Deckers Brands Shares Plunge 15% Amid Downgraded Sales Forecasts
On the 24th of October, shares of American footwear manufacturer Deckers Brands plummeted by 15%, following the companys announcement to lower sales forecasts for its key growth brands, HOKA and UGG. This downturn raised concerns over the impact of tariff burdens and a slowdown in consumer spending on the companys growth prospects.
In its second fiscal quarter (July-September), Deckers reported earnings per share (EPS) of $1.82, which exceeded market expectations. However, the annual revenue guidance fell short of Wall Street forecasts. While sales of the flagship HOKA running shoes showed signs of slowing down, UGG boots performed better than anticipated. Despite this, the company indicated in its outlook for fiscal 2027 (ending March 2026) that it expects a deceleration in revenue growth due to tariff pressures and cautious consumer sentiment.
Deckers projected that HOKA sales would see only "low double-digit growth" next year, a significant decline from the 24% growth rate of the previous year. Similarly, UGGs growth forecast was revised down from 13% to a low single-digit to mid-single-digit range.
Initially, back in May, the company had anticipated HOKA to grow in the "mid-teens" and UGG in the "mid-single digits," but noted that these projections were made prior to the Trump administrations new tariffs. At that time, the company had calculated the impact of costs but indicated that the effects of reduced demand were uncertain.
Chief Financial Officer Steven Passing stated during the earnings call, "The impact of tariffs and price increases on consumer demand is becoming clearer now." He further remarked that the revised guidance represented only a "slight decrease from previous estimates," but this was not sufficient to alleviate investor concerns.
The company acknowledged that the slowdown in revenue growth for both brands and the downward revision of guidance have come after years of sustained high growth. As investors digest this news, the uncertainty surrounding future consumer behavior and external economic factors continues to loom over Deckers Brands.
In its second fiscal quarter (July-September), Deckers reported earnings per share (EPS) of $1.82, which exceeded market expectations. However, the annual revenue guidance fell short of Wall Street forecasts. While sales of the flagship HOKA running shoes showed signs of slowing down, UGG boots performed better than anticipated. Despite this, the company indicated in its outlook for fiscal 2027 (ending March 2026) that it expects a deceleration in revenue growth due to tariff pressures and cautious consumer sentiment.
Deckers projected that HOKA sales would see only "low double-digit growth" next year, a significant decline from the 24% growth rate of the previous year. Similarly, UGGs growth forecast was revised down from 13% to a low single-digit to mid-single-digit range.
Initially, back in May, the company had anticipated HOKA to grow in the "mid-teens" and UGG in the "mid-single digits," but noted that these projections were made prior to the Trump administrations new tariffs. At that time, the company had calculated the impact of costs but indicated that the effects of reduced demand were uncertain.
Chief Financial Officer Steven Passing stated during the earnings call, "The impact of tariffs and price increases on consumer demand is becoming clearer now." He further remarked that the revised guidance represented only a "slight decrease from previous estimates," but this was not sufficient to alleviate investor concerns.
The company acknowledged that the slowdown in revenue growth for both brands and the downward revision of guidance have come after years of sustained high growth. As investors digest this news, the uncertainty surrounding future consumer behavior and external economic factors continues to loom over Deckers Brands.
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