Deckers faces risks from fluctuating consumer preferences, global economic trends (currency, interest rates, commodity prices, recession), competition, supply chain disruptions, labor shortages, weather impacts, material availability, manufacturing capacity, geopolitical tensions, IT system disruptions, tax regulations, and the value of intangible assets. Potential write-downs or impairment charges are also a risk. The company is involved in various legal proceedings, which could lead to material losses. Customer concentration and currency concentration risks are also noted.
Financial Upside
Deckers experienced a 20.9% increase in net sales in the six months ended September 30, 2024, driven by growth in both wholesale and DTC channels, particularly for the HOKA and UGG brands. Gross margin increased, and income from operations and diluted earnings per share also saw significant growth. Favorable brand mix, higher margin products, and reduced closeouts contributed to these improvements. Higher interest income from increased cash balances is also a positive factor.
