Deckers Outdoor (NYSE:DECK) shares are trading lower on Friday after the company reported mixed second-quarter results. Several analyst lowered the price forecast on the stock following the results.
Adjusted EPS of $2.31 beat analyst estimates of $1.80, according to Benzinga Pro. However, revenue rose 3.5% year-over-year (Y/Y) to $1.48 billion, falling short of the $1.51 billion consensus estimate.
Third-Quarter Guidance Points to Modest Growth
For the third quarter of fiscal 2027, Deckers expects low-single-digit revenue growth, with HOKA projected to grow in the low- to mid-single digits and UGG in the low single digits.
EPS is expected to range from $3.52 to $3.60, including an estimated $0.24 benefit from net tariff refunds.
Management expects international strength to continue, partly offset by ongoing pressure in the U.S., particularly in direct-to-consumer sales.
HOKA Growth Outpaces UGG as Direct Sales Face Pressure
HOKA revenue grew 7% Y/Y to $677 million. Wholesale sales increased 9% to $444 million, while direct-to-consumer (DTC) revenue rose 4% to $234 million. Bondi and Clifton Pro supported performance, although increased U.S. promotions pressured domestic DTC sales.
UGG revenue increased 4% Y/Y to $786 million. Wholesale sales rose 7% to $641 million, while DTC revenue declined 8% to $146 million. Demand for select seasonal styles and growing interest in apparel supported UGG’s broader premium lifestyle positioning.
Other Brands revenue fell 54%, primarily due to the wind-down of standalone Koolaburra operations.
International Growth Offsets U.S. and Logistics Challenges
International markets drove growth, led by Asia-Pacific. However, logistics disruptions in Europe, the Middle East and Africa (EMEA) delayed shipments and reduced quarterly revenue by approximately $22 million.
Management has taken corrective action to address the disruptions.
In the U.S., increased athletic footwear promotions and price-conscious consumers pressured e-commerce performance.
Deckers continues to prioritize full-price selling to protect margins and maintain its premium brand positioning.
Fiscal 2027 Outlook
Deckers raised its fiscal 2027 GAAP EPS guidance to $7.80–$7.95, above the analyst consensus of $7.50, but lowered its revenue outlook to $5.7 billion–$5.73 billion, below the $5.88 billion estimate.
Deckers expects HOKA to deliver high-single-digit revenue growth and UGG to post low-single-digit growth in fiscal 2027.
The company projects a gross margin of 58.5%, including approximately $88 million in net tariff refunds, or about 57% excluding the refunds. Operating margin is expected to reach approximately 23%, or slightly above 21.5% excluding refunds.
Diluted EPS is forecast at $7.80–$7.95. The outlook assumes $1 billion in share repurchases, selling, general and administrative expenses of approximately 35.5% of revenue, and a tax rate of 23%.
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Analysts Cuts Price Targets
Piper Sandler analyst Anna Andreeva downgraded Deckers from Neutral to Underweight and lowered her price target from $100 to $75, following the company’s first quarterly sales miss in at least five years.
The company lowered its full-year sales guidance for both HOKA and UGG, while challenging athletic footwear market conditions are expected to persist until next summer or fall. Several HOKA launches, including Transport, Kawana and Salimar, underperformed expectations, while elevated Clifton 10 inventory remains a concern.
Andreeva also noted that UGG customers are delaying purchases until closer to when they need the products. Management’s forecast for more modest holiday reorders raises questions about the brand’s maturity.
Needham analyst Tom Nikic lowered his price target on Deckers from $125 to $96, citing disappointing second-quarter results, sales shortfalls at both HOKA and UGG, and reduced full-year revenue guidance.
Nikic expects these factors could weigh on shares in the near term. Although Deckers trades at an attractive price-to-earnings ratio of 10–11 times, strong holiday sales will be crucial to easing concerns that both brands have reached peak growth.
Nikic lowered his fiscal 2028 EPS estimate to $8.06 from $8.30, while raising his fiscal 2027 EPS estimate due to the expected benefit from tariff refunds.
DECK Stock Price Activity: Deckers Outdoor shares were down 5.15% at $80.80 at publication on Friday.
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