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Deckers topped Q2 estimates with revenue of $1.43B (+9.1% YoY) and EPS of $1.82 vs. $1.58 est., but shares fell 10% as investors focused on slowing growth momentum.
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FY2026 outlook calls for $5.35B revenue and EPS of $6.30–$6.39, signaling steady margins but limited upside surprise.
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Deckers Outdoor (NYSE: DECK) delivered better-than-expected earnings for the second quarter of fiscal 2026, but the market punished the stock anyway, a telling disconnect that underscores investor concerns about the company’s trajectory despite solid near-term execution.
The footwear and apparel company reported revenue of $1.43 billion, marginally beating the $1.42 billion consensus estimate and growing 9.1% year-over-year. Earnings per share came in at $1.82, significantly outpacing the $1.58 estimate. Operating income expanded to $326.5 million from $305.1 million in the prior year, while gross profit climbed 9.6% to $803.8 million. On paper, these are solid results.
| Metric | Actual | Consensus | YoY Change | Beat/Miss |
|---|---|---|---|---|
| Revenue | $1.43 B | $1.42 B | +9.1% | ✅ Beat |
| EPS (Normalized) | $1.82 | $1.58 | — | ✅ Beat |
| Operating Income | $326.5 M | — | +7.0% (vs $305.1 M prior year) | — |
Yet DECK shares are down 10%, a decline that reflects a broader market skepticism about the company’s growth narrative.
Brand Performance Masks Underlying Concerns
Both flagship brands posted double-digit growth. HOKA, the athletic footwear line that has become a growth engine, delivered $634.1 million in revenue (+11.1% YoY), while UGG generated $759.6 million (+10.1% YoY). CEO Stefano Caroti highlighted “strong performance and international momentum for these powerful brands,” signaling confidence in the company’s ability to sustain growth.
| KPI | Q2 FY 2026 | Q2 FY 2025 | YoY Change | Commentary |
|---|---|---|---|---|
| HOKA Revenue | $634.1 M | — | +11.1% | Continued global growth and category leadership |
| UGG Revenue | $759.6 M | — | +10.1% | Strong international performance |
| Operating Income | $326.5 M | $305.1 M | +7.0% | Margin resilience despite cost inflation |
| Gross Profit | $803.8 M | — | +9.6% | Aligned with revenue growth; healthy mix |
However, the market appears to be pricing in deceleration concerns. A 9.1% revenue increase, while respectable, represents a slowdown from the explosive growth DECK posted in prior years. The stock’s 50% decline over nine months suggests investors are reassessing the company’s valuation and growth prospects in a more challenging consumer environment.
Capital Return & Full-Year Guidance
Deckers returned capital aggressively, repurchasing 2.6 million shares for $282 million during the quarter. The company maintains $2.2 billion in remaining authorization, indicating confidence in its financial position and commitment to shareholder returns.
For fiscal 2026, management guided for revenue of approximately $5.35 billion, with EPS of $6.30 to $6.39 and gross margins of roughly 56%. The operating margin guidance sits at 21.5%,reflecting a high-quality business model, but one that the market is currently discounting.
| Metric | New FY Guidance | Direction | Commentary |
|---|---|---|---|
| Revenue | $5.35 B | ⚖️ Flat | Reflects steady growth outlook |
| EPS (Normalized) | $6.30 – $6.39 | ⚖️ Flat | Within expected range; solid profitability |
| Gross Margin | ~56% | ⚖️ Flat | Indicates cost discipline and mix quality |
| Operating Margin | ~21.5% | ⚖️ Flat | Sustained operating leverage |
| Share Repurchases | $282 M (2.6 M shares) | 📈 Raised | Reinforces capital return strategy |
The Disconnect: Why Better Earnings Didn’t Help
The negative stock reaction despite earnings beats suggests the market has already priced in the company’s guidance and is concerned about execution risks beyond fiscal 2026. With the stock down 10.8% over the past month alone and momentum weakening (RSI at 45.11), investors appear focused on whether DECK can reignite the growth that characterized its run to $202 earlier this year.
The elevated trading volume of 2.7 million shares indicates active selling pressure rather than passive rebalancing, a signal that institutional and retail investors are reassessing their conviction on the stock.
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