Deckers misses Q2 sales forecasts and cuts full-year sales guidance

Deckers Brands missed second-quarter sales forecasts on Thursday, sending its shares down more than 8 percent in after-market trading. The Goleta, California parent of Hoka and Ugg reported net sales of $1.48 billion for the three months ended 30 September, a 3.5 percent rise on the $1.43 billion of a year earlier.

Analysts had projected net sales of between $1.50 billion and $1.52 billion, so the result fell short at the top line. Net income still climbed 16.8 percent to $313.1 million from $268.2 million a year earlier, with diluted earnings per share of $2.31 against $1.82.

On earnings the company cleared the Street's expectations, which had called for diluted EPS between $1.76 and $1.83, according to Yahoo Finance. The beat owed much to tariff refunds: Deckers secured International Emergency Economic Powers Act net refunds of $46.0 million plus $3.0 million in associated interest.

Those refunds were booked as a reduction of cost of sales and an increase to total other income. The net benefit to gross margin and operating margin was approximately 310 basis points, and after tax the benefit to diluted EPS came to about 28 cents for the quarter.

How each brand performed

Hoka led with net sales of $677.2 million, up 6.8 percent from $634.1 million. Ugg grew 3.5 percent to $786.4 million from $759.6 million, so it remains the larger of the two brands by revenue in the quarter.

The Other brands division, which includes Teva, fell 54.3 percent to $17.0 million from $37.2 million. Deckers said the declines in Other brands, the wholesale channel and the domestic geography include the phase-out of Koolaburra standalone operations.

Wholesale net sales rose 5.5 percent to $1.09 billion from $1.04 billion. The direct-to-consumer channel moved the other way, slipping 1.8 percent to $387.5 million from $394.6 million. Comparable DTC net sales were down 6.4 percent in the quarter.

Domestic net sales dipped 0.4 percent to $835.8 million from $839.5 million in the second quarter of fiscal 2026. International net sales rose 9.0 percent to $644.7 million from $591.3 million, which is where the growth came from.

Stefano Caroti, president and chief executive, said the company beat its own earnings expectations through disciplined marketplace management and expense control in a challenging consumer environment. Revenue is the line where Deckers fell short.

The guidance cut

Deckers now expects net sales for fiscal 2027 of between $5.70 billion and $5.73 billion. The previous guidance called for $5.86 billion to $5.91 billion, so both ends of the range have come down.

Yet the company raised its earnings forecast. Diluted EPS for the year is now expected between $7.80 and $7.95, against a prior outlook of $7.35 to $7.50. Deckers did not say how much of that increase comes from the tariff refunds.

"As we move through the back half of fiscal 2027, we are taking deliberate actions to strengthen our connection with consumers, sharpen execution, and concentrate resources behind our greatest opportunities," Caroti said.

He added: "We remain confident in the significant global opportunities ahead for both Hoka and Ugg, and our ability to drive sustainable growth and create long-term shareholder value." The company gave no further detail on those actions.

A new board member

Separately, Deckers appointed Rati Sahi Levesque to its board of directors, effective 1 December. Levesque is president, chief executive officer and a director of The RealReal. She will serve on the audit and risk management committee of the Deckers board.

In connection with her appointment, Lauri Shanahan will retire from the Deckers board after more than a decade. Her departure takes effect as Levesque joins, so the board keeps its seat count through the handover.

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