Dave Powers: Thanks, Sam.
Steve Fasching: All right. Thanks, Sam.
Operator: The next question comes from Laurent Vasilescu of BNP Paribas. Please go ahead.
Laurent Vasilescu: Good afternoon, thank you very much for taking my question, and congrats on such solid results. I wanted to ask about HOKA. Dave, I think you mentioned that HOKA International grew 44% in the quarter. If that’s the case, maybe can you just give a little bit of color, just what you saw by region, what’s driving that growth? I think you mentioned a little bit about Europe, but how did you think — how did you see the growth between wholesale and DTC? Was there a spread between that internationally? And maybe, Steve, I don’t know if you can maybe give us some guardrails of how you’re thinking about international HOKA growth for the year.
Dave Powers: Yes, so we can validate that number. I don’t know that it was exactly 44%, but the bottom line is that we are very excited about the growth that we experienced internationally. That’s been a focus of ours for across all of our brands. The international teams are doing a tremendous job by creating brand heat in that marketplace and then also managing the marketplace effectively across DTC and wholesale. The real strength of the growth that we saw in Q2 is really DTC-led, particularly in Europe, exceptional results. Now, smaller percent of our total business, but we think that speaks to the health of the brand and the demand for that consumer as we’re investing in more marketing in the region. The events that we mentioned, UTMB and the Ironman, were held in Europe, so there’s a lot of buzz around the brand there.
And we’re just getting better at managing that brand from a DTC perspective, investing in that team and the capabilities over there. So really, the growth is being driven primarily by the DTC channel. Wholesale is still strong, but as we said, in the U.S., we’re managing that tightly to create the excitement and the awareness, but still really ultimately drive the business to DTC, and that’s a formula we’re going to continue to lean on going forward. What was the other question? It was the third question. Over to Steve there.
Steve Fasching: So, Laurent, I think the number you quoted was total company international DTC growth. So, we didn’t provide the HOKA component. So, the total 44%, I think that you quoted, was total company international DTC growth. I think then, just your question on HOKA to me was a little bit about how do we see HOKA internationally expansion —
Laurent Vasilescu: For the year.
Steve Fasching: I think what we see, some of the trends that we’re seeing, are similar to what we saw in North America probably a year or 2 ago, right? So, how we’re seeing HOKA show up in the run community and then beyond the RUN community is similar, but further behind. And so, this bigger expansion, or faster growth in percentage terms, is another indication that that seems to be the case, that we’re seeing the HOKA brand resonate with consumers, kind of starts with runners, RUN community, and begins to build out as awareness grows. Very similar trend to what we’ve seen in North America. So, in that international arena, we’re a little bit behind where we were. Still very early innings for both domestic and international, but a little bit earlier on internationally, and that’s why we’re seeing those growth percentages high in total company, but you can extrapolate that to the HOKA brand as well.
Dave Powers: Yes, and the new store we opened in Covent Garden in London is off to a great start, and we’re seeing that formula play out, which is a mix of performance and everyday runners and lifestyle driving the results there. A lot of tourists experience the brand for the first time, and our stores, our own stores and our partner stores in China continue to perform well also.
Laurent Vasilescu: That’s great to hear. Thank you for that. And then, Dave, I think last quarter during the Q&A, you alluded to the launch of a new brand, that might be small, but maybe just can you give us an update where that stands and with the potential divestiture of Sanuk, does that give you capacity, just bandwidth, time, resources to potentially pursue M&A at the same time of launching a new brand?
Dave Powers: Yes, they’re really two separate events. It’s not that Sanuk was holding us back from building and launching a new brand, so we look at these separately as just fine tuning our model, just to speak to the Sanuk decision for a second, I’m really proud of how the teams have managed this brand over the last few years from a marketplace management standpoint, and the product right now is very, very strong. But what we’ve realized is that the journey to scale that brand so that it’s meaningful in our portfolio is just too long. There’s other things that we think we can invest in, and we think that this is a brand that the consumers love, it deserves a good home, and somebody who can is a priority for them versus a fourth or fifth brand in our portfolio.
So it’s a tough decision emotionally and financially, but I think it’s the best thing for the company and the brand to do this. With regards to the new brand we’re working on, I don’t want to give away too much to our competition, but we’re excited, we’re going to be taking the best of HOKA and UGG and all the learnings we have from those two brands and creating what we’re calling a super sneaker brand across various categories. We have the distribution channels, we have the DTC network, we have a lot of leverage in the marketplace and some really innovative, exciting products. It’ll be a long haul, but we think this is a space that is emerging and that we want to make sure that we have some skin in the sneaker game going forward beyond HOKA.
And then as far as M&A goes listen, we have enough organic growth here in our portfolio for the next foreseeable future in years. We’re always keeping our eyes on it. We’ve looked at a lot of opportunities and with regards to what it would do for our company financially and workload and disruption, nothing has come across our desk that we’re excited about yet, but it’s always top of mind for us and we’re continuing to look, but we think listen, we have Teva that has opportunity down the road and we think we can create a new brand and launch that and see if we can make some exciting inroads with both those brands while we focus our real efforts and attention on UGG and HOKA.
Laurent Vasilescu: Very helpful. Thank you very much for taking the questions.
Dave Powers: Thank you.
Operator: Our last question today comes from Janine Stichter from BTIG. Please go ahead.
Janine Stichter: Hi, congrats on the great quarter and thanks for fitting me in. Question on HOKA. Wanted to hear more about what you’re seeing at some of the more recent doors that you’ve been in over the last few years, Foot Locker, DICK’S, I think you’ve recently tested JD. Just curious what the sell-throughs look like there and if you have any thoughts on the type of consumer you’re getting, if it’s helping you kind of broaden the aperture of the consumer you reach with HOKA. And then on UGG, we’d just love to hear a bit more about international. I think you talked quite a bit about international strength at HOKA, but we’d just love to hear more about what you’re seeing there with UGG. And if the momentum is similar versus what you’re seeing in the U.S.? Thank you.
