TLDR
- Telsey Advisory lowered its price target on DECK to $105 from $120 while maintaining a Market Perform rating
- UGG’s direct-to-consumer sales declined, marking the second DTC drop in five and a half years
- HOKA brand shows accelerating growth in direct-to-consumer channels and strong wholesale order books
- Deckers beat Q2 earnings expectations with $1.82 EPS versus $1.58 expected, but full-year sales guidance disappointed
- The company reduced its tariff impact estimate to $150 million and plans to offset $75-95 million through price increases
Deckers Outdoor posted earnings that beat expectations, but analysts aren’t celebrating. The company earned $1.82 per share in its fiscal second quarter, crushing the $1.58 forecast.
Revenue hit $1.43 billion, topping the $1.42 billion estimate. Despite these wins, multiple firms have slashed their price targets on the stock.
Telsey Advisory Group cut its target to $105 from $120 on Friday. The firm kept its Market Perform rating unchanged.
Deckers Outdoor Corporation, DECK
Evercore ISI went lower, dropping its target to just $90. Stifel reduced its target to $117, while Needham pulled back to $113.
The concerns center on slowing growth trends. Both HOKA and UGG brands showed sequential deceleration during the quarter.
UGG actually beat market expectations. HOKA met projections but didn’t exceed them.
The real trouble spot was direct-to-consumer sales. These fell during the quarter, only the second time that’s happened in five and a half years.
Domestic sales contracted for the third straight quarter. The U.S. market continues to present challenges for the footwear maker.
Brand Performance Splits Analyst Opinion
UGG’s direct-to-consumer trends are declining. This has hurt investor confidence in the brand’s future.
HOKA tells a different story. The athletic brand is showing accelerating direct-to-consumer growth.
HOKA’s wholesale order books remain strong. Needham analyst Tom Nikic maintained his Buy rating based largely on HOKA’s performance.
TD Cowen also kept a Buy rating with a $124 price target. These bullish calls stand out against the wave of downgrades.
The company maintains healthy financials overall. Its current ratio sits at 2.94 with minimal debt.
Gross margin remains robust at 57.63%. Revenue growth over the last twelve months reached 15.49%.
Tariff Impact and Guidance
Deckers lowered its total unmitigated tariff impact forecast. The new estimate sits at $150 million, down from $185 million previously.
Management expects to offset $75-95 million of tariff costs. This will come through price increases and cost-sharing with factory partners.
The previous offset target was just $75 million. The company has expanded its mitigation strategy.
Deckers returned to issuing annual guidance. The full-year sales forecast came in below what analysts wanted to see.
The fiscal 2026 earnings per share outlook brackets prior consensus estimates. However, this implies weaker second-half performance.
Telsey noted the company beat second quarter earnings by roughly $0.30. This makes the full-year guidance look conservative for the remaining quarters.
BTIG maintained a Neutral rating on the stock. The firm pointed to mixed brand performances as the reason for caution.
Stifel cited concerns about HOKA’s growth trajectory specifically. Despite this, the firm kept its Hold rating in place.
The company trades at a PEG ratio of 0.62. This suggests the stock might be attractively valued relative to growth.
Deckers posted better-than-expected gross margin performance in Q2. This strength helped offset some of the top-line concerns.
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