Deckers Brands is a global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories, and the question for the next twelve months is whether the company can convert the $1.020 billion Q1 FY2027 net sales up 5.7% year over year or 4.8% in constant currency, the 7.7% Q1 FY2027 HOKA brand net sales growth to $703.5 million, the 4.9% Q1 FY2027 UGG brand net sales growth to $278.0 million, the 18.1% Q1 FY2027 Other brands net sales decline to $37.9 million, the 2.2% Q1 FY2027 Wholesale net sales growth to $666.7 million, the 13.0% Q1 FY2027 Direct-to-Consumer net sales growth to $352.8 million, the 6.8% Q1 FY2027 DTC comparable net sales growth, the 3.2% Q1 FY2027 Domestic net sales growth to $517.4 million, the 8.4% Q1 FY2027 International net sales growth to $502.1 million, the 56.4% Q1 FY2027 gross margin up 60 basis points year over year, the $419.9 million Q1 FY2027 SGA expenses, the $155.3 million Q1 FY2027 operating income, the $0.94 Q1 FY2027 diluted EPS up 1.1% year over year, the $1.603 billion Q1 FY2027 cash and cash equivalents, the $807.6 million Q1 FY2027 inventories, the $338.2 million Q1 FY2027 share repurchases at weighted average price paid per share of $103.79, the $4.7 billion remaining under stock repurchase authorization, the no outstanding borrowings, the raised FY2027 diluted EPS guidance to $7.35 to $7.50, the maintained FY2027 net consolidated sales guidance of $5.86 billion to $5.91 billion, the maintained HOKA increase by a low-double-digit percentage versus last year, the maintained UGG increase by a mid-single-digit percentage versus last year, the gross margin now expected to be slightly better than 56.5%, the SGA expenses as a percentage of net sales still expected to be approximately 35%, the operating margin now expected to be slightly better than 21.5%, the effective tax rate still expected to be approximately 23%, the surpassing $1 billion of first quarter revenue for the first time, the continued strength of HOKA and UGG, the growing global demand, the compelling product innovation, the building deeper connections with consumers across geographies and channels, the remaining focused on advancing premium brands, the executing with discipline against long term strategies, the Koolaburra brand standalone operations phase-out, and the 80% of the projected fiscal year 2027 free cash flow share repurchase into the kind of Hoka-and-UGG-Global-Expansion and Premium-Footwear operating leverage the company has been telegraphing. The Q1 FY2027 print was the cleanest test of that thesis, and the cleanest signal is that President and CEO Stefano Caroti said "Deckers delivered a solid start to the fiscal year, surpassing $1 billion of first quarter revenue for the first time. This performance reflects the continued strength of HOKA and UGG, with growing global demand as both brands extend their reach through compelling product innovation. As we build deeper connections with consumers across geographies and channels, we remain focused on advancing our premium brands and executing with discipline against our long term strategies." The strategic tension is the 18.1% Other brands decline against the 7.7% HOKA growth, and the forward question is whether the HOKA and UGG global demand can compound the DTC growth into the raised FY2027 guidance the company has been telegraphing.
The $1.020 billion Q1 FY2027 net sales and the 5.7% year-over-year growth are the cleanest read on the operating momentum, and the surpassing $1 billion of first quarter revenue for the first time is the proof. The Q1 FY2027 net sales of $1.020 billion grew 5.7% above the prior-year quarter's $964.5 million. The Q1 FY2027 constant currency net sales grew 4.8% above the prior-year quarter.
The Q1 FY2027 HOKA brand net sales of $703.5 million grew 7.7% above the prior-year quarter's $653.1 million, the Q1 FY2027 UGG brand net sales of $278.0 million grew 4.9% above the prior-year quarter's $265.1 million, the Q1 FY2027 Other brands net sales of $37.9 million declined 18.1% below the prior-year quarter's $46.3 million, the Q1 FY2027 Wholesale net sales of $666.7 million grew 2.2% above the prior-year quarter's $652.4 million, the Q1 FY2027 Direct-to-Consumer net sales of $352.8 million grew 13.0% above the prior-year quarter's $312.2 million, the Q1 FY2027 DTC comparable net sales grew 6.8%, the Q1 FY2027 Domestic net sales of $517.4 million grew 3.2% above the prior-year quarter's $501.3 million, the Q1 FY2027 International net sales of $502.1 million grew 8.4% above the prior-year quarter's $463.3 million, the Q1 FY2027 gross margin of 56.4% was 60 basis points above the prior-year quarter's 55.8%, the Q1 FY2027 SGA expenses of $419.9 million was above the prior-year quarter's $372.6 million, the Q1 FY2027 operating income of $155.3 million was below the prior-year quarter's $165.3 million, the Q1 FY2027 diluted EPS of $0.94 grew 1.1% above the prior-year quarter's $0.93, the $1.603 billion Q1 FY2027 cash and cash equivalents, the $807.6 million Q1 FY2027 inventories, the $338.2 million Q1 FY2027 share repurchases, the 3.3 million Q1 FY2027 shares repurchased, the $103.79 weighted average price paid per share, the $4.7 billion remaining under stock repurchase authorization, the no outstanding borrowings, the raised FY2027 diluted EPS guidance to $7.35 to $7.50, the maintained FY2027 net consolidated sales guidance of $5.86 billion to $5.91 billion, the maintained HOKA increase by a low-double-digit percentage versus last year, the maintained UGG increase by a mid-single-digit percentage versus last year, the gross margin now expected to be slightly better than 56.5%, the SGA expenses as a percentage of net sales still expected to be approximately 35%, the operating margin now expected to be slightly better than 21.5%, the effective tax rate still expected to be approximately 23%, the 80% of the projected fiscal year 2027 free cash flow share repurchase, the surpassing $1 billion of first quarter revenue for the first time, the continued strength of HOKA and UGG, the growing global demand, the compelling product innovation, the building deeper connections with consumers across geographies and channels, the remaining focused on advancing premium brands, the executing with discipline against long term strategies, the Koolaburra brand standalone operations phase-out, the Goleta, California corporate headquarters, the global leader in designing marketing and distributing innovative footwear apparel and accessories positioning, the HOKA positioning, the UGG positioning, and the underlying operating profile is the cleaner read on the segment-level performance the company is producing.
The strategic question the company is working through in FY2027 is the Hoka-and-UGG-Global-Expansion pivot and the Premium-Footwear positioning. The CEO commentary in the most recent earnings release described the company as having "Deckers delivered a solid start to the fiscal year, surpassing $1 billion of first quarter revenue for the first time. This performance reflects the continued strength of HOKA and UGG, with growing global demand as both brands extend their reach through compelling product innovation" and as "as we build deeper connections with consumers across geographies and channels, we remain focused on advancing our premium brands and executing with discipline against our long term strategies." The CFO commentary described the company as having "the Company also provided an update to its financial outlook for the full fiscal year ending March 31, 2027" and that "net consolidated sales are still expected to be in the range of $5.86 billion to $5.91 billion. HOKA is still expected to increase by a low-double-digit percentage versus last year. UGG is still expected to increase by a mid-single-digit percentage versus last year. Gross margin is now expected to be slightly better than 56.5%. SGA expenses as a percentage of net sales are still expected to be approximately 35%. Operating margin is now expected to be slightly better than 21.5%. Effective tax rate is still expected to be approximately 23%. Diluted earnings per share is now expected to be in the range of $7.35 to $7.50, reflecting an increase of five cents versus the prior outlook. The earnings per share guidance assumes the repurchase of shares with a value equal to approximately 80% of the projected fiscal year 2027 free cash flow." The strategic intent is to position the company for the Hoka-and-UGG-Global-Expansion pivot and the Premium-Footwear positioning, and the strategic intent is the source of the operating profile the company is producing.
The macro context the company is operating in is the broader global premium footwear market, with the global premium footwear market showing meaningful growth driven by the continued strength of HOKA and UGG, with the U.S. premium footwear market showing meaningful growth, and with the broader global footwear market showing modest growth. The macro context is the source of the $1.020 billion Q1 FY2027 net sales, the 5.7% Q1 FY2027 net sales year over year growth, and the 7.7% Q1 FY2027 HOKA brand net sales growth the company is producing, and the macro context is favorable for the global premium footwear operating profile.
The shareholder return program is the second structural feature, with the company executing the share repurchase program. The $338.2 million Q1 FY2027 share repurchases, the 3.3 million Q1 FY2027 shares repurchased, the $103.79 weighted average price paid per share, the $4.7 billion remaining under stock repurchase authorization, and the 80% of the projected fiscal year 2027 free cash flow share repurchase are the cleanest single read on the capital-return profile the company is producing.