The Hoka and Ugg owner missed sales estimates and cut its full-year revenue outlook by about 3%. Its higher earnings forecast includes about 52 cents a share of tariff refunds; without them, the range sits slightly below July's. Shares were indicated 8% lower.
Deckers Outdoor reported higher profit and a higher earnings forecast on Thursday. Investors focused on the part of the report that was not helped by a one-time benefit.
Net sales rose 3.5% to a record $1.48 billion in the fiscal second quarter, short of the $1.51 billion analysts expected, according to Benzinga. Hoka sales grew 6.8% to $677.2 million and Ugg sales rose 3.5% to $786.4 million.
Diluted earnings were $2.31 a share, up 27%. That included a 28-cent benefit from net refunds of tariffs imposed under the International Emergency Economic Powers Act that Deckers received in the quarter. Excluding the refund, earnings were $2.03 a share, still above the $1.79 analysts expected.
Two guides moving in opposite directions
Deckers cut its full-year revenue forecast to $5.70 billion to $5.725 billion, from $5.86 billion to $5.91 billion. The new midpoint is about $173 million, or about 3%, lower.
At the same time, it raised its full-year earnings forecast to $7.80 to $7.95 a share. That includes about 52 cents of benefit from tariff refunds. Without the refunds, the range would be about $7.28 to $7.43, slightly below the $7.35 to $7.50 Deckers guided to in July. The refunds account for all of the increase.
The arithmetic tells the story. Sales expectations are falling, and the underlying earnings outlook has edged lower; the headline raise rests on refunds that will not recur. Executives said consumers have become more cautious and are seeking discounts, and that the company is resisting discounting to protect its brands.
The reaction
Shares closed at $85.28 on Thursday, little changed, before the report. They were indicated at about $78.25 early Friday, down 8.2%.
Discipline or maturity
The constructive view is that Deckers is choosing margin over volume: refusing to chase sales with markdowns keeps Hoka and Ugg priced as premium brands, and earnings excluding refunds still beat forecasts.
The cautious view is that slower growth at Hoka, the company's main growth engine, combined with a revenue cut, signals that the brand is maturing, and that the earnings raise flatters the picture.
What to watch
Hoka's growth rate in the holiday quarter, the discounting environment across footwear, and how much of next year's earnings depends on any further tariff refunds.