Deckers Outdoor Corporation (NYSE: DECK) topped $1 billion in quarterly sales for the first time. Net sales for the fiscal first quarter hit $1.02 billion, a 5.7% increase from $964.5 million a year ago. The result narrowly beat consensus estimates of $1.018 billion by $1.7 million. Diluted EPS of $0.94 came in $0.07 above the $0.87 estimate, remaining essentially flat with the prior year's $0.93.
The headline numbers look clean. The operating picture is more nuanced. Gross margin expanded 60 basis points to 56.4%, helped by a favorable channel mix. Higher-margin direct-to-consumer sales grew 13% to $352.8 million. DTC comparable sales rose 6.8% on a constant-currency basis, indicating the company is capturing more full-price demand through its own channels instead of relying on wholesale markdowns. That is a structural positive.
The problem was on the cost side. SG&A expenses jumped 12.7% to $419.9 million, consuming 41.2% of revenue versus 38.6% a year ago. That 260-basis-point deleverage more than offset the gross margin improvement, driving operating income down 6% to $155.3 million. The company did not break out the drivers of the SG&A increase. The magnitude relative to revenue growth suggests investment spending in brand marketing, DTC infrastructure, or international expansion rather than a one-off item. If this spending continues at this pace, operating margin compression could persist even as gross margins improve.
HOKA remains the growth engine, with brand revenue up 7.7% to $703.5 million. UGG, typically a second-half story due to its cold-weather focus, still managed a 4.9% increase to $278.0 million.