Deckers revenue climbs 9% to $1.43bn on Hoka strength

Deckers Brands reported a 9 percent year-over-year revenue increase to $1.43 billion for the second fiscal quarter, ended Sept. 30, driven by strong performances from its Hoka and Ugg brands. Hoka sales rose 11.1 percent to $634.1 million, underscoring continued consumer momentum in performance running and recovery footwear across both wholesale and international channels. Teva, included under “other brands,” contributed to the group’s outdoor portfolio despite an overall decline in category sales of 26.5 percent to $37.2 million, reflecting the phase-out of Koolaburra operations and softer seasonal demand.

“Hoka and Ugg again delivered double-digit growth in the second quarter, reflecting strong performance and international momentum for these powerful brands,” said Stefano Caroti, President and CEO.

International strength offsets weaker US sales

Deckers’ international revenue climbed 29.3 percent to $591.3 million, offsetting a 1.7 percent decline in US sales to $839.5 million, as the company noted that consumer sentiment remains under pressure in the US. Wholesale revenue grew 13.4 percent to $1.04 billion, while direct-to-consumer (DTC) sales slipped 0.8 percent to $394.6 million, reflecting an 8 percent increase for Hoka and a 10 percent decline for Ugg.

The company said Hoka’s strength abroad, particularly in Europe and Asia, continues to reinforce its long-term growth potential in performance running footwear. Teva, meanwhile, is expected to benefit from the group’s focus on lifestyle crossover categories and sustainability-driven innovation.

Margins widened despite tariff pressures

The gross margin widened by 30 basis points to 56.2 percent, benefiting from price increases, a favorable product mix, currency tailwinds and cost sharing with factories. These gains were partially offset by incremental tariffs on US goods and channel mix headwinds as the weight of its lower-margin wholesale business grew.

Deckers had forecast in July that the gross margin would narrow considerably in the quarter. Net profit rose to $268.2 million from $242.3 million, while diluted earnings per share increased by 14 percent to $1.82, well above guidance of $1.50 to $1.55.

Tariff impact expected in second half

Chief Financial Officer Steve Fasching said in a call with analysts that price increases implemented at the beginning of July, combined with actions to bring more inventory in ahead of tariff rate hikes, delayed the impact of the new import duties.

“However, this is unique to the second quarter and our expectation of net tariff headwinds in the back half of the fiscal year remains largely unchanged,” Fasching said. “For the back half, we are anticipating a more cautious consumer as the full impact of tariffs and price increases will be felt here in the US.”

Full-year outlook reinstated

Deckers reinstated full-year guidance and now expects to post sales of about $5.35 billion for the fiscal year ending March 31, 2026 – up around 7.2 percent from $4.99 billion last year, but below analyst expectations of about $5.5 billion. Hoka sales are forecast to rise by a percentage in the low teens, while Ugg is expected to grow in a low- to mid-single-digit range.

Growth will continue to be driven by international markets and the wholesale channel. The company also expects a gross margin of about 56 percent and an operating margin of roughly 21.5 percent. Diluted earnings per share are forecast at $6.30 to $6.39. Deckers said it remains confident it will achieve its fiscal 2026 targets despite macroeconomic and currency headwinds, citing continued brand strength and innovation-led growth across its portfolio.