Deckers Outdoor's Q3 2025: Contradictions in HOKA's Growth Strategy and International Expansion

These are the key contradictions discussed in Deckers Outdoor's latest 2025 Q3 earnings call, specifically including: HOKA's growth strategy and market expansion, international growth expectations, and wholesale channel strategy:



Record Revenue and Profitability:
- Deckers Brands reported record revenue of $1.8 billion for Q3 fiscal 2025, representing a 17% increase over the previous year on a reported and constant currency basis.
- The growth was driven by the strong performance of both the UGG and HOKA brands, which delivered record quarterly revenues of $1.24 billion and $531 million, respectively.

Gross Margin Improvement and Full Price Selling:
- Gross margin for Q3 was 60.3%, up 160 basis points from last year's 58.7%.
- The improvement was due to favorable product mix, reduced closeouts to the wholesale channel, higher levels of full price selling for UGG, and favorable foreign currency exchange rates.

International and Channel Growth:
- Over the fiscal year-to-date, UGG and HOKA saw significant revenue growth in international markets, rising 28% and 29%, respectively, with balanced revenue growth across both direct-to-consumer and wholesale channels.
- Growth was driven by strong demand and balanced revenue growth strategies, with UGG experiencing double-digit growth in both acquisition and retention of consumers across its global markets.

Challenges and Market Management:
- The company acknowledged that increased and earlier inventory positions in Q3 allowed them to satisfy incremental consumer demand, potentially impacting Q4 performance due to a constrained supply.
- Despite these challenges, Deckers Brands maintains a disciplined long-term approach to managing brands, focusing on building brand health and sustaining high levels of full-price selling.