model and strong financial framework positions us well to remain nimble and react appropriately to further changes in the dynamic consumer environment.

Speaker Change: It's of course selling season. In addition, I could be launching its iconic design campaign to build heat and generate buzz for versatile footwear in advance for AG season with activation planned in key cities around the world.

Steve Fasching: We are excited about the tremendous growth opportunity ahead for both HOKA and <unk> and will continue to build upon the rock solid foundation, we have set over the last few years.

Speaker Change: It begins this transitional period with three key product stories, leveraging its iconic mustard seed colourway on key styles, including the low milk sneaker.

Steve Fasching: With that let's get into the details of our first quarter fiscal year 2026 results.

Steve Fasching: Total company revenue was $965 million up 17% versus the prior year.

Speaker Change: I break clog.

Steve Fasching: Our tax rate was 24%, which was slightly higher than last year's 22.5% due to one-time discrete tax items. These results, coupled with a lower share count as the result of our share repurchase program and higher interest income, net of higher tax rate, drove diluted earnings per share of $0.93 for the quarter, which compares to $0.75 in the prior year period, representing growth of 24%. In terms of our first quarter performance, relative to the high end of our guidance provided in May, revenue came in approximately $55 million above expectation, driven by approximately $25 million of earlier OCA wholesale shipments, largely related to our international business as we transition certain warehousing operation for the EMEA region.

Speaker Change: And all new classic micro <unk>.

Steve Fasching: <unk> drove the majority of incremental dollar volume, adding $108 million of revenue versus last year to deliver record quarterly revenue of $653 million.

Speaker Change: With that I'll now hand over to Steve to provide further details on our first quarter results as well as our updated thoughts around fiscal year 2036.

Steve Fasching: <unk> drove its largest June ended quarter in history, contributing an incremental $42 million to deliver $265 million of first quarter revenue.

Steve Fasching: Thanks, Stefano and good afternoon, everyone.

Steve Fasching: <unk> again delivered another quarter of strong results that came in above our expectations for the first quarter.

Steve Fasching: Gross margin for the quarter was 55, 8%, which is down 110 basis points from last year's 56, 9%.

Steve Fasching: As Stefano outlined both HOKA and UGG experienced significant growth in the quarter with the wholesale channel being the primary driver for.

Steve Fasching: As compared to last year first quarter gross margin was impacted by unfavorable channel mix with wholesale growing faster than DTC increased promotion across <unk> and <unk> as we anticipated and higher freight rates with partial offsets from favorable product mix and favorable foreign currency.

Steve Fasching: Approximately $15 million of incremental wholesale reorders for HOKA related to strong sell-through. and approximately $15 million of UGH wholesale shipments from an earlier shift into Q1 from planned in Q2. Gross margin came in approximately 130 basis points better than expected primarily due to product mixed benefits and favorable foreign currency exchange rates. SG&A grew slower than we anticipated, primarily due to favorable timing of certain expenses and one-time items, including a larger benefit from FX remeasuring. all resulting in a diluted earnings per share coming in approximately $0.26 above guidance with better performance contributing approximately $0.15 of favorability and timing contributing approximately $0.11 of favorability.

Speaker Change: <unk> growth was also driven by the wholesale channel as the brand experienced success with versatile year round styles refilled depleted inventory levels and started fulfilling fall order books.

Steve Fasching: Exchange rates.

Steve Fasching: SG&A dollar spend in the first quarter was $373 million, which is up 11% from last year's $337 million as.

Speaker Change: While macroeconomic uncertainty continues and our teams are directly engaged to drive improvements across our business identifying and implementing actions that are aligned with and have the ability to bolster our long term strategic opportunities.

Steve Fasching: As a percentage of revenue SG&A was 38, 6% versus 49% in the prior year with leverage driven by favorable timing of certain expenses and one time benefits in the quarter.

Speaker Change: We believe our disciplined operating model and strong financial framework positions us well to remain nimble and react appropriately to further changes in the dynamic consumer environment.

Steve Fasching: SG&A dollar growth compared to last year was driven by investment in key areas of the business in support of our growth initiatives, which includes higher marketing spend for HOKA and UGG increased warehouse costs as we transitioned our EMEA third party logistics provider and greater rent expense, resulting from solar.

Speaker Change: We are excited about the tremendous growth opportunity ahead for both HOKA and <unk> and will continue to build upon the rock solid foundation, we have set over the last few years.

Steve Fasching: <unk> retail store expansion.

Speaker Change: With that let's get into the details of our first quarter fiscal year 2026 results.

Steve Fasching: Our tax rate was 24%, which was slightly higher than last year's 22, 5% due to onetime discrete tax items.

Steve Fasching: We did not experience a material impact from tariffs in the first quarter because the majority of products sold was either already in inventory or shipped prior to tariffs taking effect. In addition, we implemented selective initial price increases, which went into effect on July 1st and provided no meaningful benefit in the quarter. As a reminder, we plan to phase in product price increases over the course of fiscal year 2026. So the associated margin benefit intended to partially offset tariff headwinds would not align precisely with the timing of tariff-driven increases in the cost of goods.

Speaker Change: Total company revenue was $965 million up 17% versus the prior year Oka drove the majority of incremental dollar volume, adding $108 million of revenue versus last year to deliver record quarterly revenue of $653 million.

Steve Fasching: These results coupled with a lower share count as the result of our share repurchase program and higher interest income net of higher tax rate drove diluted earnings per share of 93 for the quarter, which compares to <unk> 75 in the prior year period, representing growth of 24%.

Speaker Change: Drove its largest June ended quarter in history, contributing an incremental $42 million to deliver $265 million a first quarter revenue.

Steve Fasching: In terms of our first quarter performance relative to the high end of our guidance provided in May revenue came in approximately $55 million above expectation driven by approximately $25 million of earlier OCA wholesale shipments largely related to our international business as we.

Speaker Change: Gross margin for the quarter was 55, 8%, which is down 110 basis points from last year's 56, 9%.

Steve Fasching: Turning to our balance sheet, at June 30, 2025, we ended June with $1.7 billion of cash and equivalent. Inventory was $849 million, up 13% versus the same point in time last year, and we had no outstanding borrow. During the first quarter, we repurchased approximately $183 million worth of shares at an average price per share of $109.84. As of June 30, 2025, the company had approximately $2.4 billion remaining under its stock repurchase authorization.

Speaker Change: As compared to last year first quarter gross margin was impacted by unfavorable channel mix with wholesale growing faster than DTC increased promotion across <unk> and <unk> as we anticipated and higher freight rates with partial offsets from favorable product mix and favorable foreign currency.

Steve Fasching: <unk> certain warehousing operation for the EMEA region.

Steve Fasching: Approximately $15 million of incremental wholesale reorders for hooker related to strong sell through.

Steve Fasching: And approximately $15 million of wholesale shipments from an earlier shift into Q1 from planned in Q2.

Speaker Change: Exchange rates.

Speaker Change: SG&A dollar spend in the first quarter was $373 million, which is up 11% from last year's $337 million.

Steve Fasching: Gross margin came in approximately 130 basis points better than expected, primarily due to product mix benefits and favorable foreign currency exchange rates.

Speaker Change: As a percentage of revenue SG&A was 38, 6% versus 49% in the prior year with leverage driven by favorable timing of certain expenses and one time benefits in the quarter.

Steve Fasching: SG&A grew slower than we anticipated primarily due to favorable timing of certain expenses and onetime items, including a larger benefit from FX remeasurement.

Steve Fasching: Now, moving into our forward-looking update.

Steve Fasching: Given the continued macroeconomic uncertainty related to the global trade policy and difficulty predicting impact on the consumer environment and purchasing behavior, we are not providing a formal outlook for fiscal year 2026. However, I want to reiterate the key themes of our business and framework for fiscal year 2020. As a reminder, our Fiscal Year 2026 framework includes the following. From a revenue perspective, we expect HOKA to continue as our fastest growing brand, UGG continuing to grow, International to outpace U.S. growth, and Wholesale to outpace DTC in the near term. From a gross margin perspective, we expect a year-over-year decline from headwinds that include increased tariffs, higher levels of promotion, upgraded materials on key styles, and higher ocean freight rates in the first We believe these headwinds can be partially offset by selective and staggered price increases in the U.S., and partial cost sharing with factory partners.

Speaker Change: SG&A dollar growth compared to last year was driven by investment in key areas of the business in support of our growth initiatives, which includes higher marketing spend for HOKA and UGG increased warehouse costs as we transitioned our EMEA third party logistics provider and greater rent expense, resulting from <unk>.

Steve Fasching: All resulting in a diluted earnings per share coming in approximately 26 cents above guidance with better performance contributing approximately 15 sensitive favorability and timing contributing approximately 11 of favorability.

Speaker Change: <unk> retail store expansion.

Speaker Change: Our tax rate was 24%, which was slightly higher than last year's 22, 5% due to onetime discrete tax items.

Speaker Change: These results coupled with a lower share count as the result of our share repurchase program and higher interest income net of higher tax rate drove diluted earnings per share of 93 for the quarter, which compares to <unk> 75 in the prior year period, representing growth of 24%.

Steve Fasching: <unk> no meaningful benefit in the quarter.

Steve Fasching: As a reminder, we plan to phase in product price increases over the course of fiscal year 2026.

Steve Fasching: So the associated margin benefit intended to partially offset tariff headwinds would not align precisely with the timing of tariff driven increases in the cost of goods sold.

Speaker Change: In terms of our first quarter performance relative to the high end of our guidance provided in May revenue came in approximately $55 million above expectations, driven by approximately $25 million of earlier OCA wholesale shipments largely related to our international business as we.

Steve Fasching: Turning to our balance sheet at June 32025, we ended June with $1 7 billion of cash and equivalents inventory was $849 million up 13% versus the same point in time last year, and we had no outstanding borrowings.

Steve Fasching: On the SG&A front, we will continue to tightly manage our expenses and drive efficiencies, but we may deliver a short-term increase in our SG&A expense ratio to revenue as we take advantage of our unique ability to invest in our brands for the longer term. Overall, this should lead us to a lower operating margin relative to our record 23.6 percent delivered in fiscal year 2025. With a normalized consumer environment, we believe we have the ability to deliver leverage in the coming year. On tariffs, we are still awaiting final details, but based on the recent updates, assuming Vietnam increases from 10% to 20%, we would expect to face a total of $185 million of unmitigated impact to our cost of goods sold in fiscal year 2026.

Speaker Change: <unk> certain warehousing operation for the EMEA region.

Speaker Change: Approximately $15 million of incremental wholesale reorders for HOKA related to strong sell through.

Steve Fasching: During the first quarter, we repurchased approximately $183 million worth of shares at an average price per share of $109 84.

Speaker Change: And approximately $15 million of wholesale shipments from an earlier shift into Q1 from planned in Q2.

As of June 32025, the company had approximately $2 4 billion remaining under its stock repurchase authorization.

Speaker Change: Gross margin came in approximately 130 basis points better than expected, primarily due to product mix benefits and favorable foreign currency exchange rates.

Steve Fasching: Now moving into our forward looking update given the continued macroeconomic uncertainty related to the global trade policy and difficulty predicting impact on the consumer environment in purchasing behavior, we are not providing a formal outlook for fiscal year 2026, However, I want to reiterate.

Speaker Change: SG&A grew slower than we anticipated primarily due to favorable timing of certain expenses and onetime items, including a larger benefit from FX remeasurement.

Steve Fasching: up from our previously provided estimate of up to $150 million. As we said last quarter, we put in measures to recapture up to approximately $75 million and will continue to evaluate additional levers for potential further mitigation. One of our mitigating levers is price adjustments. Since our last call, the majority of these have been communicated. And I would note that we have not seen any material changes to our order book resulting from these increases.

Speaker Change: All resulting in a diluted earnings per share coming in approximately 26 cents above guidance with better performance contributing approximately 15 sensitive favorability and timing contributing approximately 11 of favorability.

Steve Fasching: Hit the key themes of our business and framework for fiscal year 2026.

Steve Fasching: As a reminder, our fiscal year 2026 framework includes the following.

Steve Fasching: From a revenue perspective, we expect <unk> to continue as our fastest growing brand.

Speaker Change: We did not experience a material impact from tariffs in the first quarter because the majority of products sold was either already in inventory or shipped prior to tariffs taking effect. In addition, we implemented selective initial price increases which went into effect on July one and <unk>.

Steve Fasching: Continuing to grow international to outpaced U S growth in wholesale to outpace DTC in the near term.

Steve Fasching: From a gross margin perspective, we expect a year over year decline from headwinds that include increased tariffs higher levels of promotion upgraded materials on key styles and higher ocean freight rates in the first half.

Steve Fasching: Similar to our approach last quarter, as we continue to operate in a period of elevated macro uncertainty, we will be providing an outlook for the quarter ending September 30. For the second quarter of our fiscal year 2026, we expect revenue in the range of $1.38 billion to $1.42 billion, with HOCA increasing approximately 10%, reflecting our earlier Q1 wholesale shipments, and UGG increasing at least mid-single-day. Gross margin is expected to be in the range of 53.5% to 54%, which is down versus the prior year, primarily due to increased tariffs for goods shipped into the US, increased promotional activity as we lap exceptionally low levels in the prior year, and higher freight costs expensed relative to last year's low levels that we signaled would be not sustainable.

Speaker Change: <unk> no meaningful benefit in the quarter.

Speaker Change: As a reminder, we plan to phase in product price increases over the course of fiscal year 2026. So the associated margin benefit intended to partially offset tariff headwinds would not align precisely with the timing of tariff driven increases in the cost of goods sold.

Steve Fasching: We believe these headwinds can be partially offset by selective and staggered price increases in the U S and partial cost sharing with factory partners.

Steve Fasching: On the SG&A front, we will continue to tightly manage our expenses and drive efficiencies, but we may deliver a short term increase in our SG&A expense ratio to revenue as we take advantage of our unique ability to invest in our brands for the longer term.

Speaker Change: Turning to our balance sheet at June 32025, we ended June with $1 7 billion of cash and equivalents inventory was $849 million up 13% versus the same point in time last year, and we had no outstanding borrowings.

Steve Fasching: Overall, this should lead us to a lower operating margin relative to a record 23, 6% delivered in fiscal year 2025, with a normalized consumer environment. We believe we have the ability to deliver leverage in the coming years.

Speaker Change: During the first quarter, we repurchased approximately $183 million worth of shares at an average price per share of $109 84.

Steve Fasching: with partial offsets from our initial price increases that went into effect on July 1st. SG&A is expected to be approximately 33.5% of revenue as we continue investing in brand building marketing and diluted earnings per share are expected to be in the range of $1.50 to $1.55 as compared to last year's $1.59.

Steve Fasching: On tariffs, we are still awaiting final details, but based on the recent updates assuming Vietnam increases from 10% to 20%, we would expect to face a total of $185 million of unmitigated impact to our cost of goods sold in fiscal year 2026 up from our <unk>.

Speaker Change: As of June 32025, the company had approximately $2 $4 billion remaining under its stock repurchase authorization.

Speaker Change: Now moving into our forward looking update given the continued macroeconomic uncertainty related to the global trade policy and difficulty predicting impact on the consumer environment in purchasing behavior, we are not providing a formal outlook for fiscal year 2026, However, I want to reiterate.

Steve Fasching: Previously provided estimate of up to $150 million.

Steve Fasching: As we said last quarter, we put in measures to recapture up to approximately $75 million.

Steve Fasching: Overall, the performance of our brands in the first quarter gives us further confidence in our ability to continue to grow these brands. We are operating from a position of strength as our in-demand brands resonate with consumers worldwide. And we remain driven by our long-term focus.

Speaker Change: <unk> the key themes of our business and framework for fiscal year 2026.

Steve Fasching: And we'll continue to evaluate additional levers for potential further mitigation.

Speaker Change: As a reminder, our fiscal year 2026 framework includes the following.

Steve Fasching: One of our mitigating levers is price adjustments since our last call. The majority of these have been communicated and I would note that we have not seen any material changes to our order book, resulting from these increases.

Speaker Change: From a revenue perspective, we expect <unk> to continue as our fastest growing brand.

Steve Fasching: Our top-tier levels of profitability, free cash flow, and debt-free balance sheet allow us to continue fueling the long-term opportunities ahead while maintaining an ability to adapt to evolving dynamics.

Speaker Change: Continuing to grow international to outpaced U S growth and wholesale to outpace DTC in the near term.

Steve Fasching: Similar to our approach last quarter as we continued to operate in a period of elevated macro uncertainty, we will be providing an outlook for the quarter ending September 30th.

Speaker Change: From a gross margin perspective, we expect a year over year decline from headwinds that include increased tariffs higher levels of promotion upgraded materials on key styles and higher ocean freight rates in the first half.

Steve Fasching: Thanks everyone.

Stefano Caroti: I'll now hand the call back to Stefano for his final remarks. Thank you, Steve. As we've just covered, our brands are off to a solid start in fiscal year 2020. Both Hoka and UGG delivered growth above expectations. and above the four-year growth rates we are targeting prior to tariff uncertainty. Of course, we're mindful that consumers are just beginning to feel the impact of a higher price. and we'll remain nimble to react to changes in the consumer environment. But we're encouraged by the current momentum of our. Though the vast majority of our year is still to come, our confidence in these brands remains high, given the performance and the momentum of the business as we see it.

Steve Fasching: For the second quarter of our fiscal year 2026, we expect revenue in the range of 1.38 billion to 142 billion with hooker, increasing approximately 10%, reflecting our earlier Q1 wholesale shipments and <unk> increasing at least.

Speaker Change: We believe these headwinds can be partially offset by selective and staggered price increases in the U S and partial cost sharing with factory partners.

Speaker Change: On the SG&A front, we will continue to tightly manage our expenses and drive efficiencies, but we may deliver a short term increase in our SG&A expense ratio to revenue as we take advantage of our unique ability to invest in our brands for the longer term.

Steve Fasching: Mid single digits.

Steve Fasching: Gross margin is expected to be in the range of 53, 5% to 54%, which is down versus the prior year, primarily due to increased tariffs for goods shipped into the U S increased promotional activity as we lap exceptionally low levels in the prior year and higher freight costs Expensed relative.

Speaker Change: Overall, this should lead us to a lower operating margin relative to a record 23, 6% delivered in fiscal year 2025, with a normalized consumer environment. We believe we have the ability to deliver leverage in the coming years.

Stefano Caroti: and the opportunities ahead are immense. Hoka and Ag continue to create distinctive products that uniquely resonate with consumers. and both have significant potential to gain market share in growing global. We continue to challenge ourselves to compete with our own success. building our innovation pipeline to fuel our powerful brands and stay ahead of the competition. As we continue navigating this period of uncertainty, we'll lean on our strong fundamentals to position our brands for long-term.

Steve Fasching: Two last year's low levels that we signaled would be not sustainable with partial offsets from our initial price increases that went into effect on July one.

Speaker Change: On tariffs, we are still awaiting final details, but based on the recent updates assuming Vietnam increases from 10% to 20%, we would expect to face a total of $185 million of unmitigated impact to our cost of goods sold in fiscal year 2026 up from our <unk>.

Steve Fasching: SG&A is expected to be approximately 33, 5% of revenue as we continue investing in brand building marketing.

Steve Fasching: Diluted earnings per share are expected to be in the range of $1 50.

Steve Fasching: Two $1 55, as compared to last year's $1 59.

Stefano Caroti: I want to thank our dedicated global team for their continued efforts to execute our strategy as we create the future for them. Thank you all for joining us today and thank you to our shareholders for your continued support.

Speaker Change: Previously provided estimate of up to $150 million.

Overall, the performance of our brands in the first quarter gives us further confidence in our ability to continue to grow these brands.

Speaker Change: As we said last quarter, we put in measures to recapture up to approximately $75 million and we'll continue to evaluate additional levers for potential further mitigation.

Operator: And with that, I'll turn the call over to the operator. Ladies and gentlemen, in order to ask a question, please press star, followed by the number one on your telephone keypad.

Steve Fasching: We are operating from a position of strength as our in demand brands resonate with consumers worldwide and we remain driven by our long term focus our top tier levels of profitability free cash flow and debt free balance sheet allow us to continue fueling the long term opportunities ahead, while maintaining an <unk>.

Speaker Change: One of our mitigating levers is price adjustments since our last call. The majority of these have been communicated and I would note that we have not seen any material changes to our order book, resulting from these increases.

Operator: We ask that all participants limit themselves to one question and one follow-up question.

Jay Sole: Your first question comes from the line of Jay Sole with UBS. Please go ahead. Great. Thank you so much. I want to ask about HOKA. Maybe to start off, Steve, if you could talk about, you know, the second quarter guidance you gave for the company overall, and you gave HOKA up 10%. Can you just talk about how you feel about the wholesale channel versus VTC channel? And then on the inventory, can you just tell us, you know, where it stands with the Bondi 8 and the Clifton 9, some of the previous styles? Do you think it's completely out of the channels for the most part at this point?

Steve Fasching: <unk> to adapt to evolving dynamics.

Speaker Change: Similar to our approach last quarter as we continue to operate in a period of elevated macro uncertainty, we will be providing an outlook for the quarter ending September 30th.

Stefano Karate: Thanks, everyone I'll now hand, the call back to Stefano for his final remarks.

Steve Fasching: Steve as we've just covered our brands are off to a solid start in fiscal 'twenty six.

Speaker Change: For the second quarter of our fiscal year 2026, we expect revenue in the range of 1.38 billion to 142 billion with HOKA, increasing approximately 10%, reflecting our earlier Q1 wholesale shipments and <unk> increasing at least.

Steve Fasching: Both HOKA and UGG delivered growth above expectations for Q1 and above the full year growth rates, we're targeting prior to tariff uncertainty.

Speaker Change: Of course, we're mindful of the consumers that are just beginning to feel the impact of higher prices.

Speaker Change: We will remain nimble to react to changes in the consumer environment, but we are encouraged by the current momentum of our brands.

Steve Fasching: And then Stefano, just on the innovation you mentioned, need to talk about the pipeline a little bit, talk about some of the stuff that's coming later this year, like the mock and maybe what has you really excited about next year, calendar 26, that investors should be focused on. Thank you. Got it. All right. Thanks, Jay. Yeah, I think if we think about the 10% growth, we're taking into account clearly some of the international timing on the hotel distributor orders that we fulfilled in Q1 that originally we thought might go Q2. So when you adjust for that, we're still in that mid-teen for the first half of the year growth for the Hoka brand.

Speaker Change: Mid single digits.

Speaker Change: Gross margin is expected to be in the range of 53, 5% to 54%, which is down versus the prior year, primarily due to increased tariffs for goods shipped into the U S increased promotional activity as we lap exceptionally low levels in the prior year and higher freight costs expense.

Speaker Change: Though the vast majority of our year is still to come our confidence in these brands remains high given the performance and the momentum of the business as we see it today.

Speaker Change: The opportunities ahead are immense.

Speaker Change: <unk> and <unk>.

Speaker Change: To create distinctive products, the uniquely resonate with consumers and.

Speaker Change: And both have significant potential to gain market share and growing global segments.

Speaker Change: <unk> to last year's low levels that we signaled would be not sustainable with partial offsets from our initial price increases that went into effect on July one.

Speaker Change: We continue to challenge ourselves to compete with our own success building, our innovation pipeline to fuel our powerful brands and stay ahead of the competition.

Speaker Change: SG&A is expected to be approximately 33, 5% of revenue as we continue investing in brand building marketing.

Steve Fasching: I think what you'll also see in Q2 is a little bit more balanced growth between the two channels. So it's still wholesale growing a little bit faster, but you're going to see an improvement in the DTC performance. So that's how we're looking at it. I think what we've seen coming out of Q1 kind of continued sequential improvement from April to May to June. So we were seeing improvements in our DTC performance as we were starting to clear some of that inventory, which I think is one of your questions that we'll talk about. So improved performance as we've moved through Q1, which is giving us confidence.

Speaker Change: As we continue navigating this period of uncertainty will leave in a strong fundamentals to position our brands for long term success.

Speaker Change: And diluted earnings per share are expected to be in the range of $1 50.

Speaker Change: I want to thank our dedicated global team for their continued efforts to execute our strategy as we create the future for Deckers. Thank you all for joining us today and thank you to our shareholders for your continued support.

Speaker Change: Two $1 55, as compared to last year's $1 59.

Speaker Change: Overall, the performance of our brands in the first quarter gives us further confidence in our ability to continue to grow these brands.

Speaker Change: With that I'll turn the call over to the operator for Q&A.

Speaker Change: Ladies and gentlemen in order to ask a question. Please press star followed by the number one on your telephone keypad, we ask that all participants limit themselves to one question and one follow up question.

Speaker Change: We are operating from a position of strength as our in demand brands resonate with consumers worldwide and we remain driven by our long term focus our top tier levels of profitability free cash flow and debt free balance sheet allow us to continue fueling the long term opportunities ahead, while maintaining an.

Steve Fasching: And then also as we look at growth, just managing some of that wholesale growth in Q2 and improving some of our DTC. And regarding the overhang of Bondi's and Clifton's, the market's largely clean of Bondi 8's and Clifton 9's. We do have a bit of inventory in Arahi 7 that is moving very fast out, which is not impacting Arahi 8, that is performing very well against early days. It launched July 1st, but the read from one specialty, Better Sporting Goods and DTC is very positive on Arahi 8. And Arahi 8, as I mentioned before, is our third largest franchise.

Speaker Change: Your first question comes from the line of Jay sole with UBS.

Speaker Change: Please go ahead.

Speaker Change: Great. Thank you so much.

Speaker Change: <unk> to adapt to evolving dynamics.

Steve Fasching: When I asked about okay, maybe start off Steve if you could talk about the second quarter guidance you gave before.

Speaker Change: Thanks, everyone I'll now hand, the call back to Stefano for his final remarks.

Speaker Change: <unk>.

Speaker Change: Steve as we've just covered our brands are off to a solid start in fiscal 'twenty six.

Speaker Change: The company overall and hook up 10% can you just talk about how you feel about the wholesale channel versus DTC channel and then on the inventory can you just tell us where it stands with the bond.

Speaker Change: Both HOKA and UGG delivered growth above expectations for Q1 and above the full year growth rates, we're targeting prior to tariff uncertainty.

Speaker Change: Up to 90, some odd took the previous styles do you think it's completely out of the channels for the most part at this point and then separately just on the innovation. You mentioned can you just talk about the pipeline a little bit talk about some of the stuff. That's coming later this year like the market maybe.

Speaker Change: Of course, we're mindful of the consumers that are just beginning to feel the impact of higher prices.

Stefano Caroti: In terms of product pipeline, I'm very, very encouraged by what is coming, especially next spring, but also in this fiscal year. We have a couple of products above $200 that we recently launched, Mafate X and Rocket X3. They're performing well. Our second largest trail franchise, the Mach 45, is going to hit the market in August with strong bookings behind the style. Mach X3 will also be launched the back half of the year, in addition to Skyward, Laceless, and Transport Hike GTX, GORE-TEX. And early in the spring next year, we're upgrading our number four, five, and six franchise.

Speaker Change: We will remain nimble to react to changes in the consumer environment, but we're encouraged by the current momentum of our brands.

Speaker Change: Really excited about next year calendar 'twenty six that investors should be focused on thank you.

Speaker Change: Though the vast majority of our year is still to come our confidence in these brands remains high given the performance and the momentum of the business as we see it today.

Speaker Change: Got it alright, thanks Jay.

Speaker Change: I think as we think about the 10% growth we're taking into account clearly the some of the international timing on the wholesale distributor orders that we fulfilled in Q1 that originally we thought might go Q2. So.

Speaker Change: The opportunities ahead are immense.

Speaker Change: HOKA and UGG continued to create distinctive products the uniquely resonate with consumers.

Speaker Change: And both have significant potential to gain market share and growing global segments.

Speaker Change: When you adjust for that we're still in that mid teens for the first half of the year.

Speaker Change: We continue to challenge ourselves to compete with our own success building, our innovation pipeline to fuel our powerful brands and stay ahead of the competition.

Speaker Change: Growth for the brand I think what you'll also see in Q2 is a little bit more balanced growth between the two channels. So it's still a wholesale growing a little bit faster, but youre going to see an improvement in that.

Speaker Change: As we continue navigating this period of uncertainty will leave in a strong fundamentals to position our brands for long term success.

Stefano Caroti: Mach 7, Gaviota, and Speed Goats are all being updated, and bookings on these styles is super strong. Very, very encouraged by what is coming down the road.

Speaker Change: <unk> performance. So that's how we're looking at it I think what we see coming out of Q1.

Speaker Change: The continued sequential improvement from.

Speaker Change: April to May to June so we were seeing improvements in our DTC performance as we were starting to clear some of that inventory, which will I think it was one of your questions that we'll talk about.

Steve Fasching: Yeah, so I think, Jay, just kind of on the total inventory position, I think we're mindful of inventory, we're mindful of inventory in the channel. I think we are, and I think it's demonstrated a little bit by the performance we saw throughout the quarter, improvements in the cleanup of some of that older inventory, we've seen that move out, which is better positioning us to move some of the newer inventory, and as Stefano highlighted, very excited about some of the oncoming models. In addition, you know, we haven't provided the outlook on this year, but I think what is encouraging is the start to our year, and we recognize that that's not largely been impacted by the tariffs yet, but we are very encouraged with the better-than-expected performance start to the year, that consumers are very engaged, and then with some of the surveys, and we talked about it in the prepared remarks, with how well our new models, especially with in HOKA, are performing, gives us more confidence on the year as we think about it.

Speaker Change: With that I'll turn the call over to the operator for Q&A.

Speaker Change: Improved performance as we move through Q1, which is giving us confidence and then also as we look at growth just managing some of that wholesale growth.

Speaker Change: In Q2, and improving some of our DTC performance.

Speaker Change: Your first question comes from the line of Jay sole with UBS.

Speaker Change: Yeah.

Speaker Change: And regarding the overhang of a bond guys and Clifton the market largely clean of Bondi AIDS in Clifton lines, we do have a bit of inventory in our rocky seven that is moving very fast out which is not impacting our rocky eight.

Speaker Change: Please go ahead.

Jay Sole: Great. Thank you so much.

Speaker Change: When I asked about okay, maybe start off Steve if you could talk about the second quarter guidance you gave before.

Speaker Change: That is performing very well against early days launched the July 1st, but the read from a specialty sporting.

Jay Sole: <unk>.

Jay Sole: The company overall and hook up 10% can you just talk about how you feel about the wholesale channel versus PTC channel and then on the inventory can you just tell us where it stands with the bond.

Speaker Change: Supporting growth in DTC is very positive.

Speaker Change: As I mentioned before is our third largest franchise in terms of our product pipeline I'm very very encouraged by what is coming.

Jay Sole: Up to nine so that took the previous trials do you think it is completely out of the channels for the most part at this point and then separately just on the innovation. You mentioned can you just talk about the pipeline a little bit talk about some of the stuff. That's coming later this year like the market maybe.

Speaker Change: Specialty next spring, but also in this fiscal year.

Jay Sole: And the unknown, really, again, still is just kind of more details on the tariffs and where those land, and then potentially how do they impact the consumer, but I think as Q1 demonstrated, consumers are engaged in our brands, and our brands are performing well around the world. Got it. Thank you so much.

Speaker Change: We have a couple of products above $200 that we recently launched <unk> hard to external architects three theyre performing well.

Jay Sole: You're really excited about next year calendar 'twenty six that investors should be focused on thank you.

Speaker Change: Our second largest trail franchise five is going to hit the market in August.

Jay Sole: Got it alright, thanks Jay.

Jay Sole: I think as we think about the 10% growth we're taking into account clearly the some of the international timing on the wholesale distributor orders that we fulfilled in Q1 that originally we thought might go Q2. So.

Speaker Change: We have strong bookings behind that style market three will also be launched at the back half of the year. In addition to skyward listless and transport hike TT ex cortex and early in the spring next year, we have.

Laurent Vasilescu: Your next question comes from the line of Laurent Vasilescu with BNP Paribas. Please go ahead. Oh, good afternoon. Thank you very much for taking my question. I wanted to follow up on Jay's question. I think, Steve, you mentioned that we should see balanced growth between wholesale and DTC for HOKA. So I just want to be sure to understand that correctly. And within that, let's say it's 10% for DTC. Would you assume that there's come a reacceleration in the U.S. DTC business? And then longer term on this DTC narrative, I think you ended last year, the fiscal year, with 42 stores for HOKA, of which I think only five were in the U.S.

Jay Sole: When you adjust for that we're still in that mid teens for the first half of the year.

Jay Sole: Growth for the brand I think what you'll also see in Q2 is a little bit more balanced growth between the two channels. So it's still wholesale growing a little bit faster, but youre going to see an improvement in the <unk>.

Speaker Change: We're upgrading our number four five and six franchise.

Speaker Change: <unk> seven <unk> and speed are all being updated and the bookings on these styles is first wrong very very encouraged by what is coming down the pipe.

Jay Sole: <unk> performance. So that's how we're looking at it I think what we see coming out of Q1.

Speaker Change: Yes, I think Jason kind of on the total inventory position I think we're we're mindful of inventory remindful of inventory in the channel I think we will we are and I think has demonstrated a little bit by the performance we saw throughout the quarter improvement and the cleanup of some of that older inventory, we've seen that move out which.

Jay Sole: Kind of continued sequential improvement from.

Jay Sole: April to May to June so we were seeing improvements in our DTC performance is starting to clear some of that inventory, which will I think is one of your questions that we'll talk about.

Jay Sole: Improved performance as we move through Q1, which is giving us confidence and then also as we look at growth as managing some of that wholesale growth.

Steve Fasching: So how do we think about longer term, Stefano, where you want this business to be on the DTC front in terms of store penetration globally? Yeah, I think, so I'll start on the first part, Laurent. In terms of, again, how we're thinking about COVID growth in the U.S., I think we, as we experienced, you know, some challenges, and we talked about that again in the prepared remarks, and some of the improvements that we can make through managing that. What we did see was a bit of a low point in April. As I said before, we've seen sequential improvement throughout Q1, which is encouraging for us as we enter Q2.

Speaker Change: Better positioning us to move some of the newer inventory and it's definitely highlighted very excited about some of the oncoming.

Jay Sole: In Q2, and improving some of our DTC performance.

Speaker Change: Model. In addition, we haven't provided the outlook on this year, but I think what is encouraging is the start to our year now we recognize that.

Jay Sole: Okay.

Jay Sole: And regarding the overhang of Bondi Clifton the market largely clean of Bondi AIDS in Clifton lines, we do have a bit of inventory in our rocky seven that is moving very fast out.

Speaker Change: Not largely been impacted by the tariffs yet, but we are very encouraged with the better than expected performance start to the year.

Jay Sole: It is not impacting our rocky eight.

Jay Sole: It's performing very well against early days launched July 1st.

Speaker Change: Consumers are very engaged and then with some of the surveys when we've talked about it in the prepared remarks with how well our new models, especially within <unk> are performing gives us more confidence on the year as we as we think about it and the unknown really against those just kind of kind of more details on the tariffs and where those land.

Jay Sole: Reid from run specialty better sporting goods and DTC is very positive as I mentioned before is our third largest franchise.

Jay Sole: In terms of product pipeline I'm very very encouraged by what is coming especially.

Stefano Caroti: It is what we expected. So, again, that's encouraging to see that we're seeing that level of improvement, and I think that's where we get to kind of that balanced approach. Now, from a geographic standpoint, the growth will still come largely from international, because we still have a lot of opportunity to grow internationally. It's a smaller market, but we're seeing building brand awareness, which is resonating in our international markets. But with that, we will see and anticipate to see improvements in the domestic market, too. So, as we came off those April lows, we continue to expect to see kind of improvement.

Jay Sole: Especially next spring, but also in this fiscal year.

Speaker Change: Potentially how do they impact the consumer but I think as Q1 demonstrated consumers are engaged in our brands and our brands are performing well around the world.

Jay Sole: We have a couple of products above $200 that were used to.

Jay Sole: We launched <unk> that are performing well.

Jay Sole: Our second largest.

Speaker Change: Got it thank you so much.

Jay Sole: Oil franchise.

Jay Sole: He is going to hit the market in August.

Speaker Change: Your next question comes from the line of Laurent <unk>.

Jay Sole: Long bookings behind that style market three will also be launched at the back half of the year. In addition to skyward listless and transport hike GT ex cortex and early in the spring next year, we have.

Laurent: With BNP Paribas.

Speaker Change: Please go ahead.

Speaker Change: Good afternoon. Thank you very much for taking my question I wanted to follow up on unchanged question I think Steve you mentioned that we should see balanced growth.

Jay Sole: We're upgrading our number four five and six franchise Nox.

Speaker Change: Between wholesale and DTC for Uh Huh.

Stefano Caroti: We saw that in May and June, and we'll look for that again as we move through Q2. Regarding retail, Laurent, we continue to be excited about the retail opportunity. We have a very small footprint, as you outlined. We have 48 stores now, owner-operated, and we have approximately, of course, many partner stores across the globe, and they're all performing well. We have stores coming in Germany, in Berlin, and thereafter, we're probably opening a store in Milan.

Jay Sole: <unk> seven <unk>.

Speaker Change: So I just want to be sure I understand that correctly and within that.

Jay Sole: And speak up are all being updated and the bookings on these styles is for strong very very encouraged by what's coming down the pipe.

Speaker Change: Say, it's 10% for DTC.

Speaker Change: Would you assume that there is a reacceleration.

Speaker Change: Celebration in the U S DTC business and then longer term on the DTC narrative I think you ended last year in fiscal year with 42 stores for <unk> of which I think only five where they were.

Speaker Change: Yes, I think Jason kind of on the total inventory position I think we're we're mindful of inventory remindful of inventory in the channel I think.

Speaker Change: We are and I think has demonstrated a little bit by the performance we saw throughout the quarter improvement and the cleanup of some of that older inventory, we've seen that move out which is better positioning us to move some of the newer inventory definitely highlighted very excited about some of the oncoming.

Steve Fasching: Where in the U S. So how do we think about longer term Stefano.

Steve Fasching: We also have a new global head of retail, Jessica Borow, who just joined us, and she'll help lead the charge in retail. That's great to hear, Stefano. And then I think, Steve, you mentioned as a follow-up question here, you mentioned that your order books haven't really changed since, you know, the April 2nd tariff announcement. I think last call, you mentioned that, you know, pre-April 2nd, the framework that you were thinking through was that, you know, there would be at least mid-teens growth for HOKA and at least mid-singles growth for UGG. Since the fact that order books haven't really changed, is that still the right framework to think about?

Speaker Change: Where you want this business to be on the PTC front in terms of store penetration globally.

Steve Fasching: Yes, I think so I'll start on the first part.

Speaker Change: Our model. In addition, we haven't provided the outlook on this year, but I think what is encouraging is the start to our year now we recognize that that's not largely been impacted by the tariffs yet, but we are very encouraged with the better than expected performance start to the year.

Steve Fasching: In terms of again, how we're thinking about <unk> growth in the U S. I think we as we experienced.

Steve Fasching: Some challenges and we've talked about that again in the prepared remarks, and some of the improvements that we can make through managing that.

Steve Fasching: What we did see was a bit of a low point in April as I've said before we've seen sequential improvement throughout Q1, which is encouraging for us as we entered Q2. It is what we expected. So again, that's encouraging to see.

Speaker Change: That consumers are very engaged and then with some of the survey when we talked about in the prepared remarks, with how well our new models, especially within <unk> are performing gives us more confidence on the year as we as we think about it and the unknown really against those just kind of kind of more details on the tariffs and where those land and then.

Steve Fasching: And then what would you need to see to potentially reinstate guidance or at least provide formal guidance for this fiscal year? Yeah, good question. I appreciate that, Laurent. I think the framework still holds. I think coming out of the performance of Q1, more confidence in the framework as we navigate kind of the uncertainty around tariffs. So I think, yeah, largely what we laid out at the beginning of the year in terms of how we're thinking about fiscal year 26 is still intact with more confidence. I think in terms of how we're looking at reinstating full year guidance, our intention is to get there.

Steve Fasching: We're seeing that level of improvement and I think that's where we get to kind of that balanced approach now from a geographic standpoint, the growth will still come largely from international.

Speaker Change: Potentially how do they impact the consumer but I think as Q1 demonstrated consumers are engaged in our brands and our brands are performing well around the world.

Steve Fasching: Because we still have a lot of opportunity to grow internationally.

Steve Fasching: Smaller market, but we are seeing building brand awareness, which is resonating.

Speaker Change: Got it thank you so much.

Laurent: Your next question comes from the line of Laurent.

Steve Fasching: Our international market, but with that we will see and anticipate to see improvements in the domestic market too. So as we came off those April lows, we continue to expect to see kind of important.

Speaker Change: <unk> with.

Speaker Change: With BNP Paribas.

Laurent: Please go ahead.

Speaker Change: Good afternoon. Thank you very much for taking my question I wanted to follow up on unchanged question I think.

Steve Fasching: We saw that in May and June and we will.

Speaker Change: We mentioned that we should see balanced growth.

Steve Fasching: Look for that again as we move through Q2.

Steve Fasching: I think right now with uncertainty around the details of the tariff, so we're still looking for greater level of clarity around those percentages applied to various countries. And then also I think what we're also looking at is as consumers begin to react to some of the tariffs, they will likely start to see in the second half what consumer reaction is to that. So those are a couple of the elements that we're looking for.

Speaker Change: Between wholesale and DTC for Uh Huh.

Steve Fasching: Regarding retail.

Steve Fasching: We continue to be excited about the retail opportunity we have a very small footprint as you outlined that we are 48 stores now owned and operated and we have.

Speaker Change: So I just want to be sure I understand that correctly and within that.

Speaker Change: Say, it's 10% for DTC.

Speaker Change: Would you assume that there is.

Steve Fasching: Approximately twice as many partner stores across the globe and Theyre all performing they are all performing well and we have stores coming in in Germany, Berlin, and thereafter, probably opening a store.

Speaker Change: A reacceleration in the U S DTC business and then longer term on the DTC narrative I think you ended last year in fiscal year with 42 stores for <unk> of which I think only five worthy.

Laurent Vasilescu: But again, encouraged by our Q1 performance, which is giving us increased confidence around our Thank you very much and best of luck. Thank you all.

In Milan, we also have a new global head of retail and Jessica borrow just joined US and she will help lead the charge in retail.

Speaker Change: Where in the U S. So how do we think about longer term Stefano.

Speaker Change: Where you want this business to be on the PTC front in terms of store penetration globally.

Steve Fasching: That's great to hear Stefano and then I think Steve you mentioned that the follow up question here.

Adrienne Yih: Your next question comes from the line of Adrienne Yih with Barclays. Great. Good afternoon. What a great start to the year. Congrats.

Speaker Change: Yes, I think so I'll start on the first part.

Steve Fasching: You mentioned that your order books haven't really changed since the April 2nd tariff announcements I think last call you mentioned that pre April 2nd the framework that you were thinking through was that there would be at least.

Speaker Change: In terms of again, how we're thinking about <unk> growth in the U S. I think we as we experienced.

Adrienne Yih: Stefano, I wanted to talk a little bit more about the price increase strategy. It sounds like you are originally taking them on selective, but what percent of product kind of do you have expectations to increase prices in the fall season? Is it only on new launches? Is it also on some like-for-like product? And as we kind of go through the year, how are you thinking about broadly how much of the assortment you would put price increases on? As we said before, Adrienne, we've been selective and staggered in our approach. We took some price increases in July, some we'll take in the spring, and they're strategic.

Speaker Change: Some challenges and we've talked about that again in the prepared remarks, and some of the improvements that we can make through managing that.

Steve Fasching: Mid teens growth for HOKA and at least mid single growth for us.

Speaker Change: What we did see was a bit of a low point in April as I've said before we've seen sequential improvement throughout Q1, which is encouraging for us as we entered Q2.

Steve Fasching: Since the fact that order books haven't really changed it is that still the right framework to think about and then what would you need to see to potentially reinstate guidance or at least provide formal guidance for this fiscal year.

Speaker Change: It is what we expected so again thats encouraging to see that we're seeing that level of improvement and I think thats, where we get to kind of that balanced approach now from a geographic standpoint, the growth will still come largely from international.

Steve Fasching: Yes, good question and I appreciate that I think the the framework still holds I think coming out of the performance of Q1 more confidence.

Speaker Change: Because we still have a lot of opportunity to grow internationally.

Steve Fasching: In the framework as we navigate the uncertainty around tariffs. So I think largely what we laid out at the beach.

Speaker Change: Smaller market, but we are seeing building brand awareness, which is resonating.

Steve Fasching: You know, there are price points and franchises where we can increase price, and price points, especially in kids, where we want to. So it varies across brands and across segments of the business. In terms of percentage, it's difficult to outline what percentage increases we have. Yeah, I'll just add a little bit onto that. So we looked at it and we kind of broke up the two seasons. So initially, when we were looking at the tariff of around $150 million, the $75 million was kind of based on getting a little bit from our suppliers. And then staggering, as Stefano said, some of those price increases.

Steve Fasching: Beginning of the year in terms of how we're thinking about fiscal year 2006 is still intact with more confidence I think in terms of how we're looking at reinstating full year guidance. Our intention is to get there I think right now with <unk>.

Our international markets, but with that we will see and anticipate to see improvements in the domestic market too. So as we came off those April lows. We continue to expect to see kind of important improvement we saw that in May and June and we will.

Steve Fasching: Uncertainty around the details of the tariffs. So we're still looking for greater level of clarity around those percentages applied to various countries.

Speaker Change: Look for that again as we move through Q2.

Speaker Change: Regarding retail.

Speaker Change: We continue to be excited about the resale opportunity we have a very small footprint as you outlined that we have 48 stores now owned and operated and we have.

Steve Fasching: And then also I think what we're also looking at it as consumers begin to react to some of the tariff.

Speaker Change: Approximately twice as many partner stores across the globe and Theyre, all performing they're all performing well and we have stores coming in in Germany in Berlin, and thereafter, probably opening a store.

Steve Fasching: They will likely start to see in the second half what consumer reaction is to that so those are a couple of the elements that we're looking for but again encouraged by our Q1 performance, which is giving us increased confidence around our framework.

Steve Fasching: So looking at not all products, but certain products within the fall across all of our brands, you've seen some of those, you know, around $5 increases on some of that product. Then we've also looked at spring of next year. So looking at some price increases equivalent. That's on some existing as well as some new models that will come in. We left room that we can continue to evaluate that. So in light of how tariffs land and where they're landing, we can revisit that as well. So it's still ongoing, but we're fairly set at this point.

Speaker Change: In Milan, we also have a new global head of retail and Jessica borrowed just joined US and she will help lead the charge in retail.

Speaker Change: Thank you very much best of luck.

Rob: Thank you Rob.

Speaker Change: Your next question comes from the line of Adrienne <unk> with Barclays.

Steve Fasching: That's great to hear Stefano and then I think Steve you mentioned as a follow up question here.

Speaker Change: Please go ahead.

Speaker Change: Good afternoon, and what a great start to the year Congrats Stephan.

Steve Fasching: You mentioned that your order books Havent really changed.

Speaker Change: Stefano I wanted to talk a little bit more about the on the price increase strategy.

Steve Fasching: The April 2nd tariff announcements I think last call you mentioned that pre April 2nd the framework that you were thinking through was that there would be at least.

Speaker Change: It sounds like you are originally taken them on selective, but what percentage of product kind of do you have.

Steve Fasching: Mid teens growth for HOKA and at least mid single growth for <unk>. Since the fact that order books haven't really changed it is that still the right framework to think about.

Speaker Change: Vacations to increase prices in the fall season is it only on new launches.

Steve Fasching: And, you know, we'll see where tariffs land and then our ability to adjust. Okay, great.

Speaker Change: Also on some like for like product and as we kind of go through the year. How are you thinking about broadly how much of the assortment you would put price increases on.

Steve Fasching: And then my follow-up is, on the QQ guidance or on the inventory, ending inventory, what percent of that growth is actually tariff-related cost increases? And I would assume that Q2 still has the pressure year-on-year from pushing through the price increases but not at a, you know, commensurate rate with the inventory that's coming through at higher cost. Is there a potentiality that in the back half of the year you could see a gross margin return to expansion, so a flip of kind of those dynamics that you put more pricing through? Yeah, I think the answer is no.

Steve Fasching: And then what would you need to see to potentially reinstate guidance or at least provide formal guidance for this fiscal year.

Speaker Change: As we said before we've been selective.

Steve Fasching: Yes, good question and I appreciate that I think.

Speaker Change: And staggered in our approach that we took some price increases in July.

Steve Fasching: The framework still holds I think coming out of the performance of Q1 more confidence.

Speaker Change: Some will take in the spring.

Steve Fasching: In the framework as we navigate the uncertainty around tariffs. So I think yes, largely what we laid out at the beach.

Speaker Change: And the strategic their price points, where.

Speaker Change: And franchises, where we can increase price and price points, especially in cases, where we want to protect so it varies across brands.

Speaker Change: Across our segments of the business.

Speaker Change: In terms of percentage, it's difficult to outline what percentage increases we have.

Steve Fasching: We'll see more pressure in the back half on the margin, and that's going to largely be driven by the tariffs coming into effect. So as you recall, we started out the year where we said we are seeing some inflation on input costs. We're also using upgraded material costs. Overall, without tariffs, that was going to put pressure on our margin. Then with the tariffs, we're seeing kind of further pressure. And again, in FY26, there's a dynamic where the tariffs are coming in before our price increases on a full year basis are able to offset that. So with some of the inflation that we're seeing and not fully adjusting prices to offset that, again, with upgraded materials and the tariff impact, that is where we're looking at kind of lower year-on-year gross margins.

Speaker Change: We'd increase yes, okay.

Steve Fasching: Uncertainty around the details of the tariff. So we're still looking for a greater level of clarity around those percentages applied to various countries.

Speaker Change: Yeah, I'll, just add a little bit onto that so we looked at it and we've kind of broke up the two seasons. So initially when we were looking at the tariff of around $150 million with 75 would kind of based on a little bit getting a little bit from our suppliers.

Steve Fasching: And then also I think what we're also looking at it as consumers begin to react to some of the tariffs.

Stefano Karate: And then staggering as Stefano said some of those price increases so looking at not all products, but certain products within the fall across all of our brands.

Stefano Karate: You've seen some of those around $5 increases on some of that product.

Stefano Karate: We've also looked at spring of next year, so looking at some price increases.

Steve Fasching: Thank you very much best of luck.

Rob: Thank you Rob.

Stefano Karate: Back on some existing as well as some new models that will come in we left room that we can continue to evaluate that so in light of our tariff land and where they're landing.

Speaker Change: Your next question comes from the line of Adrienne <unk> with Barclays.

Speaker Change: Please go ahead.

Speaker Change: Good afternoon, and what a great start to the year Congrats Stephan.

Steve Fasching: Some of what you're seeing in the first half are related to that higher freight, higher upgraded material input costs. What you're going to see in the second half, a little bit in Q2, will then also be the differential of the tariff. So the unmitigated offset a little bit by mitigation, but still unfavorable for fiscal year 2020. Okay, super helpful. Thank you very much. Best of luck. Thank you.

Speaker Change: Stefano I wanted to talk a little bit more about the on.

Stefano Karate: We can revisit that as well so it's still ongoing but we're fairly set at this point.

Speaker Change: The price increase strategy.

Speaker Change: It sounds like you are originally taken them on selective, but what percentage of product kind of do you have expectations to increase prices in the fall season is it only on new launches is I'll.

Stefano Karate: And we will see repair where tariff land and then our ability to adjust any further okay.

Stefano Karate: Okay, Great and then my follow up is on the <unk> guidance, all right on the inventory ending inventory what.

Speaker Change: Also on some like for like product and as we kind of go through the year. How are you thinking about broadly how much of the assortment you would put price increases on.

Stefano Karate: That growth is actually a tariff related cost increases and I would assume that Q2 is still has the pressure year on year from pushing through the price increases but not at a.

Rick Patel: Your next question comes from the line of Jonathan Komp with Baird. Please go ahead. Yeah, hi, good afternoon. I want to follow up on HOCA, the discussion about bolstering some of the capabilities, driving better heat for other franchises, and really making some of the launches more spread out and more seamless. Could you maybe just talk a little bit more about the insights in the business currently that are driving you to focus on those areas, especially in a fairly competitive running market? Yeah, to the capabilities, John, yes, we're adding capabilities in innovation, in design, in color, in engineering.

Speaker Change: As I said before Adrian we've been selected.

Speaker Change: And staggered in our approach that we took some price increases in July.

Stefano Karate: Commensurate with the inventory that's coming through at higher cost is there a potentiality in the back half of the year you could see a gross margin return to expansion. So a slip of kind of that those dynamics as you put more pricing through.

Speaker Change: Some will take in the spring.

Speaker Change: And the strategic price points, where and franchises where we can.

Speaker Change: Increased price and price volume, especially in cases, where that we want to protect so it varies across brands and across our segments of the business.

Stefano Karate: Yes, I think.

Stefano Karate: The answer is no we will see more pressure in the back half on the margin and thats going to largely be driven by the tariff coming into effect. So as you recall, we started out the year. We said we are seeing some inflation on input costs. We are also using upgraded material cost overall without tariffs that was going to put.

In terms of percentage, it's difficult to outline what percentage increases we have.

Speaker Change: We'd increase yes, okay.

Stefano Caroti: This is a very competitive landscape, especially with other players coming in, so we need to continue to lead. And to your point about a few learnings, there were a few learnings recently. We'll be spacing out key-style launches farther apart from each other. We'll be better aligning flow with key commercial moments. We're tightening inventory of outgoing styles.

Speaker Change: Yes ill just add a little bit onto that so we looked at it and we kind of broke up the two seasons. So initially when we were looking at the tariff of around $150 million with 75 with kind of based on getting a little bit from our suppliers.

Stefano Karate: Pressure on our full year margin.

Stefano Karate: And then with the tariffs, we're seeing kind of further pressure and again in FY 'twenty six there's a dynamic where the tariffs are coming in before our price increases on a full year basis are able to offset that with some of the inflation that we're seeing and not fully adjusting prices to offer.

Stefano Corot: And then staggering as Stefano said some of those price increases so looking at not all products, but certain products within the fall across all of our brands you've.

Stefano Caroti: And as the offer expands, we'll be able to create more segmentation for all channels and more differentiation for the Okay, that's helpful.

Stefano Corot: <unk> seen some of those around $5 increases on some of that product.

Stefano Karate: Stepped up again with.

Stefano Corot: We've also looked at spring of next year, so looking at some price increases.

Stefano Karate: Graded material and the tariff impact that is where we're looking at kind of lower year on year gross margin some of what youre seeing in the first half are related to that higher freight higher upgraded material input cost what youre going to see in the second half a little bit in Q2.

Stefano Corot: Back on some existing as well as some new models that will come in we left room that we can continue to evaluate that so in light of.

Steve Fasching: And Steve, one separate question, if I could, just thinking about the business ongoing, is there a way to think about the minimum cash that you think you need to run the business and just any insights on how the board's viewing the buyback given the big authorization, and just how far your valuation has come in here? Thanks again. Yeah, yeah, thanks, John, for that. I think clearly, you know, we're sitting on a very healthy cash position, and that has helped us and the board consider kind of share repurchase opportunities, especially where we feel we're underappreciated for what we're delivering.

Stefano Corot: Our tariff land and where they're landing.

Stefano Corot: We can revisit that as well so it's still ongoing but we're fairly set at this point.

Stefano Karate: We will then also be the differential of the tariff.

Speaker Change: Mitigated offset a little bit by mitigation, but still unfavorable for fiscal year 'twenty places. Okay. Super helpful. Thank you very much best of luck. Thank you.

And we'll see where we're tariff land and then our ability to adjust any further okay.

Stefano Corot: Okay, Great and then my follow up is on the <unk> guidance, all right on the inventory ending inventory what.

Speaker Change: And next question comes from the line of Jonathan Komp with Baird. Please go ahead.

Stefano Corot: <unk> of that growth is actually a tariff related cost increases and I would assume that Q2 still has the pressure year on year from pushing through the price increases but not at a.

John Kernan: And so I think what you've seen the past couple of quarters is we have stepped up. Now, with the increased authorization, we'll continue to look at that. But yeah, again, where we feel we're putting up exceptional results, and it's not reflective in our stock price, we will take advantage of those opportunities. Understood. Thank you.

Jonathan Komp: Yes, hi, good afternoon, I wanted to follow up on the discussion about bolstering some of the capabilities driving better heat for other franchises.

Stefano Corot: Commensurate rate with the inventory that's coming through at higher cost is there a potentiality in the back half of the year you could see a gross margin return to expansion. So a flip of kind of that those dynamics as you put more pricing through.

Speaker Change: And really making some of the launches.

Speaker Change: More spread out and more seamless could you maybe just talk a little bit more about the insights.

Speaker Change: The business currently that are driving near two to focus on those areas, especially.

Speaker Change: On a fairly competitive running market.

Rick Patel: Your next question comes from the line of Rick Patel with Raymond James. Please go ahead. Thank you. Good afternoon. Question on HOKA's international performance. Can you unpack the building blocks of growth that you saw in Q1 as we think about what was organic, what you might consider productivity versus new distribution? And how are you thinking about this growth driver as fiscal 26 moves forward?

Stefano Corot: Yeah I think.

Stefano Corot: The answer is no we will see more pressure in the back half on the margin and thats going to largely be driven by the tariffs coming into effect. So as you recall, we started out the year. We said we are seeing some inflation on input costs. We're also using upgraded material cost overall without tariff that was going to put.

Speaker Change: Yeah, I think the capabilities.

Speaker Change: Yes, we're adding capabilities in innovation and design and color in engineering.

Speaker Change: This is a very competitive landscape.

Speaker Change: Especially with other players coming in so linked to continue to lead.

Speaker Change: And.

Speaker Change: To your point about.

Speaker Change: Learnings that there were few learnings.

Speaker Change: <unk>.

Speaker Change: What will be spacing alky style launches.

Stefano Corot: Pressure on our full year margin.

Stefano Corot: Then with the tariffs, we're seeing kind of further pressure and again in FY 'twenty six there's a dynamic where the tariffs are coming in before our price increases on a full year basis are able to offset that so with some of the inflation that we're seeing and not fully adjusting prices to offer.

Speaker Change: Further apart from each other.

Stefano Caroti: Hey, Rakesh, this is Stefano. What is great for us internationally and domestically is that revenue growth is outpacing door expansion and sell-through continues to outpace sell-in. So yes, we're opening more doors with the likes of Intersport and Sport 2000 and the JD Group and SportCheck internationally, but our product is performing and we are getting a record. We received record reorders, at-once orders in Europe. Our China business is super strong.

Speaker Change: We'll be better aligning flow with key commercial moments, we're tightening inventory oh about going styles and as the offer expands we will be able to create more segmentation for all channels and more differentiation for DTC.

Stefano Corot: First up again with.

Speaker Change: Okay. That's that's helpful and Steve one separate question, if I could just thinking about the business ongoing is there a way to think about the minimum cash that you think you need to.

Stefano Corot: Upgraded materials.

Stefano Corot: The tariff impact that is where we're looking at kind of lower year on year gross margin some of what youre seeing in the first half are related to that higher freight.

Jonathan Komp: To run the business and just any insights on how the board the viewing the buyback given the big authorization and just how far your valuation has come in here. Thanks again.

Stefano Corot: Upgraded material input cost what youre going to see in the second half a little bit in Q2. We'll then also be the differential of the tariff.

Steve Fasching: And as a result of this, we're seeing very healthy order books for the back half of this year and going to spring, summer, And secondly, can you talk about the outlook for SG&A? You know, I think you touched on timing, having an impact on Q1 and seeing a short-term increase in the ratio. Just some additional details there would be great. And if you're not guiding for the year, you know, perhaps touch on the areas of spending that you have the most confidence in being able to control. Yeah, Rick, Steve, I think as we think about SG&A and the margins that we're delivering, right, and recognition of increased competition, you know, we have the advantage with a strong, healthy balance sheet and strong levels of profitability to continue to invest in these brands, but we'll do it in a well-managed way.

Jonathan Komp: Yes, thanks, Jeff for that I think clearly we're sitting on a very.

Speaker Change: Mitigated offset a little bit by mitigation, but still unfavorable for fiscal year 2022 okay. Super helpful. Thank you very much best of luck. Thank you.

Jonathan Komp: A healthy cash position and that has.

Jonathan Komp: Help us and the board consider share repurchase opportunities, especially where we feel we're underappreciated for what we're delivering and so I think what you've seen the past couple of quarters. As we have stepped up now with the increased authorization. We will continue to look at that but yes, again, where we feel we're putting up exceptional.

Stefano Corot: Yeah.

Jonathan Komp: And next question comes from the line of Jonathan Komp with Baird. Please go ahead.

Jonathan Komp: Yes, hi, good afternoon, I wanted to follow up on the discussion about bolstering some of the capabilities.

Jonathan Komp: Results and is not reflected in our stock price, we will take advantage of those opportunities.

Speaker Change: Driving better heat for other franchises.

Speaker Change: And really making some of the launches.

Speaker Change: More spread out and more seamless could you maybe just talk a little bit more about the insights.

Jonathan Komp: Understood. Thank you.

Speaker Change: Your next question comes from the line of Rick Patel with Raymond James.

Speaker Change: The business currently that are driving your two to focus on those areas, especially.

Jonathan Komp: Please go ahead.

Speaker Change: Fairly competitive running market.

Rick Patel: Thank you and good afternoon question on focus International performance can you unpack the building blocks of growth that you saw in Q1 as we think about what was organic what you might consider productivity versus new distribution and how are you thinking about this growth driver as fiscal 'twenty six moves forward.

Speaker Change: Yeah, I think the capabilities.

John: John Yes, we're adding capabilities in innovation and design and color in engineering.

Steve Fasching: And I think that's something that we've demonstrated over the past. So, you know, we, as we talked about kind of on the last call, we will continue to invest to build brand awareness across the globe. That means that we're going to increase our investment in marketing efforts behind our brands to build global awareness. You know, we've said we're investing more in global campaigns, but we're also investing more in localization of content as that resonates across communities across the world. And so those are important increases that we're making. In addition, you know, as we build out offerings, especially on the HOKA brand, you're seeing continued investment in that brand from a brand capability, but also from a commercialization capability across the globe.

Speaker Change: Very competitive landscape.

Speaker Change: As with other players coming in so we need to continue to lead.

Speaker Change: And to.

Speaker Change: To your point about if your learnings that there were a few learnings.

Speaker Change: <unk>.

Rick: Hey, Rick this step up.

Speaker Change: What will be spacing <unk> launches.

Rick: What is great for us internationally and domestically is that revenue growth is outpacing door expansion and sell through continues to outpace sell in so yes, we're opening.

Speaker Change: Further apart from each other.

Speaker Change: <unk> be better aligning flow with key commercial moments, we're tightening inventory oh about going styles and as the offer expands we will be able to create more segmentation for all channels and more differentiation for DTC.

Rick: More doors with the likes of inter sport and for 2000 and.

Rick: The JD group and.

Rick: Sport Chek internationally, but our product is performing and we are getting a record that we received record reorders at once orders in Europe.

Steve Fasching: Okay. That's helpful and Steve one separate question, if I could just thinking about the business ongoing is there a way to think about the minimum cash that you think you need to do.

Rick: China business is super strong and as a result of this we are seeing very healthy order book for the back half of this year and going into spring summer 'twenty six.

Steve Fasching: We run the business and just any insights on how the board the viewing the buyback given the big authorization and just how far Youre evaluation has come in here. Thanks again.

Steve Fasching: So you're going to see increases in those specific kind of branding and brand building efforts. I think from an enterprise, we continue to be very efficient. We will continue to make investments that you're seeing in improving distribution and warehousing. That's some of the changes that we're making in Europe that you're seeing this year. We're also committed to making investments in our IT efforts. But those will all be done in proportion to the growth of our business. So you'll see some oversized investments in the brand and brand building capabilities across the globe, continuing to invest in infrastructure and the enterprise functions that support that growth, but in a well-managed way.

Speaker Change: Thanks, Jeff for that I think clearly we're sitting on a very healthy cash position.

Rick: And secondly can you talk about.

Rick: The outlook for SG&A I think he touched on timing, having an impact on Q1 and seeing a short term increase in the ratio.

Steve Fasching: That has.

Steve Fasching: Helps us and the board consider kind of share repurchase opportunities, especially where we feel we're underappreciated for what we're delivering and so I think what you've seen the past couple of quarters. As we have stepped up now with the increased authorization. We will continue to look at that but yes, again, where we feel we're putting up exceptional.

Rick: Just some additional detail there would be great and if youre not guiding for the year.

Rick: Perhaps touch on the areas of spending that you have the most confidence in being able to control.

Rick: Yeah.

Rick: Yes, Rick Steve I think as we think about SG&A and the margins that we're delivering right in recognition of increased competition.

Steve Fasching: <unk> and its not reflected in our stock price, we will take advantage of those opportunities.

Rick: Have the advantage with a strong.

Steve Fasching: Understood. Thank you.

Steve Fasching: Thanks very much.

Steve Fasching: [laughter].

Rick: Healthy balance sheet and strong levels of profitability to continue to invest in these brands, but we'll do it.

Speaker Change: Your next question comes from the line of Rick Patel with Raymond James.

Sam Poser: Your next question comes from the line of Sam Poser with Williams Trading. Please go ahead. Thank you for taking my questions. The first question I have is on, can you delineate with both HOKA and with Pug, how the stores perform. It's harder with HOKA, the less stores on a comp basis, but let's say comp and versus plan or versus your e-commerce business. versus plan. You know, so we can understand, you know, maybe get some color on that. People are going to big shopping stores more and seeing how that's impacting you guys. Yeah, I think, yep, Sam, just to kind of give general context, because we've made reference, and I think you've heard others probably make some reference, where they've seen consumers kind of in the past few months prefer an in-store experience.

Speaker Change: Please go ahead.

Rick: In a well managed way and I think that's something that we've demonstrated.

Speaker Change: Thank you and good afternoon question on focus International performance can you unpack the building blocks of growth that you saw in Q1 as we think about what was organic what you might consider productivity versus new distribution and how are you thinking about this growth driver as fiscal 'twenty six moves forward.

Rick: Over the past so.

Rick: We as we talked about kind of on the last call.

Rick: We will continue to invest to build brand awareness across the globe that means that we're going to increase our investment in marketing efforts behind.

Rick: Behind our brands to build global awareness.

Speaker Change: Hey, Rick this stuff up.

Rick: As we've said, we're investing more in global campaigns, but we're also investing more in localization of content.

Speaker Change: What is great for us internationally and domestically is that revenue growth is outpacing door expansion and sell through continues to outpace sell in so yes, we're opening.

Rick: That resonates across communities.

Rick: The world and so those are important increases that we're making in addition.

Speaker Change: More doors with the likes of inter sport and for 2000 and.

Rick: As we build out offerings, especially on the HOKA brand Youre seeing continued investment.

Speaker Change: The JD group.

Speaker Change: Sport Chek internationally, but.

Rick: And that brand.

Speaker Change: Our product is performing and we are getting a record that we received record reorders at once orders in Europe.

Rick: From a brand capability, but also from a commercialization capability across the globe, So youre going to see increases.

Steve Fasching: I think that's consistent with some of the trends that we've seen with some of our retail stores. Again, you know, comparatively speaking to others, we have a much smaller retail footprint, so it doesn't necessarily move the But I think that is definitely a trend that we have seen, which also confirms a lot of the success that we've seen with our wholesale channel and what they've reported with kind of consumer in-store shopping experiences. So, yeah, it is definitely something we've seen, but again, we've got a smaller retail footprint, so it doesn't move our DTC needle as much, but it is definitely something.

Rick: In those specific kind of branding and brand building efforts.

Speaker Change: China business is super strong and as a result of this we're seeing very healthy order book for the back half of this year and going into spring summer 'twenty six.

Rick: I think from a an enterprise.

Rick: We continue to be very efficient, we will continue to make investments.

Rick: You are seeing in <unk>.

Speaker Change: And secondly can you talk about.

Rick: Improving distribution and warehousing that some of the changes that we're making in Europe that you're seeing this year, we're also committed to making.

Speaker Change: The outlook for SG&A, I think you touched on timing, having an impact on Q1 and seeing a short term increase in the ratio.

Rick: Investments in our it efforts, but those will all be done in proportion to the growth of our business. So youll see some oversized investments.

Speaker Change: Just some additional detail there would be great and if youre not guiding for the year.

Speaker Change: Perhaps touch on the areas of spending that you have the most confidence in being able to control.

Rick: And the brands and brand building capabilities across the globe continuing to invest in infrastructure and the enterprise functions that support that growth.

Speaker Change: Yeah.

Sam Poser: Well, I understand it doesn't move the needle. I'm not asking if it does. I'm trying to get a number. So the question I have is, your stores, let's say with UGG, versus your total, your total BTC was down seven. What were the stores versus the total? And I know it's harder with HOCA because there are less stores, but I'd like to get some form of clarification on what that is, understanding that it's not material. But at least it is factual. And would would put more meat on the bone of the comments and of the comments you've made as well as the others, understanding it is not necessarily material.

Speaker Change: Yes, Rick Steve I think as we think about SG&A and the margins that we're delivering right in recognition of increased competition.

Rick: Well managed way.

Rick: Thanks very much.

Rick: Thank you.

Speaker Change: Your next question comes from the line of Sam Poser with Williams trading.

Speaker Change: Have the advantage with a strong.

Speaker Change: Healthy balance sheet and strong levels of profitability to continue to invest in these brands, but we'll do it.

Speaker Change: Go ahead.

Speaker Change: Thank you for taking my questions.

Speaker Change: The first question I have is on <unk>.

Speaker Change: In a well managed way and I think that's something that we've demonstrated.

Speaker Change: Can you give us can you delineate the.

Speaker Change: With both <unk> and with <unk>.

Speaker Change: Over the past so.

Speaker Change: We as we talked about kind of on the last call we.

Speaker Change: How the stores performed.

Speaker Change: We will continue to invest to build brand awareness across the globe that means that we're going to increase our investment in marketing efforts.

Speaker Change: Harder with poker the less stores on a comp basis, let's say up and versus plan or versus your ecommerce business.

Behind our brands to.

Steve Fasching: Yeah, I think the, so clearly, the cop in a retail store was better than than what we saw. online. And we haven't broken that out. But again, you know, I think if your point to what to what degree 50 basic points. Can you please give us something here? I really think it's important.

Speaker Change: Oh.

Speaker Change: To build global awareness.

Speaker Change: Versus plan.

Speaker Change: We can understand.

Speaker Change: We've said, we're investing more in global campaigns, but we're also investing more in localization of content.

Speaker Change: Maybe get some color on that people tend to shop in stores more and see how that's impacting you guys specifically.

Speaker Change: Is that resonates across communities.

Speaker Change: Yes, I think.

Speaker Change: Across the world and so those are important increases that we're making in addition.

Speaker Change: Yes, Sam.

Speaker Change: Kind of.

Speaker Change: Give general context, because we've made referenced and I think you've heard others, probably make some reference where they are seeing consumers kind of in the past few months prefer an in store experience I think that that's consistent with some of the trends that we've seen with some of our retail stores again.

Speaker Change: As we build out offerings, especially on the OCA brand Youre seeing continued investment in.

Sam Poser: Yeah, I don't know, Sam, that we want to go kind of down a path of breaking out that level of detail. All right, but we perform better than you. Thank you. In the concerns you have about the gross margin, you talked about the headwinds from the tariffs and so on and so forth. Two questions there. One, with the Clifton and the Bondi where you raised price, I know it was on July 1st, but have you seen any of the Bondi 9 and the Clifton 10, have you seen any change in rate of sale since you raised those prices, short time?

Speaker Change: And that brand.

Speaker Change: From a brand capability, but also from a commercialization capability across the globe, So youre going to see increases in.

Speaker Change: <unk> speaking to others.

Speaker Change: In those specific kind of branding and brand building efforts.

Speaker Change: We have a much smaller retail footprint. So it doesn't necessarily move the needle as much for us as it does for others, but I think that is definitely a trend that we have seen which also confirms a lot of the success that we've seen with our wholesale channel.

Speaker Change: I think from a an enterprise.

Speaker Change: We continue to be very efficient, we will continue to make investments.

Speaker Change: That youre seeing in improving distribution and warehousing that some of the changes that we're making in Europe that you're seeing this year, we're also committed to making.

Speaker Change: What they've reported with kind of consumer in store shopping experiences. So yes. It is definitely something we have seen but again, we've got a smaller retail footprint. So it doesn't move our DTC needle as much but it is definitely a trend.

Speaker Change: Investments in our <unk> efforts, but those will all be done in proportion to the growth of our business. So you will see some oversized investments in the brands and brand building capabilities across the globe continuing to invest in infrastructure and the enterprise functions that support that growth.

Steve Fasching: And two, in your discussion about gross margin going back, going forward, what is your expectation for promotional activity in that? Because you did get promotional on the Bondi. 8 at the end of last year, but that should be an offset this year, theoretically. Yeah, let me answer the first part of the question. Since we increased prices on July 1st, we haven't seen any material decline in performance for the products that we have raised prices for. And then on the promotion assumption, Sam, I think the way we're looking at it is we always assume a level of normal promotion.

Speaker Change: Well I understand that doesn't move the needle I'm not asking if it does I'm trying to get a number. So the question I have is your stores, let's say with Doug <unk>.

Speaker Change: First is your total your total DTC was down seven what were the stores versus the total and I know, it's harder with OCA, because they're less stores, but I'd like to get some clarification on what that is understanding that it's not material, but at least it is <unk>.

Speaker Change: A well managed way.

Speaker Change: Thanks very much.

Speaker Change: Thank you.

Speaker Change: Your next question comes from the line of Sam Poser with Williams trading.

Speaker Change: Please go ahead.

Sam Poser: Thank you for taking my questions.

Sam Poser: The first question I have is on <unk>.

Speaker Change: Sure and wood.

Sam Poser: Can you give us can you delineate that with those folks and with <unk>.

Speaker Change: Would put more meat on the bone of the comment.

Speaker Change: Of the comments, you've made as well as the others understand that it is not necessarily material.

Sam Poser: All the stores.

Sam Poser: It's harder with poker the less stores on a comp basis, but let's say.

Speaker Change: Yes, I think the so clearly the confident in a retail store with better than than what we saw.

Steve Fasching: Right now, it's with some of the improvements that we saw in Q1, we did see an increase in promotion this year versus last year. We anticipate for the rest of this year that we'll see increased levels of promotion this year versus last year. Again, we're not giving a full year guidance, but that's kind of the perspective of how we're looking at it. Q2, embedded in our guidance, is an increased level of promotion. I think we'll see, again, how that plays out. I'll just remind everyone that last year was exceptional in terms of the level of full-price selling that we delivered.

Sam Poser: And versus plan or.

Sam Poser: Or versus.

Sam Poser: E Commerce business.

Sam Poser: Yes.

Speaker Change: <unk>.

Sam Poser: Versus plan.

Speaker Change: Online that we havent broken that out, but again I think if your point what to what degree.

Understand maybe get some color on that.

Sam Poser: Some big shopping stores more and see how that's impacting you guys specifically.

Speaker Change: 50 basis points can you please give us something here real.

Sam Poser: I think Sam.

Speaker Change: I think it's important.

Sam.

Sam Poser: Kind of give general context, because we've made referenced and I think you've heard others, probably made some reference we're seeing consumers kind of in the past few months prefer an in store experience I think that's what that's consistent with some of the trends that we've seen with some of our retail stores again.

Speaker Change: Yeah, I don't know Sam that we wanted to go kind of down a path of breaking out that level of detail.

Speaker Change: Alright, but retail.

Speaker Change: Performed better than any of us.

Steve Fasching: And so we're not expecting to deliver that same level of full-price selling that we did last year, but we'll aim to try to get as close as possibly that we can. So, again, we'll see how it plays out. Our assumption always embeds a level of more normalized promotion, and then we'll see how things play out. And if they play out like Q1, we may see some uptake. Thank you guys very much. Thanks, Sam.

Speaker Change: Significantly thank you.

Sam Poser: Comparatively speaking to others.

Speaker Change: And the concerns you have about the gross margin you talk.

Sam Poser: We have a much smaller retail footprint. So it doesn't necessarily move the needle as much for us as it does for others, but I think that is definitely a trend that we have seen which also confirms a lot of the success that we've seen with our wholesale channel and what they've reported with kind of consumer in store shopping experiences.

Speaker Change: You talked about the headwinds from the tariffs and so on and so forth.

Speaker Change: Two questions there one with the Clifton and Bondi, where you raised price I know it was on July one, but have you seen any of it.

Speaker Change: But not <unk>.

Speaker Change: And I know that it puts incentive you seen any change in rate of sale. Since you raise those prices notes Georgetown and two in your discussion about gross margin going back going forward.

Sam Poser: So yes. It is definitely something we have seen but again, we've got a smaller retail footprint. So it doesn't move our DTC needle as much but it is definitely a trend.

John Kernan: Your final question comes from the line of John Kernan with P.D. Cowan. Please go ahead. All right, thanks for taking my question. Steve, maybe just within the framework of US and international, US was down 3, international up 50 in Q1. How should we be thinking about that within Q2? Understand you don't give specific guidance, but just some guardrails on that. And then follow up is just HOKA DTC within your forecasting. How should we think about the re-inflection of HOKA within a direct consumer channel globally? Yeah, sure.

Speaker Change: What is your expectation for promotional activity.

Sam Poser: Well I understand it doesn't move the needle I'm not asking you if it does I'm trying to get a number. So the question I have is your stores, let's say with Doug <unk>.

Speaker Change: In that because you did get promotional on the Bondi.

Speaker Change: Hey at the.

Speaker Change: The end of last year, but that should be an offset this year theoretically.

Speaker Change: As your total your total DTC was down seven what were the stores versus the total.

Speaker Change: Yeah, Let me answer the first part of the question since we increased prices on July one we haven't seen any material decline in performance for.

Speaker Change: I know, it's harder with OCA, because theyre less stores, but I'd like to get some clarification on what that is understanding that it's not material, but at least it is factual and wood.

Speaker Change: The products that we have the right price on.

Speaker Change: And then on the on the promotion of assumption Sam I think the way. We're looking at it is we always assume a level of normal promotion right now.

Speaker Change: Put more meat on the bone of the comment.

Steve Fasching: So in terms of, first, the international versus U.S. With the slower growth, there will be some improvement. So Q2 compared to Q1. International, the growth won't be as robust as what you saw in Q1. Again, because some of that was timing that we called out with the warehouse move. And a little bit of improvement on the domestic side. So we're looking for incremental improvement in Q2, but still the bulk of the growth will come from the international perspective.

Speaker Change: Of the comments, you've made as well as the others understand that it is not necessarily material.

Speaker Change: With some of the improvement that we saw in Q1, we did see an increase in promotion this year versus last year.

Speaker Change: Yes, I think the so clearly the confidence of a retail store with better than than what we saw.

Speaker Change: We anticipate for the rest of this year that we will see increased levels of promotion this year versus last year again, we're not giving a full year guidance, but that's kind of the perspective of how we're looking at Q2 embedded in our guidance is an increased level of promotion.

Speaker Change: <unk>.

Speaker Change: Online that we havent broken that out, but again I think if your point what to what degree.

Speaker Change: 50 basis points can you. Please give us something here really I think it's important.

Speaker Change: I think we'll see again, how that plays out I would just remind everyone that last year was exceptional in terms of the level of full price selling that we delivered and so we're not expecting to deliver that same level of full price selling that we did last year, but we will aim to try to get as close as possibly.

Sam Poser: Yeah, I don't know Sam that we want to go kind of down a path of breaking out that level of detail.

Steve Fasching: And then your question on DTC growth, just, sorry, could you repeat the question on... Yeah, sure. Within HOKA DTC, how should we be thinking about the inflection, particularly in U.S. for HOKA DTC? It sounds like you exited the corridor at a stronger rate. Some of the data we've seen shows improved traffic trends. So just curious how you're thinking about HOKA DTC specifically within the U.S. Yeah, I think we saw slightly better improvements at the end of Q1, so we're encouraged with that. Again, I think it's incremental, right, as we continue to look at Q2. So as we saw in Q1, May incrementally built on April, June incrementally built on May, and as we're about Q2, you know, it's a build on Q1.

Speaker Change: Alright, good retail.

Speaker Change: Performed better than any of us.

Speaker Change: Yeah.

Speaker Change: Thank you.

Speaker Change: And the concerns you have about the gross margin you talk.

Speaker Change: That we can so again, we'll see how it plays out our assumption always invest a level of more normalized promotion and then we'll see how things play out and if they play out like Q1, we may see some upside.

Speaker Change: You talked about the headwinds from the tariffs and so on and so forth.

Speaker Change: Two questions there one with the Clifton and Bondi, where you raised price I know it was on July 1st but have you seen any of the bundle not fun Bondi.

Speaker Change: Okay.

Speaker Change: Thank you guys very much.

Speaker Change: Thanks Sam.

Speaker Change: Bondi Clifton 10 have you seen any change in rate of sale since you raise those prices most Georgetown and two in your discussion about gross margin going up.

Speaker Change: Your final question comes from the line of John Kernan with PD Cohen.

Speaker Change: Please go ahead.

John Kernan: Alright, Thanks for taking my question.

Speaker Change: Back going forward.

Speaker Change: I think just with and.

Speaker Change: What is your expectation for promotional activity.

Speaker Change: The framework of U S and International U S was down three international up 50.

Speaker Change: In that because you did get promotional on the Bondi.

Speaker Change: Hey at the.

Speaker Change: Q1, how should we be thinking about that.

Speaker Change: The end of last year, but that should be an offset this year theoretically.

Speaker Change: Within Q2, I understand you don't give specific guidance, but just some guardrails on that.

Speaker Change: Yeah, Let me answer the first part of the question.

John Kernan: We're not looking for anything dramatically different. We're looking kind of for continued incremental improvement, because remember, we're still managing some wholesale expansion. So we know that that will be pressure in the near term, but it's more about the incremental improvement. Understood. Thank you.

Speaker Change: And then follow up is just hope it DTC.

Speaker Change: Increased prices on July one we haven't seen any material decline in performance for.

Speaker Change: And within your forecasting how should we think about the inflection of cocoa within the direct to consumer channel globally.

Speaker Change: The products that we have the right pricing.

Speaker Change: Yes, sure. So in terms of first the international versus U S. So.

Speaker Change: And then on the on the promotion of assumption Sam I think the way. We're looking at it is we always assume a level of normal promotion right now.

Speaker Change: <unk>.

Operator: Best of luck. All right. Thank you.

Speaker Change: With the slower growth there will be some improvement so Q2 compared to Q1.

Operator: Ladies and gentlemen, this concludes today's call. Thank you all for joining and you may now disconnect.

Speaker Change: With some of the improvements that we saw in Q1, we did see an increase in promotion this year versus last year.

Speaker Change: International the growth won't be as robust as what you saw in Q1 again to some of that was timing that we called out with the warehouse move.

Speaker Change: And a little bit of improvement on the domestic side. So we're looking for incremental improvement in Q2, but still the bulk of the growth will come from the international perspective.

Speaker Change: And then your question on DTC growth.

Speaker Change: Sorry could you repeat the question on <unk>.

Speaker Change: Yes, sure within hope at DTC.

Speaker Change: Should we be thinking about the inflection, particularly in the U S.

Speaker Change: For hope at DTC. It sounds like you exited the quarter at a stronger rate some of the data we've seen shows improved traffic trends. So just curious how.

Speaker Change: That we can so again, we'll see how it plays out our assumption always embeds a level of more normalized promotion and then we'll see how things play out and if they play out like Q1, we may see some upside.

Speaker Change: Youre thinking about OCA DTC, specifically within the U S.

Speaker Change: Yes, I think so.

Speaker Change: Okay.

Speaker Change: We saw slightly better improvement.

Speaker Change: Thank you guys very much.

Speaker Change: Thanks Sam.

Speaker Change: The end of Q1, so we're encouraged with that again.

Speaker Change: Your final question comes from the line of John Kernan with PD Cowen.

Speaker Change: I think it's incremental right as we continue to look at Q2.

Speaker Change: Please go ahead.

John Kernan: Alright, Thanks for taking my question.

Speaker Change: As we saw in Q1 May incrementally built on April June incrementally built on May.

John Kernan: Steve maybe just within.

John Kernan: The framework of U S and International U S was down three international up 15, and Q1, how should we be thinking about that.

Speaker Change: And as we're thinking about Q2.

Speaker Change: It's built on Q1, we're not looking for anything dramatically different we're looking kind of FERC continued incremental improvement because remember we're still managing some wholesale expansion. So we know that that will be pressure in the near term, but it's more about the incremental improvement.

John Kernan: Within Q2, I understand you don't give specific guidance, but just some guardrails on that.

John Kernan: And then follow up is just hope it DTC.

John Kernan: Within your forecasting how should we think about the re inflection of <unk> within the direct to consumer channel globally.

Speaker Change: Understood. Thank you best of luck.

Speaker Change: Yes, sure. So in terms of first the international versus U S. So.

Speaker Change: Alright. Thank you. Thank you.

Speaker Change: Ladies and gentlemen, this concludes today's call. Thank you all for joining and you may now disconnect.

John Kernan: <unk>.

John Kernan: With the slower growth there will be some improvement so Q2 compared to Q1.

Speaker Change: Yeah.

John Kernan: International the growth won't be as robust as which you saw in Q1 again to some of that was timing that we called out with the warehouse move.

John Kernan: And a little bit of improvement on the domestic side. So we're looking for incremental improvement in Q2, but still the bulk of the growth will come from the international perspective.

John Kernan: And then your question on DTC growth.

John Kernan: Sorry could you repeat the question on <unk>.

John Kernan: Yes, sure within hope at DTC.

John Kernan: Should we be thinking about the inflection, particularly in the U S.

Speaker Change: For hope at DTC. It sounds like you exited the quarter at a stronger rate some of the data we've seen shows improved traffic trends. So just curious how.

Speaker Change: Youre thinking about OCA DTC, specifically within the U S.

Speaker Change: Yes, I think so.

Speaker Change: We saw slightly better improvement at the end of Q1.

Speaker Change: So we're encouraged with that again.

Speaker Change: I think it's incremental right as we continue to look at Q2 as we saw in Q1 may incrementally built on April June incrementally built on May.

Speaker Change: And as we're thinking about Q2.

Speaker Change: Is that built on Q1, we're not looking for anything dramatically different we're looking kind of FERC continued incremental improvement because remember we're still managing some wholesale expansion. So we know that that will be pressure in the near term, but it's more about the incremental improvement.

Speaker Change: Understood. Thank you best of luck.

Speaker Change: Alright. Thank you. Thank you.

Speaker Change: Ladies and gentlemen, this concludes today's call. Thank.

Speaker Change: Thank you all for joining and you may now disconnect.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: [music].

Speaker Change: Yeah.

Q1 2026 Deckers Outdoor Corp Earnings Call

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