Good afternoon and thank you for standing by. Welcome to the Deckers Brands’ Second Quarter Fiscal 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. [Operator Instructions] I would like to remind everyone that this conference call is being recorded. I will now turn the call over to Erinn Kohler, Senior Director, Investor Relations and Corporate Planning. Please go ahead.

Hello and thank you everyone for joining us today. On the call is Dave Powers, President and Chief Executive Officer and Steve Fasching, Chief Financial Officer. Before we begin, I would like to remind everyone of the company’s Safe Harbor policy. Please note that certain statements made on this call are forward-looking statements within the meaning of the federal securities laws, which are subject to considerable risks and uncertainties. These forward-looking statements are intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements made on this call today, other than statements of historical facts, are forward-looking statements and include statements regarding our anticipated financial performance, including but not limited to, our projected revenue, margins, expenses and earnings per share as well as statements regarding our strategies for our products and brands. Forward-looking statements made on this call represent management’s current expectations and are based on information available at the time such statements are made. Forward-looking statements involve numerous known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from any results predicted, assumed or implied by the forward-looking statements. The company has explained some of these risks and uncertainties in its SEC filings, including in the Risk Factors section of its annual report on Form 10-K and quarterly reports on Form 10-Q. Except as required by law or the listing rules of the New York Stock Exchange, the company expressly disclaims any intent or obligation to update any forward-looking statements. Please note that throughout this discussion there maybe references to certain non-GAAP financial measures for comparable prior year results. These non-GAAP financial measures refer to results before taking into account non-recurring charges that are not believed to be core to our ongoing operating results. Our non-GAAP financial measures are not adjusted for constant currency. While we do not have any non-GAAP financial adjustments for the second quarter of fiscal 2020, a reconciliation between our reported GAAP and non-GAAP results for the prior year can be found in our earnings release that is posted on our website under the Investors tab. With that, I will now turn it over to Dave.

Thanks, Erinn. Good afternoon, everyone and thank you for joining us today. The Deckers team has delivered yet another strong quarter. For the second quarter of fiscal 2020, revenue increased by 8% versus last year to $542 million. Gross margins came in above 50% and we delivered earnings per share of $2.71. These results are above the high end of our guidance range due to the outperformance in the HOKA ONE ONE brand as well as the strength seen through early shipments related to the UGG brands domestic business. During the second quarter, we continued to drive momentum in our key initiatives. As HOKA continued to experience explosive growth, UGG men’s boots increased by high-teens percentages, UGG women’s non-core expanded through the fluff franchise and our online performance was strong. The Deckers team is focused on the execution of these key initiatives and I believe our commitment to investing in marketing and innovation, have been central to the strength of our results. Our results also highlight the organization’s focus and discipline to drive healthy top line growth while maintaining our top tier levels of profitability. I will now review the brand highlights from the quarter starting with the fashion lifestyle group. The fashion lifestyle group consists of the UGG and Koolaburra brands. For UGG, global sales in the second quarter were up 2% versus the prior year to $405 million driven by continued strength domestically with some offsets in our EMEA region. The health of our domestic business has been driven by a clean marketplace. Thanks to our allocation and segmentation strategy as well as targeted investments in digital marketing and PR. UGG brands interest in the U.S. is up 11% in the quarter versus last year according to Google trends. In particular, we have seen another 20% plus increase…

Thanks, Dave and good afternoon everyone. As Dave just mentioned, we have tremendous momentum in the business and have delivered a record second quarter. This quarter is yet another example of the progress we have made in growing our brands while at the same time, delivering improved levels of profitability. And now I will walk you through some of the elements of the quarter. Revenue was $542 million, up 8% versus last year and above the high end of our guidance range of $515 million to $525 million of the better than expected performance approximately $10 million was driven by the HOKA brand with exceptional results both in wholesale and direct to consumer channels with the balance of the be driven by earlier domestic wholesale shipments for the UGG brand. Overall, gross margins were up 20 basis points over last year to 50.4% this result was an improvement of our implied guidance with the main drivers of the variance to expectation coming from savings from the utilization of less expensive freight options, an improvement from higher gross margin rates on closeout sales and the favorable mix with the HOKA brand increasing its penetration to the total company beyond what we had anticipated, including incremental growth in e-commerce. These partially offset by channel mix as wholesale grew faster than DTC. In terms of SG&A expense, our dollar spend was up 8.9% to $175.9 compared to last year’s GAAP spend of $161.5 million and up 9.1%, compared to last year’s non-GAAP spend of $161.2 million. Spend was aligned with how we guided the quarter. This increase versus last year was driven primarily by incremental marketing investments that have been put in place to drive awareness around the HOKA brand, UGG men’s product as well as the extended UGG women’s offerings. This all…

Thank you, Steve. As I look back in the first half of this year, I am encouraged by the progress we’ve made on our key initiatives. This includes investing in marketing to drive brand heat and awareness in HOKA UGG Men’s and UGG Women’s non-core, building our technology tools and talent base to advance analytical capabilities and drive efficiencies and how we connect with consumers, both existing and acquired and using innovation to develop incremental opportunities that can add value to our brand portfolio. I would like to thank all of the Deckers employees across the globe for their continued devotion to delivering strong results through the execution of our strategies. But before I turn the call over to Q&A as you may have seen in our earnings press release earlier this afternoon, Mike Devine has been appointed to the role of Chairman of the Board. Mike has been on the Board for the past eight years and assumes the role from John Gibbons. I look forward to working with Mike in this capacity. John will remain on the Board and I would like to thank him for his leadership as Chairman. The past few years have been transformational for Deckers and John has been a great partner in this journey. Jones’ insight and expertise has been instrumental in our progress and I am extremely grateful for his contributions to the Deckers organization. And as always, I would like to thank all of our stakeholders for their continued support. I am excited about the opportunities in front of us and the direction our organization is headed. With that, we will now open the call to Q&A. Operator?

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question today comes from Jonathan Komp of Baird. Please go ahead.

Thank you. I want to maybe start with the UGG brand and I am curious to hear a little more color, what you are seeing in the marketplace, I know you called out some earlier deliveries. I’m curious, maybe what drove that. And then as you look to the third quarter, just given how favorable conditions were last year. Any updated thoughts on what you expect over the next few months as cycle some of that favorability?

Jon, this is Dave. The early deliveries were just opportunistic. Couple of our accounts were open to receiving some inventory a little bit earlier and we took advantage of that. But the setup for the quarter looks good. As you know, we’ve been working particularly in North America to really clean up the channel going into the season, coming out of a strong last year the inventory is very clean the accounts are set up. We’ve had a little bit of a warm start in the season but the sell-throughs are still going to wholesale and I think we are poised with the diversification efforts in the segmentation and allocation plans for a good quarter. Obviously, as you heard there some softness still in the European market. A lot of that is by design with the segmentation and allocation strategy in the market reset coming out of the UK there but still some macro headwinds with Brexit going on in the malaise of the UK consumer, but all in all, I think the way that we have been focusing on a younger consumer, diversifying the product offering, managing the marketplace very tightly, working with our key wholesale partners and going into the back half of the year with increased marketing investment, we feel we’re in a solid position.

This is Steve. Jon, just to add on that as we look at the UGG domestic wholesale business, it’s good channel for us. It is relatively clean which is why our customers want product and we have an ability to ship on products, so we’ll take advantage of that. As Dave said, international will be down as we reset Europe but other than that all the signs are good at this point and the product is resonating.

We are hearing of some softness in the channel at a macro level. Obviously there is some news out there about top line softness and some of the wholesale partners managing tightly with their inventory. But as far as our brands that are particularly with UGG, Koolaburra and HOKA. We’re still seeing healthy demand and good positioning.

That’s encouraging to hear. Maybe one on HOKA then just given that when I look over, even though the trailing 12 month basis, I think you’ve added about $100 million of revenue to the brand which is quite impressive. I’m just wondering as you breaking through to the next phase of growth, any updated thoughts on the team and the infrastructure and kind of the level of investment in place to support the growth, maybe longer term as some of the inventory constraints to become less so?

I think one of the beauties of Deckers and platform that we’ve been working on over the last few years to really improve our capabilities across the board is to be able to support the growth in the hyper growth of the HOKA brand and obviously with the margin profile of that brand, the efficiencies we’ve created across the organization, we’re well positioned to continue to invest not only just in marketing dollar but innovation design, sourcing of that brand and for the distribution globally. So it’s exceeding our expectations. We’re in a little bit of chase mode on inventory, but we’re in good shape to be able to capture as a demand at this point. We are planning for continued strong growth in that brand. And so you’ll see as we guide the beginning going into FY ‘21 continued investment to be able to continue the growth of that brand and it’s really a global opportunity. As you know, North America wholesale and DTC is very strong for that brand, but we’re seeing tremendous growth still in Europe, Japan and we haven’t really started going after China yet. So very pleased very excited with the acceptance and the demand coming from the consumer. The innovation pipeline is still strong and the signs that will be coming out in the next 6 to 12 months we feel we’ll continue that momentum and we’re going to continue to invest in it.

And great international opportunity.

Yes.

Continuing to see kind of that brand resonate on an international front and a lot more opportunity on that international front.

Great. And maybe just last one if I could maybe a bigger picture for the organization, Steve or Dave, you are planning this to be the third year of mid single-digit top line growth and you’ve reset the operating margin back to 15% here, just any broader thoughts on you kind of the growth trajectory going forward for the company and any sort of kind of algorithm even at a high level to think about as a sustainable level?

Yes. We worked hard to get to this point and I give the teams a lot of credit for their discipline while at the same time, we’re really building strong healthy brands across our global marketplace and I think for us, there’s no looking back we’re continuing down this path. We think that we have some very meaningful and important brands for the consumer and our wholesale partners and we believe that we can continue this level of growth in mid-single digits and then 15% operating margin for the foreseeable future for sure.

Okay. I appreciate all the color. Thank you.

Thanks. Jon thanks.

The next question today comes from Jim Duffy with Stifel. Please go ahead.

Thanks. Good afternoon. Couple of questions from me. The first I wanted to ask about the purposeful turn in the European business. Dave, can you give us some milepost to look for your progress with that. I know you’ve been through this before in the U.S. market. When do you expect to come out the other side with the European business?

As we said before, it’s a multi-year strategy and we do have proof of concept with the strategy in North America, which took us 2 to 3 years to really get to the real strength of where we are now. So I would expect the same in Europe. This is really the first time that we have been pulling back on inventory with the allocation strategy and reducing the amount off price sales, part of what you’re seeing in the takedown of the projection this year is the decision to not chase off price sales we’re more focused on creating a healthy and long-term position for the UGG brand versus chasing a revenue number and I think that’s the right thing to do. The teams have been working very hard on the allocation strategy there and making sure that each account is differentiated point of view and going after the right consumer with the appropriate product. My sense is, we’ll come out at the end of this year in a much better inventory position and cleaner marketplace and then we can really start the reset going into FY ‘21 footfall ‘20.

Great. And Dave wanted to ask about the HOKA brand, you have had some good success with non-performance running styles, the hiking boot, Opana shoes, can you talk a little bit about opportunities you see beyond just the performance running category for the HOKA brand?

The first thing I would say is all of the product is performance-based and they’re all built for running as our core and running in hiking obviously is our core target. That being said, a lot of our styles are being adopted by a non-runner consumer both on the fashion side as you see some of the HOKA brand and kind of the top fashion boutiques across the globe which is very exciting. But I think more importantly the average consumer from an athletic standpoint people are wearing HOKA, starting to run again or from our casual lifestyle perspective but the performance attributes of that ultra lightweight cushioned performance in that ride resonates with the casual consumer as well. And so I think you’re starting to see a lot more consumers adopt it because they just love how it feels and hopefully some of those consumers are also getting back into running again at the same time.

Great, thank you.

Yes.

The next question today comes from Sam Poser with Susquehanna. Please go ahead.

Good afternoon and thanks for taking my questions. Could you give us the breakdown of where the where this expected incremental promotional activity is supposed to come from? Because I believe in Europe you have promotional last year. So can you just walk through that expectation, I guess both in Q3 and Q4?

Sam, so we’re expecting in our guidance increased level of promotion over last year. We think that will be wholesale with some of the retailers that we’re working with so that’s what we’ve embedded. We’ll see how it plays out, right? The biggest part of our season is still ahead of us. We’ll see how the consumer shows up. Early signs are good sell through, clear inventory. So it’s a kind of a wait and see and we’ll see kind of what happens but where it’s mostly factored is kind of in wholesale with a little bit that you’ll see in our DTC business.

Yes. And as you said Sam, we’re not expecting to play into that to need to do that in the European business but we do have the ability to do that if necessary in North America wholesale and I think as we have discussed on the last call, if there is upside to the seasons is probably more on the margin side than the sales right.

And could you give us some idea of what you expect the gross margin to be in the third quarter?

So we’re kind of implied in our guidance, it’s roughly down about 90 basis points from last year.

Got it. And then and then also are there expenses, I know you’re switching this variable model, but are there expenses looking ahead that you sort of expect to fall away next year given some of the work you’re doing in the international markets that should some of that probably money do maybe close more stores and so on so forth. Can you give us some idea there sort of just look at ahead?

We haven’t given anything out on ‘21. It’s something clearly that we’ll look at, I wouldn’t right now factor in kind of anything from a significant expense reduction, a lot of the work that we’re doing is kind of with the infrastructure that we have. So once we get back to growth, we will need infrastructure to support that growth. So there will be able to kind of use our existing infrastructure to lever growth as we return to growth on the International. So from that standpoint again, we haven’t given guidance on next year but I wouldn’t expect a significant fall off. I think to the earlier question about how we look at our P&L profile looking at a 15% operating margin we’re going to spend appropriately as we have now seen a lot of our gross margin efforts come through and then the shift to variable that we’re talking about is really about how we invest more in marketing to drive the initiatives to build brand awareness around the things that we’re doing so building awareness with HOKA, building awareness with men with UGG building awareness with spring-summer women’s UGG as well. And when we look at that is still a lot of opportunity.

Thank you. I have two last questions. One, what tax rate do you expect for the third quarter? And lastly, could you give us the direct or the wholesale sales by brand so we don’t have to wait for the queue. So it’s easier to model everything going forward, please. Thank you.

So the tax rate for Q3, we haven’t given that but there is going to be some fluctuations between Q3 and Q4 but roughly, we’re kind of modeling it like 21%-ish rate for Q3. And then I think your second question was just be – sorry, it was the wholesale breakout for UGG in Q2?

For the wholesale for the DTC breakout by brand for the second quarter that comes out in the queue, but it really would help us model everything, if you could give us one or the other and we can back into the other one.

Yes. I can take that. So you want it in total wholesale?

No, like UGG wholesale is this Teva wholesale was this, Sanuk sale was this and so on.

Sure. Got it. So of the 542, 332 was UGG brand wholesale, roughly 51 million was HOKA brand wholesale, Teva with 17, Sanuk was 8 and Koolaburra was around 25.

Thank you very much. Continue success.

Thanks.

The next question today comes from Ross Licero with Telsey Advisory Group. Please go ahead.

Thanks for taking my questions and congratulations on the quarter. Just had a question, we’ve been hearing a lot about sustainability in the market right now, can you talk about what you’re doing for that and how your messaging it to the customer?

That’s it’s a great question and I think if have been our Deckers website. I’ll start there, couple of years ago we put out some sustainability goals we call 7 x 27 that have guided a lot of the activities around sustainability for Deckers but also each of our brands and over the last 3 to 6 months each of the brands is doing individual work to improve the way they operate across the planet, both in product and kind of operational periods as well. I can’t get into all the specifics that are happening right now but there is work being done and you’re going to see some more conversations happening in the marketplace with each of our brands around efforts they are making, but it’s probably best at a brand level versus the Deckers level to focus into that because there is unique approaches to this space based on the brand positioning and the relevancy in that marketplace and for the consumer, But I am excited to say that is something that Deckers as an organization is taking seriously. We are standing behind it with our global 7/27 goals and within each of the brand and the work that they’re doing and I think you will see some continued evolution in the product that we’re bringing to market on the short term.

Okay, great. Thanks. And on the men’s side, you said the Men’s boots were up double digits. But can we get a little more color on men’s overall?

Men’s overall UGG for Q2?

Yes.

So other than just men’s is growing faster than the average overall so men’s is up more than the average.

Okay, great. Thanks a lot.

It’s really focused on Q3. If you’ve seen our Neumel we kind of Neumel nation marketing campaign their efforts in the script very great, very positive response to that campaign. As we said that’s driving interest of the brand and traffi, but the product is really a Q3 products, you should see the bigger impact of that business happening over the next couple of months, focused on the Neumel and winter boots.

great, thanks.

The next question today comes from Paul Lejuez of Citi Research. Please go ahead.

Thanks guys. Can you talk about gross margin trends by channel? What was the most channels with the driver of the improvement this quarter when you look at each channel relative to itself. Also curious if you’ve seen a lot of fluctuations or inconsistency with the inconsistent weather out there and I guess I’m kind of curious how you would look at, what percent of your assortment, would you consider weather-dependent this year versus what percentage it was last year? Thanks guys.

Yes, let me walk you a little bit, maybe just through the margin walk rather than kind of breaking it out. So a year ago we were at 50.2, this year we’re at the 50.4, so 20 basis point improvement, about 50 basis points of improvement through margin expansion. So that’s just achieving better margin on product as we continue to work on those efforts. We had, as I mentioned, part of the driver of the increase in our margin was really kind of better full price selling so less promotion better margins on our close out that was about 80 basis points. And then we have a take away really from FX about 70 basis points. The channel mix, because we had more wholesale growth that was about a 20 basis take away. And then kind of miscellaneous other stuff, roughly 20 basis point. So that’s kind of the lock on the year-on-year.

Yes and with the before price selling benefit in both channels there? Were you referring to both channels there?

Yes, I mean you could where we’re doing closeout out. So where we have reduced selling online was better as well as some of our traditional closeout through.

And with regards to the weather question, for the UGG brand generally speaking, the whole brand is somewhat weather-dependent with the exception of probably slippers but what we’ve been doing over the last few years is to reduce our dependency on cold weather-related products. So for example we have reduced the reliance on core classic, we brought a lot more fashion boots into the assortment across men’s and women’s. I think some of the diversified product that you’ve seen toward the younger consumer is a less weather-dependent diversifying into men’s is less reliant on the core classic business. So we’re used to be kind of a one-trick pony, which is at the core classic across all the channels, the diversification efforts, fashion ability of the brand, the diversification across new consumers has given us more fashion relevance and less weather-dependentcy across the board and I think that served well last year and it’s only stronger this year and it gives us something that’s going to continue to evolve. So it’s less certainly we’re still dependent on the weather just like everybody else’s but I think we’re much more fashion relevant to the consumer now that is looking for product from just beyond kind of cold weather product.

So have you actually seen more consistency in the business, even though the weather has been inconsistent as a result of those strategies?

I would say so.

I would say we’ve seen improvements in other weather-dependent categories. Absolutely.

Got it. Thank you, guys. Good luck.

Thanks.

The next question today comes from Tom Nikic with Wells Fargo. Please go ahead.

Good afternoon and thanks for taking my questions. Quick one on the gross margins, I think you said Q3 should be down 90-ish basis points which would mean that Q4 would be down quite a bit. Basically double that amount in basis points, is that just a function of the hard multi-year compares is it tariffs, any sort of color around that would be helpful.

Sure. So you are right Tom. You’ve kind of got the numbers right. That is how we’re looking at the back half of the year. It’s a combination of the things that you mentioned. The big point will be the comparison that we have to last year. So we are assuming a higher promotional back half than what we saw last year. As you recall, last year was a pretty exceptional back half of the year, as we saw sell-through at full price incredibly strong, so not what we normally see which is kind of why we’re taking a slightly more conservative approach as we look at the back half of this year but that will be the biggest component of the take-back, we’ll see how the season plays out but we do have higher promotional environment factored into the back half. And then there is always a component of FX in there and then you’ll have some impact potential with the tariff piece. So that’s kind of how we are looking at it and we’ll see how it plays out in terms of what the margin is, but you are right. And the biggest component of that will be our assumption around a more promotional environment than what we saw last year in the back half.

That’s helpful. Thanks. Just a longer term picture about HOKA, I think obviously it’s one of the more interesting, a long-term growth stories in the footwear space, based on your guidance this year, it’s going to get to something in the $300 million to $350 million range, Is there any sort of multi-year target, you can give some sort of potential revenue base for the brand that you could see in the next couple of years?

This is Dave. We are not ready prepared to give that kind of guidance right now. I will say that we do think this has significant upside and the strength of the brand you’re seeing now, we see that continuing going into FY ‘21 and beyond our sights are set above over the next 2 to 3 years, 500 million and beyond.

Got it. And just a quick another one on HOKA, I know you’re still early stages international there. Could you give us some sort of sense as to what the domestic versus international split is for the HOKA brand?

Yes, it’s still about two-third domestic, one-third international.

Alright. Thanks very much.

Okay. Thank you.

The next question comes from Janine Stichter of Jefferies. Please go ahead.

Hi, good afternoon. Thanks for taking my question. Just one more on the gross margin, I think you called out less expensive freight is a driver as well, I just trying to understand what’s going on there. I think last year it was a driver of gross margin that you didn’t expect it to continue. And then I think you’d called out planning to use more expensive freight in the second quarter this year. So is there anything structural going on there with how you’re looking at freight and how should we think about that continuing?

I think the way we are looking at freight historically up to last year we used more air freight. I think we’ve gotten better at bringing product in, so that’s help alleviate some of that need to bring in air freight. We have used a little bit more this year than we did last year as we’re bringing inventory in where we see spikes in demand largely like HOKA. So I think we are demonstrated by our margin improvement, we are better at how we’re bringing product and we’ve been working with our factories doing better job level loading them, that’s helping us bring inventory in. It’s also helping us schedule a little bit better. It is also showing up as we bring inventory in a little bit earlier as well. So I think through a lot of the efforts and the margin improvements that we’re achieving, we’re kind of seeing that pay off. So, we’ll always use some air freight. We didn’t use quite as much as what we had anticipated in our guidance in Q2. We did use some but not nearly to the extent that we thought we would and it’s something that we’ll continue to look at. So, to your question things have changed and improved. I think we’re doing a slightly better job but there will always be cases where you’re going to have to use some of it, especially when you have kind of hot product and a brand that’s in demand like HOKA. General cost of freight overall is not coming down.

That’s helpful. Thank you. And then just one question on the fluff franchise, it sounds like that’s still growing nicely and a more than a year and now, can you talk about where that growth is coming from. Is it new accounts, is it deeper penetration in the accounts already in, and then how are you seeing the customer you acquire from that franchise as she buying other booth there how are you seeing her migrate outside of the Fluff in the fuzz?

It’s a great question and it’s something that we’re really excited about on a number of fronts. First is we are attracting a younger consumer and a large portion of that consumer is first-time purchases to our website. So it’s serving as a vehicle for acquisition as well as driving the business for us in the short and long term. So we’re going to continue the diversification efforts still using key partners in those use accounts to reach that consumer but it really is across the board where it’s worth performing at least in North America, that style isn’t resonating as well in places like China and outside of the UK just yet but the demand for that product going into the back half of the year and into next year is very strong and we think this is a franchise that we can build on through continued diversification efforts and design and marketing and distribution efforts for quite some time.

Great. Thank you very much.

Thank you.

The last question today comes from Mitch Kummetz of Pivotal Research. Please go ahead.

Thanks for taking my questions. Steve, I was hoping you could reconcile a couple of pieces of the guidance for me, I think you said for Q3 UGG’s flat but I think you said that U.S. would be up and then I know you also said that UGG reorders equal cancellation. So I know last year that was a net positive, including the US. So I’m trying to understand how if the reorder or cancellations side of its worse but domestic I still is the difference that you expect DTC to grow a lot or that the order book going into Q3 is a lot stronger than a year ago. I’m just trying to understand how you get there.

Yes. The piece, I think that you might be missing is the UGG international wholesale is down and that’s driven by the reset that we’re talking about in Europe as well as a currency impact on our international business.

I get the international, I mean, specific to the U.S. because you expect U.S. to be up, but I would think that in the U.S. the reorder cancellation piece you’re expecting worse than a year ago. So it seems like the difference with NBTC or the order book and I don’t know if that’s the case.

Yes, it’s – we are up, it’s a small number.

Okay. And then also for Q3 you’re saying gross margin now down 90 bps, I know you’re expecting more promotions this year than last, can you say how much of the down 90 is specific to the promotions. I mean is it like down 100 or down 200 in the promotions and there is puts and takes elsewhere that gets you to 90, just trying to understand how much your, yes?

You nailed it. So the promotion is down more than the total because we have some positive offsets.

Okay. And then I guess maybe just one last one since I am last in the queue, when you’re given the numbers to Sam, it plays in my model and it looks like UGG DTC was down roughly 5% in the quarter, is that just all about the reduction in store comp? Is there any way you can speak to kind of at the comp performance of UGG, DTC was that up in the quarter?

So DTC on the 542 was, call it $99 million. A year ago we did just under $94 million. So the total DTC was up, now that will be all brands.

And a lot of that was HOKA. I mean HOKA e-commerce was up huge. I think Hoka DTC it looks like just by the numbers you gave was up like 100% I was trying to understand what the UGG DTC did in the quarter, if you get that specific, maybe not?

You will see it on the queue when it comes out, but the UGG DTC was down and the down will be some fewer retails as well as more challenge in retail.

Okay. Alright. Thanks for your help. Good luck.

Okay.

This does conclude our question-and-answer session as well as the conference. Thank you for attending today’s presentation. You may now disconnect your lines.