DECK Q1'27 Conference Call Notes

Three things from Deckers Brands's call, starting with: The sleeper: HOKA's franchise segmentation strategy is quietly unlocking premium pricing power

Three things that matter from Deckers Brands (DECK) in its Q1’27 call:

1. The sleeper: HOKA’s franchise segmentation strategy is quietly unlocking premium pricing power: Six franchises now generating $100M+ annually with new ‘Pro’ tier commanding higher ASPs; Clifton Pro already driving reorders after just 2 weeks. Management: ‘The introduction of HOKA brand technologies is helping create more structure and differentiation... supporting premium price points.’

2. The obvious: Beat-and-raise quarter masks wholesale timing headwinds that get worse in Q2: Q1 revenue up 5.7% to $1.02B beating guidance, but Q2 growth decelerates to ~5% due to wholesale shipment delays that magically fix themselves in H2. The binding constraint: international logistics, not demand.

3. The red flag: Gross margin guide assumes 12.5% tariff rate but they’re sitting on $120M+ in potential refunds: Management raised tariff assumptions from 10% to 12.5% while simultaneously pursuing IEEPA refunds they won’t quantify timing on. Classic sandbagging or genuine conservatism?

Disclosure Quality: B- | Financial Quality: C

Track DECK’s promise history and grade trend: callsheetdaily.com/tickers/deck

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Delta Sheet

• ▼ Revenue: $1.12B (+10% YoY) → $1.02B (+5.7% YoY) (-430 bps deceleration)

• ▲ EPS: $0.96 vs $1.00 prior year → $0.94 vs $0.93 prior year (Back to growth after Q4 decline)

• ▼ HOKA Revenue: $671M (+15% YoY) → $704M (+8% YoY) (-700 bps deceleration)

• ▼ UGG Revenue: $409M (+9% YoY) → $278M (+5% YoY) (-400 bps deceleration)

• ▼ Gross Margin: 57.6% → 56.4% (-120 bps sequential decline)

• ▲ DTC Growth (Total Company): Not disclosed → +13% YoY (DTC accelerating vs wholesale)

• - HOKA DTC Growth: +18% YoY → +17% YoY (Slight deceleration but holding strong)

• ▲ Inventory: $487M (-2% YoY) → $808M (-5% YoY) (Inventory discipline intensifying)

• ▲ Share Buybacks (Quarter): $262M → $338M (+29% increase in capital returns)

• - Cash & Equivalents: $1.9B → $1.6B (-$300M after buybacks)

• ▼ HOKA Wholesale Growth: +13% YoY → +3% YoY (-1000 bps deceleration on timing)

• ▲ SG&A as % of Revenue: 43.6% → 41.2% (240 bps improvement)

• ▼ Operating Cash Flow: Not disclosed → Not disclosed (Management stopped reporting quarterly OCF)