Actions of Deckers Brands (BRIDGE 0.71%)which develops and sells innovative footwear, clothing and accessories, jumped 13.6% in Thursday’s after-hours trading session, following the release of a better-than-expected report for the second quarter of fiscal 2025 (ended September 30).

Deckers has an impressive track record of strong growth that meets Wall Street’s expectations, and its second-quarter report continued that streak. The quarter’s revenue and profit both crushed analysts’ consensus estimates. Additionally, management increased its guidance for fiscal 2025, both in terms of revenue and net income. This is the second consecutive quarter in which the company has raised its annual profit forecast.

Image source: Marques Deckers.

The key figures of the Deckers brands

Data source: Marques Deckers. The second quarter of fiscal 2025 ended September 30, 2024. *Adjusted to account for the 6-for-1 stock split in September.

Gross margin for the quarter was 55.9%, up from 53.4% ​​a year earlier.

Deckers ended the quarter with cash and cash equivalents of $1.23 billion, up from $823.1 million a year ago, and no long-term debt.

Revenue breakdown by brand, channel and geography

Data source: Marques Deckers. YOY = year after year. *Deckers sold Sanuk on August 15 and therefore only recorded sales for half the quarter.

HOKA has driven Deckers’ growth, as the brand’s running shoes, in particular, have gained popularity in recent years. UGG’s premium sheepskin boots and slippers have been perennial consumer favorites for some time.

Data source: Marques Deckers.

Data source: Marques Deckers.

What management had to say

Here is the statement from CEO Stefano Caroti in the results release:

HOKA and UGG delivered exceptional results in the second quarter, driven by strong consumer demand for our innovative and unique products. As I step into the role of CEO, I am committed to building on our proven foundation to support growth, guided by our consumer-first mindset, brand-first philosophy, innovation-driven products and our global focus. Our dedicated teams’ continued execution of Deckers’ long-term strategy positions our company well to achieve an improved outlook for fiscal 2025.

Annual objective raised

Management’s guidance for fiscal 2025, which ends March 31, 2025:

• Revenue is now expected to increase 12% year-over-year to $4.8 billion. Previous forecasts called for growth of 10%.
• EPS is now expected to be between $5.15 and $5.25, which equates to 6-8% growth. Previous EPS guidance was $4.96 to $5.11.
• (EPS guidance is adjusted to account for the company’s 6-for-1 stock split in September.)

A title worthy of being on your watchlist

In short, Deckers delivered another strong quarter and there are signs of continued strong growth in both revenue and bottom line.

Deckers stock is one of the best shoe stocks in the market and deserves a place on growth investors’ watch lists. It has recorded notable outperformance compared to the broader market in both the short and long term.