Deckers Brands' Hoka and Ugg Shine but Forecast Fails to Impress Investors

Deckers Brands, a global leader in footwear, apparel, and accessories, announced a 9.1% increase in net sales for the second quarter of its 2026 financial year, driven primarily by robust double-digit growth from its key brands, Hoka and Ugg. Despite this positive top-line performance, the company’s shares experienced a slip as its full-fiscal year 2026 forecast came in below analysts’ predictions, sparking investor caution.

For the quarter ending September 30, Hoka’s net sales surged by 11.1% year-on-year, reaching a total of $634.1 million, up from $570.9 million in the prior year. Similarly, Ugg reported a significant 10.1% rise in net sales, achieving $759.6 million compared to $689.9 million a year earlier. In contrast, other brands within the Deckers portfolio saw a notable decline, with net sales dropping by 26.5% to $37.2 million from $50.6 million in the second quarter of the 2025 financial year.

Digging deeper into sales channels and geographical performance, Deckers Brands experienced a strong 13.4% increase in wholesale net sales during the quarter. However, direct-to-customer (DTC) net sales faced a slight dip of 0.8%, with comparable DTC net sales falling by 2.9%. Geographically, international markets were a significant growth driver, enjoying a substantial 29.3% increase in net sales, while domestic (US) net sales decreased by 1.7%. The company also reported a slight improvement in its gross margin, which rose to 56.2%.

Stefano Caroti, President and CEO of Deckers Brands, expressed confidence in the company's trajectory. "Hoka and Ugg again delivered double-digit growth in the second quarter, reflecting strong performance and international momentum for these powerful brands," Caroti stated in a press release. He further emphasized the company's strategic advantage, noting, "Our brands' ability to connect with consumers through leading innovative products differentiates Deckers in today's dynamic and competitive marketplace. Combined with our best-in-class operating model and financial profile, I am confident in our ability to achieve our fiscal year 2026 outlook and continue to capture the significant opportunities ahead for Deckers."

Despite the CEO’s positive outlook, Deckers Brands' shares fell in double digits following the earnings announcement. This market reaction was primarily attributed to the company's full-year 2026 net sales forecast of $5.35 billion, which fell short of analyst estimates, previously set around $5.45 billion, as reported by Reuters. Bloomberg Intelligence analyst Abigail Gilmartin pointed to management’s cautious stance on US consumer spending amid potential tariff-driven price hikes as a key factor contributing to this forecasted shortfall.

Looking ahead to the full 2026 financial year, Deckers Brands projects Hoka to achieve "low-teens percentage" year-on-year growth, while Ugg is expected to grow by a "low-to-mid-single-digit percentage." The company anticipates its gross margin to remain strong at approximately 56%, with an operating margin projected to be around 21.5% for the fiscal year.