We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
DECK vs. UAA: Which Footwear Brand is the Smarter Investment Now?
Read MoreHide Full Article
Key Takeaways
DECK grows HOKA and UGG globally but faces margin pressure from tariffs, freight and higher costs.
UAA strengthens margins with premium pricing, supply-chain savings and strong EMEA market growth.
DECK navigates softer U.S. DTC sales, while UAA's loyalty program boosts DTC with above 28M active members.
Deckers Outdoor Corporation (DECK - Free Report) and Under Armour, Inc. (UAA - Free Report) are prominent players in the footwear and athletic apparel industry. While Deckers continues to gain significant traction with growth of its powerhouse brands, HOKA and UGG, Under Armour is focused on transforming itself into a leaner, more premium athletic brand.
As market dynamics shift and macroeconomic pressures persist, the real question is: Which stock holds the better upside potential for investors in the months ahead?
The Case for DECK
Deckers is positioned for sustained growth by focusing on high-margin markets and strengthening its key brands, UGG and HOKA. Both brands delivered solid performance in fiscal 2025, driving a 16.3% year-over-year increase in net sales to $4.98 billion. The company expects continued momentum in fiscal 2026, with projected first-quarter revenues between $890 million and $910 million. HOKA is anticipated to grow in the low-double digits, while UGG expects mid-single-digit growth, reflecting strong consumer demand.
Product innovation continues to be a major driver, with HOKA’s updated models like the Bondi 9 and Clifton 10 seeing strong demand. Meanwhile, UGG expands its offerings with hybrid products such as the Tasman slipper-shoe and Lowmel sneaker.
Deckers effectively balances performance and lifestyle assortments, enhancing brand loyalty and supporting premium pricing. This focus on fresh, technically advanced products ensures that the brands remain relevant and desirable in an evolving consumer landscape.
DECK is also expanding its omni-channel footprint, balancing growth between wholesale and direct-to-consumer (DTC) channels. The DTC segment showed robust performance, with notable growth for HOKA and UGG. Meanwhile, wholesale remains a vital growth engine, especially internationally, wherein partnerships with retailers like Intersport and JD Group are expanding Deckers’ presence. International markets continue to outperform, with significant gains in Europe and Asia, supporting DECK’s goal of achieving a 50-50 revenue split between domestic and international sales.
Despite achieving record results in fiscal 2025, Deckers faces growing investor concerns due to several near-term challenges. A significant headwind is the impact of the newly imposed tariffs, which can add costs of up to $150 million in fiscal 2026. While Deckers plans to offset some of this through pricing adjustments and supplier negotiations, a portion will directly hit the gross margin, which is expected to decline from the record 57.9% achieved in fiscal 2025.
We expect the fiscal 2026 gross margin to contract by 210 basis points. Adding to the pressure is softer performance at HOKA’s U.S. DTC segment, attributed to model transitions, heightened promotions and broader consumer caution amid economic uncertainty, even as international DTC sales remain resilient.
Given these uncertainties, including volatile trade policies and weakening domestic demand, Deckers has refrained from offering formal guidance for fiscal 2026. Even the limited guidance provided for the fiscal first quarter suggests a cautious outlook, with the gross margin expected to shrink by 250 basis points due to higher freight costs, increased promotions and a heavier wholesale mix.
Simultaneously, SG&A costs are projected to grow faster than revenues, driven by ongoing investments in marketing and infrastructure. Consequently, earnings per share are expected to decline to 62-67 cents from the 75 cents registered in the prior-year period.
The Case for UAA
Under Armour is strengthening its direct-to-consumer (DTC) channel by shifting away from discount-driven promotions and focusing more on premium, full-price selling. This approach has resulted in a substantial increase in full-price sales and double-digit growth in average unit retail in the fourth quarter of fiscal 2025.
A key enabler of this progress is the brand’s global loyalty program, which includes 28 million members. Notably, loyalty members contribute more than half of U.S. DTC revenues, driving higher repurchase rates and stronger customer retention.
The EMEA region continues to be a bright spot for Under Armour, highlighting the success of its category-led operating model. In fiscal 2025, EMEA emerged as the top-performing market, fueled by robust growth in football and sportswear categories. Building on this momentum, the company plans to expand into key markets like France, Spain and Germany in fiscal 2026. The fiscal first-quarter projections indicate high-single-digit revenue growth in EMEA, aided by favorable foreign exchange rates and positive seasonal impacts like Easter timing.
Efforts to strengthen the gross margin are also yielding positive outcomes. Under Armour recorded a 170-basis-point increase in the gross margin in fourth-quarter fiscal 2025, driven by supply-chain improvements, reduced freight and product costs, and lower discounting. Pricing benefits and favorable foreign exchange also contributed to this margin expansion.
The company expects margin gains of 40-60 basis points for fiscal 2026, supported by a stronger product mix, efficient inventory management and continued cost savings.
Ongoing cost optimization and restructuring are significantly enhancing operational efficiency. In fiscal 2025, Under Armour incurred $89 million in transformation-related charges and achieved $35 million in realized savings.
The company is targeting $75 million in annualized savings by the end of fiscal 2026 through actions such as reducing consulting costs, cutting third-party costs and closing underperforming facilities like the Rialto distribution center. SG&A costs are projected to decline sharply, offering support to long-term margin improvement.
Despite these strategic gains, Under Armour faces some headwinds. The company expects first-quarter fiscal 2026 revenues to decline 4-5% due to softness in its spring/summer 2025 wholesale order book and ongoing challenges in North America, its largest market.
Additionally, macroeconomic pressures and increased uncertainty from recent tariff developments are dampening visibility. While near-term conditions are challenging, management remains focused on long-term brand elevation, product innovation and operational discipline to drive sustainable recovery.
DECK vs. UAA: How Do Estimates Stack Up?
The Zacks Consensus Estimate for Deckers' fiscal 2026 sales and earnings per share (EPS) implies year-over-year growth of 7.6% and a decline of 4.4%, respectively. The consensus estimate for EPS for the current fiscal year has decreased 0.8% in the past 30 days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for UAA’s fiscal 2026 sales and EPS suggests a year-over-year decline of 2.1% and growth of 9.7%, respectively. The consensus estimate for EPS for the current fiscal year has moved down 10.5% in the past 60 days.
Image Source: Zacks Investment Research
DECK vs. UAA: A Look at Stock Performances
Deckers’ shares have dropped 13.6% over the past three months. Meanwhile, Under Armour’s stock has gained 5.5%. While DECK’s decline reflects margin pressures from tariffs, rising costs and cautious guidance, UAA’s gain is driven by improving margins, premiumization efforts and strong EMEA growth.
Image Source: Zacks Investment Research
DECK vs. UAA: A Dive Into Stock Valuation
Deckers is trading at a forward P/S multiple of 2.77, below its median of 3.47 in the last three years. Under Armour’s forward 12-month price-to-sales (P/S) multiple sits at 0.57, below its median of 0.60 in the last three years.
The UAA stock looks cheap from a valuation perspective, offering attractive entry points for value-conscious investors. Moreover, with cost optimization and restructuring initiatives, the company is well-positioned for continued growth. We note that Deckers appears to be pricier than UAA in terms of their current P/S ratios.
Image Source: Zacks Investment Research
DECK vs. UAA: Which is the Smarter Bet?
While both companies are navigating complex landscapes, Under Armour stands out as a better investment case today. Its strategic shift toward premiumization, disciplined cost control and international momentum — especially in EMEA — positions UAA well for a sustainable turnaround. Despite near-term revenue pressures, Under Armour is laying the groundwork for long-term brand elevation and margin expansion.
In contrast, while Deckers boasts well-established brands, it faces mounting cost pressures and softening domestic demand. With a leaner structure, attractive valuation and a focused execution plan, Under Armour offers a more favorable risk-reward profile.
DECK currently carries a Zacks Rank #4 (Sell), whereas UAA has a Zacks Rank #3 (Hold).
Image: Bigstock
DECK vs. UAA: Which Footwear Brand is the Smarter Investment Now?
Key Takeaways
Deckers Outdoor Corporation (DECK - Free Report) and Under Armour, Inc. (UAA - Free Report) are prominent players in the footwear and athletic apparel industry. While Deckers continues to gain significant traction with growth of its powerhouse brands, HOKA and UGG, Under Armour is focused on transforming itself into a leaner, more premium athletic brand.
As market dynamics shift and macroeconomic pressures persist, the real question is: Which stock holds the better upside potential for investors in the months ahead?
The Case for DECK
Deckers is positioned for sustained growth by focusing on high-margin markets and strengthening its key brands, UGG and HOKA. Both brands delivered solid performance in fiscal 2025, driving a 16.3% year-over-year increase in net sales to $4.98 billion. The company expects continued momentum in fiscal 2026, with projected first-quarter revenues between $890 million and $910 million. HOKA is anticipated to grow in the low-double digits, while UGG expects mid-single-digit growth, reflecting strong consumer demand.
Product innovation continues to be a major driver, with HOKA’s updated models like the Bondi 9 and Clifton 10 seeing strong demand. Meanwhile, UGG expands its offerings with hybrid products such as the Tasman slipper-shoe and Lowmel sneaker.
Deckers effectively balances performance and lifestyle assortments, enhancing brand loyalty and supporting premium pricing. This focus on fresh, technically advanced products ensures that the brands remain relevant and desirable in an evolving consumer landscape.
DECK is also expanding its omni-channel footprint, balancing growth between wholesale and direct-to-consumer (DTC) channels. The DTC segment showed robust performance, with notable growth for HOKA and UGG. Meanwhile, wholesale remains a vital growth engine, especially internationally, wherein partnerships with retailers like Intersport and JD Group are expanding Deckers’ presence. International markets continue to outperform, with significant gains in Europe and Asia, supporting DECK’s goal of achieving a 50-50 revenue split between domestic and international sales.
Despite achieving record results in fiscal 2025, Deckers faces growing investor concerns due to several near-term challenges. A significant headwind is the impact of the newly imposed tariffs, which can add costs of up to $150 million in fiscal 2026. While Deckers plans to offset some of this through pricing adjustments and supplier negotiations, a portion will directly hit the gross margin, which is expected to decline from the record 57.9% achieved in fiscal 2025.
We expect the fiscal 2026 gross margin to contract by 210 basis points. Adding to the pressure is softer performance at HOKA’s U.S. DTC segment, attributed to model transitions, heightened promotions and broader consumer caution amid economic uncertainty, even as international DTC sales remain resilient.
Given these uncertainties, including volatile trade policies and weakening domestic demand, Deckers has refrained from offering formal guidance for fiscal 2026. Even the limited guidance provided for the fiscal first quarter suggests a cautious outlook, with the gross margin expected to shrink by 250 basis points due to higher freight costs, increased promotions and a heavier wholesale mix.
Simultaneously, SG&A costs are projected to grow faster than revenues, driven by ongoing investments in marketing and infrastructure. Consequently, earnings per share are expected to decline to 62-67 cents from the 75 cents registered in the prior-year period.
The Case for UAA
Under Armour is strengthening its direct-to-consumer (DTC) channel by shifting away from discount-driven promotions and focusing more on premium, full-price selling. This approach has resulted in a substantial increase in full-price sales and double-digit growth in average unit retail in the fourth quarter of fiscal 2025.
A key enabler of this progress is the brand’s global loyalty program, which includes 28 million members. Notably, loyalty members contribute more than half of U.S. DTC revenues, driving higher repurchase rates and stronger customer retention.
The EMEA region continues to be a bright spot for Under Armour, highlighting the success of its category-led operating model. In fiscal 2025, EMEA emerged as the top-performing market, fueled by robust growth in football and sportswear categories. Building on this momentum, the company plans to expand into key markets like France, Spain and Germany in fiscal 2026. The fiscal first-quarter projections indicate high-single-digit revenue growth in EMEA, aided by favorable foreign exchange rates and positive seasonal impacts like Easter timing.
Efforts to strengthen the gross margin are also yielding positive outcomes. Under Armour recorded a 170-basis-point increase in the gross margin in fourth-quarter fiscal 2025, driven by supply-chain improvements, reduced freight and product costs, and lower discounting. Pricing benefits and favorable foreign exchange also contributed to this margin expansion.
The company expects margin gains of 40-60 basis points for fiscal 2026, supported by a stronger product mix, efficient inventory management and continued cost savings.
Ongoing cost optimization and restructuring are significantly enhancing operational efficiency. In fiscal 2025, Under Armour incurred $89 million in transformation-related charges and achieved $35 million in realized savings.
The company is targeting $75 million in annualized savings by the end of fiscal 2026 through actions such as reducing consulting costs, cutting third-party costs and closing underperforming facilities like the Rialto distribution center. SG&A costs are projected to decline sharply, offering support to long-term margin improvement.
Despite these strategic gains, Under Armour faces some headwinds. The company expects first-quarter fiscal 2026 revenues to decline 4-5% due to softness in its spring/summer 2025 wholesale order book and ongoing challenges in North America, its largest market.
Additionally, macroeconomic pressures and increased uncertainty from recent tariff developments are dampening visibility. While near-term conditions are challenging, management remains focused on long-term brand elevation, product innovation and operational discipline to drive sustainable recovery.
DECK vs. UAA: How Do Estimates Stack Up?
The Zacks Consensus Estimate for Deckers' fiscal 2026 sales and earnings per share (EPS) implies year-over-year growth of 7.6% and a decline of 4.4%, respectively. The consensus estimate for EPS for the current fiscal year has decreased 0.8% in the past 30 days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for UAA’s fiscal 2026 sales and EPS suggests a year-over-year decline of 2.1% and growth of 9.7%, respectively. The consensus estimate for EPS for the current fiscal year has moved down 10.5% in the past 60 days.
Image Source: Zacks Investment Research
DECK vs. UAA: A Look at Stock Performances
Deckers’ shares have dropped 13.6% over the past three months. Meanwhile, Under Armour’s stock has gained 5.5%. While DECK’s decline reflects margin pressures from tariffs, rising costs and cautious guidance, UAA’s gain is driven by improving margins, premiumization efforts and strong EMEA growth.
Image Source: Zacks Investment Research
DECK vs. UAA: A Dive Into Stock Valuation
Deckers is trading at a forward P/S multiple of 2.77, below its median of 3.47 in the last three years. Under Armour’s forward 12-month price-to-sales (P/S) multiple sits at 0.57, below its median of 0.60 in the last three years.
The UAA stock looks cheap from a valuation perspective, offering attractive entry points for value-conscious investors. Moreover, with cost optimization and restructuring initiatives, the company is well-positioned for continued growth. We note that Deckers appears to be pricier than UAA in terms of their current P/S ratios.
Image Source: Zacks Investment Research
DECK vs. UAA: Which is the Smarter Bet?
While both companies are navigating complex landscapes, Under Armour stands out as a better investment case today. Its strategic shift toward premiumization, disciplined cost control and international momentum — especially in EMEA — positions UAA well for a sustainable turnaround. Despite near-term revenue pressures, Under Armour is laying the groundwork for long-term brand elevation and margin expansion.
In contrast, while Deckers boasts well-established brands, it faces mounting cost pressures and softening domestic demand. With a leaner structure, attractive valuation and a focused execution plan, Under Armour offers a more favorable risk-reward profile.
DECK currently carries a Zacks Rank #4 (Sell), whereas UAA has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.