HOKA Brand and DTC Channel Lead Revenue Growth
Net sales increased 5.7% year-over-year to $1,019.5M, powered by a 7.7% rise in HOKA net sales to $703.5M and a 4.9% gain in UGG net sales to $278.0M. Direct-to-Consumer (DTC) sales outpaced wholesale with 13.0% growth to $352.8M, while international revenue rose 8.4% to $502.1M.
SG&A Expansion Contracts Operating Margins
Operating margin compressed by 190 bps to 15.2% as SG&A expenses increased 12.7% year-over-year to $419.9M. The expense growth was driven by higher payroll ($12.5M increase) from headcount additions to support HOKA retail stores, marketing expenses ($10.3M increase), and IT investments.
Gross Margin Gains Offset by Tariff Pressures
Gross margin expanded 60 bps to 56.4%, benefiting from a favorable channel mix shift toward DTC and full-price selling. However, these gains were partially offset by the net impact of incremental tariffs on domestic goods sold.