Deckers Brands shares fell about 9 percent after the group lowered its full-year sales forecast for Hoka and Ugg, as shoppers become more careful and look for discounts. Tariff refunds lifted second-quarter profit, but revenue fell short of what analysts expected.
Hoka’s growth slowed again in the second quarter FY27, to 6.8 percent, and Deckers Brands now expects less from its running brand this year. The group sees Hoka growing at a high-single-digit rate in fiscal 2027. That is down from the low double digits itforecast in July. Hoka grew 24 percent two years ago and 16 percent last year. Hoka made up 46 percent of group sales in the quarter. Its slowdown comes as Nike and On move further into cushioned running, the category Hoka built its business on, as Evercore ISI warned in July.
Hoka adds $43 million, but its growth rate keeps falling
Group net sales rose 3.5 percent to a quarterly record of $1.48 billion (€1.32bn), or 2.8 percent at constant currency. Hoka sales rose to $677.2 million (€603m) from $634.1 million, while Ugg grew 3.5 percent to $786.4 million (€700m). Sales at the other brands more than halved to $17.0 million as Deckers closes the standalone Koolaburra business.
| Deckers Brands, Income | |||
| Q2 FY2027, ended Sept. 30 ($ millions) | |||
| 2026 | 2025 | Change | |
| Net sales | 1,481 | 1,431 | 3.5% |
| Hoka | 677 | 634 | 6.8% |
| Ugg | 786 | 760 | 3.5% |
| Other brands | 17 | 37 | -54.3% |
| Wholesale | 1,093 | 1,036 | 5.5% |
| Direct-to-consumer | 388 | 395 | -1.8% |
| Gross profit | 895 | 804 | 11.4% |
| Gross margin | 60.5% | 56.2% | 4.3 pts |
| SG&A expenses | 506 | 477 | 5.9% |
| Operating income | 389 | 327 | 19.3% |
| Operating margin | 26.3% | 22.8% | 3.5 pts |
| Net income | 313 | 268 | 16.8% |
| Diluted EPS ($) | 2.31 | 1.82 | 26.9% |
Source: Deckers Outdoor Corp. Q2 FY2027 earnings release (Form 8-K, Exhibit 99.1), Oct. 22, 2026. All figures in $ millions except margins and EPS. Q2 FY2027 includes $46.0 million in IEEPA tariff refunds booked in cost of sales (about 310 basis points on gross and operating margin).
Retailers still account for most of Hoka’s growth. On the earnings call, Deckers said Hoka’s wholesale sales rose 9 percent to $444 million, while its own stores and websites added 4 percent, to $234 million. Most of it sold at full price.
Shoppers want discounts, and Deckers won’t offer them
Across the group, direct-to-consumer (DTC) sales fell 1.8 percent to $387.5 million, and 6.4 percent on a comparable basis. Wholesale rose 5.5 percent to $1.09 billion. Hoka’s DTC business grew, so the weakness sat elsewhere in the portfolio: by SGIE’s estimate, DTC sales at the other brands fell by close to 10 percent.
President and CEO Stefano Caroti called the consumer environment “challenging.” Executives said shoppers have become more careful with their money and are looking for deals, but Deckers won’t respond with markdowns. For the next two quarters, Caroti said, the outlook takes “a more measured approach to growth.”
Growth came from outside the US: international sales rose 9.0 percent to $644.7 million and now make up 44 percent of the total, up from 41 percent a year ago. At home, sales slipped 0.4 percent.
Tariff refunds lift the profit line
Gross margin jumped to 60.5 percent from 56.2 percent, but much of the gain is a one-off. During the quarter, Deckers received $46.0 million (€41m) in refunds of tariffs collected under the International Emergency Economic Powers Act (IEEPA), plus $3.0 million in interest. It booked the refunds against cost of sales. Operating income rose 19.3 percent to $389.5 million (€347m), but only about 5 percent without the refund.
Investors focus on a lower sales outlook
The market reacted to the top line. Shares fell about 9.6 percent in after-hours trading on Thursday and were close to their 52-week low of $77.20 before Friday’s open. Analysts had expected revenue of about $1.51 billion, and Piper Sandler said this was Deckers’ first fiscal second-quarter sales miss in at least five years.
The full-year forecast added to the concern. Deckers lowered its sales outlook to $5.700–$5.725 billion (€5.07–5.10bn), roughly 4 to 5 percent above the $5.47 billion it reported for fiscal 2026. Alongside the cut for Hoka, it now expects Ugg to grow by a low single digit, down from a mid single digit. For the year, Deckers expects a gross margin of about 58.5 percent and an operating margin of about 23 percent.
Several brokers lowered their targets on Friday. Piper Sandler downgraded the stock to Underweight and cut its target to $75 from $100, while Needham, Telsey and Stifel lowered theirs to $96, $90 and $113. Analysts were already cautious before the results: Evercore ISI, Jefferies and Raymond James had all cut their targets in recent weeks.
The Hoka comments drew the most attention. Piper Sandler analyst Anna Andreeva said some new Hoka products have not sold as well as expected and that Clifton 10 inventory still weighs on the brand. She doesn’t expect athletic market conditions to improve much before next summer or fall. Stifel said Hoka would need to accelerate by roughly 10 percentage points later in the year to meet its full-year target, if third-quarter growth stays in the low-to-mid single digits
