How did DECK's Direct-to-Consumer revenue surge impact Q3 2025 profits?

Deckers Outdoor's (DECK) Direct-to-Consumer (DTC) revenue surge had a significant impact on the company's Q3 2025 profits, contributing to the largest and most profitable third quarter in the company's history: 1. **Revenue Growth**: DECK's DTC channel experienced strong growth, with global revenue increasing by 16% compared to the previous year, reaching $1.2 billion. This growth was driven by consistent product performance, informed by consumer insights and infused with UGG brand codes, which resulted in exceptional levels of full-price sell-through and healthy margins for both the company and its partners. 2. **Gross Margin Improvement**: The surge in DTC revenue contributed to an improvement in gross margins, which increased to 60.3% in Q3. This improvement is a result of the company's successful brand-led philosophy and emphasis on innovation, which has allowed DECK to maintain a high degree of full-price business. 3. **Earnings Per Share Increase**: The increase in revenue and gross margin directly impacted the company's diluted earnings per share, which rose by 19% to $3. This growth in earnings is a testament to the company's strategic focus on building its brands and expanding its international business, which has led to consistent full-price growth and strong profitability. 4. **Operational Efficiency**: The success of DECK's DTC channel was supported by operational efficiencies in areas such as distribution, retail, and e-commerce. The company's commitment to investing responsibly in these areas, as reflected in its SG&A expectations, has contributed to the sustainable growth of its business. In conclusion, DECK's Direct-to-Consumer revenue surge has had a profound impact on the company's Q3 2025 profits, driving revenue growth, improving gross margins, increasing earnings per share, and enhancing operational efficiency. This success is a result of the company's strategic focus on building strong brands, expanding into international markets, and investing in sustainable business practices.