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DECK beat Q3 earnings and sales estimates, with EPS rising to $3.33 and revenues up 7.1% y/y.
DECK saw strong brand momentum, led by HOKA's 18.5% sales growth across DTC and wholesale channels.
DECK raised the FY26 view, citing improved margins, higher EPS expectations and continued brand strength.
Deckers Outdoor Corporation (DECK - Free Report) reported impressive third-quarter fiscal 2026 results, with the top and bottom lines beating estimates and increasing year over year. Management highlighted strong brand momentum, particularly across HOKA and UGG, which drove the better-than-expected results and prompted the company to raise its fiscal 2026 guidance. Investor sentiment was positive, sending shares up 13.1% in the after-hours trading yesterday following the earnings release.
Deckers Outdoor Corporation Price, Consensus and EPS Surprise
DECK delivered quarterly earnings of $3.33 per share, which surpassed the Zacks Consensus Estimate of $2.77. The reported figure increased from the prior-year quarter’s $3.00.
Net sales of this company increased 7.1% year over year to $1.96 billion and outpaced the consensus estimate of $1.88 billion. On a constant-currency basis, net sales grew 6.8%.
Gross profit increased 6.2% year over year to $1.17 billion. The gross margin in the quarter declined 50 basis points to 59.8% from 60.3% in the year-ago period and surpassed our estimate of 57.4%. This reflected the timing of inventory flows and the mix of inventory sold during the quarter, with results benefiting from lower-tariff inventory moving through the pipeline.
The company’s SG&A expenses rose 4% year over year to $557 million. As a percentage of revenues, SG&A expenses stood at 28.5%, down 80 basis points from last year, primarily driven by favorable foreign currency exchange rate remeasurement impacts.
Deckers’ operating income was $614.4 million, up 8.3% from $567.3 million in the year-ago quarter. The operating margin came in at 31.4%, up 40 basis points from the prior-year period.
DECK’s Brand-Wise Discussion
The HOKA brand maintained its strong momentum, achieving an 18.5% year-over-year increase in sales to $628.9 million, exceeding our projected $585.3 million. HOKA’s growth was primarily driven by strength across both direct-to-consumer and wholesale channels, with gains in the U.S. and international markets. The strong performance reflected the broader consumer adoption of HOKA’s innovative and versatile products, supported by a more refined approach to managing the global marketplace. This resulted in balanced channel growth, with DTC revenues rising 19% and wholesale revenues increasing 18% from the prior year.
The UGG brand delivered solid results, posting a 4.9% year-over-year increase in net sales to $1.31 billion, beating our estimate of $1.25 billion. Growth was driven by strength across wholesale and direct-to-consumer channels, with wholesale revenues rising 4% and DTC sales increasing 5%. Wholesale performance benefited from strategic inventory allocations ahead of the peak season that improved in-stock positions and supported stronger fall demand. DTC growth was supported by effective global marketplace execution, higher consumer engagement and continued expansion of loyalty and digital channels, reinforcing UGG’s premium lifestyle positioning.
Meanwhile, net sales for Other Brands declined 55.5% year over year to $23.2 million compared with our estimate of $37.3 million, reflecting the phase-out of Koolaburra's standalone operations.
Deckers’ Channel & Geography-Wise Discussion
Wholesale net sales increased 6% year over year to $864.6 million, while DTC net sales increased 8.1% to $1.09 million. DTC comparable net sales jumped 7.3% year over year.
Domestic net sales increased 2.7% to $1.20 billion, while International net sales rose 15% to $756.7 million.
DECK’s Financial Snapshot
Cash and cash equivalents were $2.09 billion as of Dec. 31, 2025. The company ended the quarter with total stockholders’ equity of $2.61 billion and reported no outstanding borrowings.
In the fiscal third quarter, the company repurchased 3.8 million shares of its common stock for $348.5 million at an average price of $92.36 per share. As of Dec. 31, 2025, $1.8 billion remained under the company’s stock repurchase authorization.
Q4 Outlook for DECK
For the fourth quarter of fiscal 2026, Deckers expects a mixed operating environment, characterized by continued brand momentum, offset by the full impacts of higher tariffs. Management anticipates that HOKA will be the primary growth driver in the quarter, supported by sustained international demand, improving U.S. trends and strong performance across DTC and wholesale channels.
HOKA revenues are expected to grow 13-14% year over year, which would represent the largest quarterly revenue results in the brand’s history. This growth is expected to be fueled by ongoing global market share gains and strong consumer reception to recent and upcoming product launches.
In contrast, UGG revenues in the fiscal fourth quarter are expected to be roughly flat with the prior year. Management noted that this reflects the timing of wholesale shipments, with certain orders originally planned for the fiscal fourth quarter having shifted into the third quarter, resulting in a more balanced performance across the second half of the year.
From a profitability standpoint, Deckers expects the gross margin in the fiscal fourth quarter to face an approximate 200-basis-point headwind, entirely driven by tariffs. Management indicated that the fourth quarter will carry the highest quarterly tariff impact of fiscal 2026, reflecting the full burden of increased tariff rates. In addition, SG&A expenses are expected to deleverage modestly in the quarter as the company continues to invest in brand-building, marketing initiatives and operational capabilities to support growth.
Despite these pressures, management emphasized that the company remains focused on disciplined marketplace management and maintaining high levels of full-price selling as it closes out the fiscal year.
Updated Outlook for FY26
For fiscal 2026, Deckers raised its full-year outlook following a stronger-than-expected third-quarter performance. The company expects net sales of $5.40-$5.425 billion, reflecting continued strength across its core brands. From a brand perspective, HOKA is anticipated to deliver mid-teens revenue growth for the full year, driven by broad-based gains across regions and channels, while UGG revenues are expected to increase at a mid-single-digit rate, representing the high end of prior expectations.
The gross margin for fiscal 2026 is expected to be 57%, an improvement of roughly 100 basis points versus the prior guidance. This reflects a lower-than-anticipated net impact from tariffs, favorable pricing actions and strong full-price sell-through across the portfolio. SG&A expenses are expected to represent 34.5% of revenues, consistent with Deckers’ ongoing investment strategy to support long-term brand growth and operational scale.
The operating margin for the fiscal year is projected to be 22.5%, reflecting a 100-basis-point improvement versus the prior guidance. Earnings per share are expected to be $6.80-$6.85, indicating a 7-8% increase from last year’s reported EPS. Total share repurchases for fiscal 2026 are expected to exceed $1 billion, contributing more than 20 cents to EPS.
Regarding tariffs, the unmitigated impacts for the year are expected to be $110 million, while the net impacts are estimated at $25 million due to favorable pricing and inventory timing.
DECK Stock Past 3-Month Performance
Image Source: Zacks Investment Research
Shares of the Zacks Rank #3 (Hold) company have gained 22.6% in the past three months compared with the industry’s 14.3% growth.
Key Retail Picks
Some better-ranked stocks in the retail space are FIGS Inc. (FIGS - Free Report) , American Eagle Outfitters Inc. (AEO - Free Report) and The Gap, Inc. (GAP - Free Report) .
The Zacks Consensus Estimate for FIGS’ current financial-year earnings and sales suggests growth of 450% and 7.1%, respectively, from the year-ago actuals. FIGS delivered a trailing four-quarter average earnings surprise of 87.5%.
American Eagle is a specialty retailer of casual apparel, accessories and footwear. It sports a Zacks Rank of 1 at present.
The Zacks Consensus Estimate for American Eagle's current fiscal-year earnings and sales suggests a decline of 21.3% and growth of 2.5%, respectively, from the year-ago actuals. AEO delivered a trailing four-quarter average earnings surprise of 35.1%.
Gap is a premier international specialty retailer offering a diverse range of clothing, accessories, and personal care products. It currently has a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for Gap’s fiscal 2026 earnings and sales implies a decline of 2.7% and growth of 1.8%, respectively, from the year-ago actuals. Gap delivered a trailing four-quarter average earnings surprise of 19.1%.
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DECK Stock Jumps 13% on Q3 Earnings Beat & Raised FY26 Guidance
Key Takeaways
Deckers Outdoor Corporation (DECK - Free Report) reported impressive third-quarter fiscal 2026 results, with the top and bottom lines beating estimates and increasing year over year. Management highlighted strong brand momentum, particularly across HOKA and UGG, which drove the better-than-expected results and prompted the company to raise its fiscal 2026 guidance. Investor sentiment was positive, sending shares up 13.1% in the after-hours trading yesterday following the earnings release.
Deckers Outdoor Corporation Price, Consensus and EPS Surprise
Deckers Outdoor Corporation price-consensus-eps-surprise-chart | Deckers Outdoor Corporation Quote
Deckers’ Quarterly Performance: Key Metrics & Insights
DECK delivered quarterly earnings of $3.33 per share, which surpassed the Zacks Consensus Estimate of $2.77. The reported figure increased from the prior-year quarter’s $3.00.
Net sales of this company increased 7.1% year over year to $1.96 billion and outpaced the consensus estimate of $1.88 billion. On a constant-currency basis, net sales grew 6.8%.
Gross profit increased 6.2% year over year to $1.17 billion. The gross margin in the quarter declined 50 basis points to 59.8% from 60.3% in the year-ago period and surpassed our estimate of 57.4%. This reflected the timing of inventory flows and the mix of inventory sold during the quarter, with results benefiting from lower-tariff inventory moving through the pipeline.
The company’s SG&A expenses rose 4% year over year to $557 million. As a percentage of revenues, SG&A expenses stood at 28.5%, down 80 basis points from last year, primarily driven by favorable foreign currency exchange rate remeasurement impacts.
Deckers’ operating income was $614.4 million, up 8.3% from $567.3 million in the year-ago quarter. The operating margin came in at 31.4%, up 40 basis points from the prior-year period.
DECK’s Brand-Wise Discussion
The HOKA brand maintained its strong momentum, achieving an 18.5% year-over-year increase in sales to $628.9 million, exceeding our projected $585.3 million. HOKA’s growth was primarily driven by strength across both direct-to-consumer and wholesale channels, with gains in the U.S. and international markets. The strong performance reflected the broader consumer adoption of HOKA’s innovative and versatile products, supported by a more refined approach to managing the global marketplace. This resulted in balanced channel growth, with DTC revenues rising 19% and wholesale revenues increasing 18% from the prior year.
The UGG brand delivered solid results, posting a 4.9% year-over-year increase in net sales to $1.31 billion, beating our estimate of $1.25 billion. Growth was driven by strength across wholesale and direct-to-consumer channels, with wholesale revenues rising 4% and DTC sales increasing 5%. Wholesale performance benefited from strategic inventory allocations ahead of the peak season that improved in-stock positions and supported stronger fall demand. DTC growth was supported by effective global marketplace execution, higher consumer engagement and continued expansion of loyalty and digital channels, reinforcing UGG’s premium lifestyle positioning.
Meanwhile, net sales for Other Brands declined 55.5% year over year to $23.2 million compared with our estimate of $37.3 million, reflecting the phase-out of Koolaburra's standalone operations.
Deckers’ Channel & Geography-Wise Discussion
Wholesale net sales increased 6% year over year to $864.6 million, while DTC net sales increased 8.1% to $1.09 million. DTC comparable net sales jumped 7.3% year over year.
Domestic net sales increased 2.7% to $1.20 billion, while International net sales rose 15% to $756.7 million.
DECK’s Financial Snapshot
Cash and cash equivalents were $2.09 billion as of Dec. 31, 2025. The company ended the quarter with total stockholders’ equity of $2.61 billion and reported no outstanding borrowings.
In the fiscal third quarter, the company repurchased 3.8 million shares of its common stock for $348.5 million at an average price of $92.36 per share. As of Dec. 31, 2025, $1.8 billion remained under the company’s stock repurchase authorization.
Q4 Outlook for DECK
For the fourth quarter of fiscal 2026, Deckers expects a mixed operating environment, characterized by continued brand momentum, offset by the full impacts of higher tariffs. Management anticipates that HOKA will be the primary growth driver in the quarter, supported by sustained international demand, improving U.S. trends and strong performance across DTC and wholesale channels.
HOKA revenues are expected to grow 13-14% year over year, which would represent the largest quarterly revenue results in the brand’s history. This growth is expected to be fueled by ongoing global market share gains and strong consumer reception to recent and upcoming product launches.
In contrast, UGG revenues in the fiscal fourth quarter are expected to be roughly flat with the prior year. Management noted that this reflects the timing of wholesale shipments, with certain orders originally planned for the fiscal fourth quarter having shifted into the third quarter, resulting in a more balanced performance across the second half of the year.
From a profitability standpoint, Deckers expects the gross margin in the fiscal fourth quarter to face an approximate 200-basis-point headwind, entirely driven by tariffs. Management indicated that the fourth quarter will carry the highest quarterly tariff impact of fiscal 2026, reflecting the full burden of increased tariff rates. In addition, SG&A expenses are expected to deleverage modestly in the quarter as the company continues to invest in brand-building, marketing initiatives and operational capabilities to support growth.
Despite these pressures, management emphasized that the company remains focused on disciplined marketplace management and maintaining high levels of full-price selling as it closes out the fiscal year.
Updated Outlook for FY26
For fiscal 2026, Deckers raised its full-year outlook following a stronger-than-expected third-quarter performance. The company expects net sales of $5.40-$5.425 billion, reflecting continued strength across its core brands. From a brand perspective, HOKA is anticipated to deliver mid-teens revenue growth for the full year, driven by broad-based gains across regions and channels, while UGG revenues are expected to increase at a mid-single-digit rate, representing the high end of prior expectations.
The gross margin for fiscal 2026 is expected to be 57%, an improvement of roughly 100 basis points versus the prior guidance. This reflects a lower-than-anticipated net impact from tariffs, favorable pricing actions and strong full-price sell-through across the portfolio. SG&A expenses are expected to represent 34.5% of revenues, consistent with Deckers’ ongoing investment strategy to support long-term brand growth and operational scale.
The operating margin for the fiscal year is projected to be 22.5%, reflecting a 100-basis-point improvement versus the prior guidance. Earnings per share are expected to be $6.80-$6.85, indicating a 7-8% increase from last year’s reported EPS. Total share repurchases for fiscal 2026 are expected to exceed $1 billion, contributing more than 20 cents to EPS.
Regarding tariffs, the unmitigated impacts for the year are expected to be $110 million, while the net impacts are estimated at $25 million due to favorable pricing and inventory timing.
DECK Stock Past 3-Month Performance
Image Source: Zacks Investment Research
Shares of the Zacks Rank #3 (Hold) company have gained 22.6% in the past three months compared with the industry’s 14.3% growth.
Key Retail Picks
Some better-ranked stocks in the retail space are FIGS Inc. (FIGS - Free Report) , American Eagle Outfitters Inc. (AEO - Free Report) and The Gap, Inc. (GAP - Free Report) .
FIGS is a direct-to-consumer healthcare apparel and lifestyle brand. It flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FIGS’ current financial-year earnings and sales suggests growth of 450% and 7.1%, respectively, from the year-ago actuals. FIGS delivered a trailing four-quarter average earnings surprise of 87.5%.
American Eagle is a specialty retailer of casual apparel, accessories and footwear. It sports a Zacks Rank of 1 at present.
The Zacks Consensus Estimate for American Eagle's current fiscal-year earnings and sales suggests a decline of 21.3% and growth of 2.5%, respectively, from the year-ago actuals. AEO delivered a trailing four-quarter average earnings surprise of 35.1%.
Gap is a premier international specialty retailer offering a diverse range of clothing, accessories, and personal care products. It currently has a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for Gap’s fiscal 2026 earnings and sales implies a decline of 2.7% and growth of 1.8%, respectively, from the year-ago actuals. Gap delivered a trailing four-quarter average earnings surprise of 19.1%.