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Deckers Stock Tumbles: Cuts Sales Outlook Despite Profit Beat

Deckers beat profit forecasts, but a one-off tariff refund flattered the result, revenue missed and the full-year sales outlook was cut, sending the shares sharply lower in after-hours trading.

Deckers Brands (NYSE: DECK), the owner of the HOKA running shoe and UGG boot brands, beat second-quarter profit forecasts but cut its full-year sales outlook, and its shares fell 6.2% in after-hours trading. The profit beat leans on a one-off tariff refund.

The stock closed today’s regular session at $85.28, down 0.3%. The results arrived at 9.05pm UK time, after the close, so the after-hours fall is the market’s first reaction to them.

DECK.US

Diluted earnings per share for the quarter to the 30th of September were $2.31, against $1.82 a year earlier and a Yahoo Finance consensus of $1.79. Refunds of IEEPA tariffs added about $0.28, leaving roughly $2.03, still about $0.24 above consensus.

Revenue of $1.481bn was up 3.5% from $1.431bn but about 2% short of the Yahoo Finance consensus of $1.51bn. HOKA sales rose 6.8% to $677.2m and UGG rose 3.5% to $786.4m. Direct-to-consumer comparable sales fell 6.4%, while international sales rose 9.0% and domestic slipped 0.4%.

The guidance looked the likelier driver of the reaction. Deckers now expects full-year sales of $5.700bn to $5.725bn, against a previous range of $5.86bn to $5.91bn and a Yahoo Finance consensus of $5.88bn. It now sees HOKA growing at a high-single-digit rate, down from low-double-digit, and UGG low-single-digit, down from mid-single-digit.

Full-year EPS guidance rose to $7.80 to $7.95 from $7.35 to $7.50, but includes about $0.52 of refund benefit. Without it the range is roughly $7.28 to $7.43, slightly below the old range. Yahoo Finance’s $7.52 consensus largely predates the refunds, so the comparison is not like-for-like.

Gross margin was 60.5%, against 56.2%, with the refunds worth about 310 basis points, or 3.1 percentage points. The outlook assumes no further refunds. Deckers bought back $299m of shares in the quarter and $637.5m in the first half.

Chief executive Stefano Caroti described a challenging consumer environment, while saying earnings came in above the company’s expectations.

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