Were concerns over a slowdown in sales at Deckers Outdoor Corp., the parent of the Ugg and Hoka brands, overblown?
If anything, third quarter results posted Thursday after the markets closed indicate there is significant global demand for both brands, giving Deckers continued runway for growth, according company CEO Stefano Caroti.
Shares of Deckers closed Thursday at $99.87, but soared 10 percent in after-market trading following the report of earnings. The shares are now up 16.7 percent from Thursday’s close to $114.49 in mid-day trading.
In a conference call to investors after reporting earnings, president and Caroti said: “Global Hoka and Ugg performance was exceptional, with revenue increasing by 18 percent and 5 percent versus last year, respectively.”
He said each brand delivered balanced growth across DTC (direct-to-consumer) and wholesale, and noted that from a regional perspective, Hoka and Ugg collectively drove third quarter revenue increases of 15 percent in international markets. That reflected not only “continued momentum from the first half and 5 percent in the United States,” but also showed “positive inflection relative to the first half” based on the firm’s marketing initiatives.
“This result exceeded our expectations for both brands. Importantly, it was achieved while maintaining high levels of full price selling and demonstrated resilient price elasticity,” Caroti said.
The primary concern from Wall Street following Deckers’ second quarter earnings results was over the Ugg brand, due to sizable deterioration of DTC trends.
But following the holiday selling season, some data points emerged suggesting that perhaps Ugg sales could be better than first expected.
Dana Telsey, Telsey Advisory Group’s chief investment officer, earlier this week noted that men’s footwear for the Ugg brand is “growing at twice the pace of the overall brand,” citing to franchises across sneakers, Chukka and Chelsea styles. Also earlier this week, Williams Trading analyst Sam Poser said he expected Ugg orders for 2026 to increase led by traditional retailers in North America and international retailers, with a partial offset due to weakness from the athletic specialty and fashion athletic channels.
Caroti in the conference call said Ugg has been growing its position as a premium lifestyle brand through a “consistent brand identity” that includes global marketing aligned with its target consumer base. He said the brand also strategically allocated additional products to the wholesale channel prior to peak season, enabling in-stock positions for its retail accounts. Late season demand was addressed through DTC retail and online channels, enabling DTC revenue up 5 percent and a wholesale revenue gain of 4 percent, both compared to year-ago levels.
The CEO said DTC was used to test products with speed to market, pulling forward targeted new silhouettes to generate early reads.
“Our new Quill franchise was a standout success through this initiative,” Caroti said. “By sharing performance insights with our wholesale partners for products like Quill, we are able to accelerate the global expansion and adoption of new offerings.”
At Hoka, Caroti said global revenue increases was driven by broader consumer adoption of the brand’s products. He said the company has refined its approach to how it manages the global distribution, which helped it achieve balanced growth across DTC and wholesale. “As we continue to build this brand and introduce new products to the market, we are proactively maintaining healthy pull model of demand across all channels,” he said.
The CEO also spoke about Hoka’s revamped membership program, which includes exclusive and early product access, select opportunities for special discounts and rewards for higher purchase frequency. Hoka is also working on additional benefits to drive consumer engagement.
Caroti said the biggest opportunity for Hoka’s expansion in the U.S. is within the athletic specialty segment, where “we are currently represented in only about one-quarter of the stores we believe will be relevant for the brand moving forward.” He said the brand is “much earlier” in the process of expanding Hoka’s distribution on the international front, adding that there’s still room for door and market share expansion in the European run specialty segment. The CEO also cited China as having “significant opportunity” for distribution expansion.
Given prior concerns with Ugg, DTC and other matters, Wall Street analysts essentially maintained their current ratings on shares of Deckers’ stock, either at a “Buy” or the equivalent of a “Hold.”
“We had been guarded into the quarter on concerns around slowing underlying demand and the impact to wholesale order books. We were pleased to see a more balanced channel growth complexion and now have greater confidence in estimates being set at an appropriate level,” said BTIG analyst Janine Stichter.
While DTC improvement was encouraging, she noted that a portion of that was driven by incremental promotions. And for Hoka, sustaining double-digit percent growth over the medium term will depend on expansion into lifestyle. “While there is now concerted strategy around this, it remains early days, in our view. We remain comfortable with our ‘Neutral’ rating,” Stichter concluded.
Guggenheim’s Simeon Siegel also has a “Neutral” rating on shares of Deckers. He noted that tariffs are expected to be less significant than previously guided, with the Fiscal Year 2026 unmitigated tariff impact in the range of $110 million instead of $150 million, along with mitigation efforts to offset $85 million of that pressure. Mitigation efforts include strategic and staggered price increases, as well as partial cost-sharing with factory partners, the analyst noted.
He also said diluted earnings per share (EPS) for the year were raised to the range of $6.80 to $6.85 from prior guidance of $6.30 to $6.39, including the impact from fourth quarter share repurchases that will contribute to EPS growth. That implies fourth quarter EPS at between 76 cents to 81 cents, below Wall Street’s consensus of 91 cents.
Telsey said the company delivered a healthy third quarter beat, which she described as “encouraging.” But the chief investment officer had concerns, noting: “We expect investors to look for sustained momentum across channels and brands against an uncertain macro backdrop, and we maintain our ‘Market Perform’ rating.”
