What Deckers Outdoor (DECK) Said on Its Q2 Earnings Call

Key Points

• Fiscal Q2 revenue rose 3.5% to $1.48 billion, while adjusted diluted EPS increased 11.5% to $2.03, excluding a $0.28-per-share benefit from IEEPA tariff refunds. HOKA and UGG growth was partly offset by softer U.S. direct-to-consumer demand and a European logistics disruption that reduced revenue by about $22 million.
• HOKA revenue grew 7% and UGG revenue increased 4%, driven primarily by wholesale and international strength, while both brands’ U.S. direct-to-consumer businesses declined or faced pressure. Deckers maintained pricing discipline and reported a 120-basis-point underlying gross-margin improvement excluding tariff refunds.
• Deckers revised its fiscal 2027 outlook to revenue of $5.7 billion–$5.725 billion and diluted EPS of $7.80–$7.95, including tariff-refund benefits. The company also repurchased $299 million of shares during the quarter and plans to buy back $1 billion during the fiscal year.

Deckers Outdoor NYSE: DECK reported fiscal second-quarter revenue growth of 3.5% to $1.48 billion, as gains at its HOKA and UGG brands were partly tempered by softer U.S. direct-to-consumer demand and shipping disruptions in Europe.

Diluted earnings per share totaled $2.31, including a $0.28 benefit from net refunds of IEEPA tariffs received during the quarter. Excluding that benefit, diluted EPS was $2.03, up 11.5% from a year earlier and above the high end of the company’s guidance range, according to President and Chief Executive Officer Stefano Caroti.

“Despite some top-line pressure, we maintained healthy gross margins, delivered global growth, and continued to invest in the long-term strength of our brands,” Caroti said.

International strength offset by U.S. e-commerce pressure

HOKA revenue increased 7% year over year to $677 million. Wholesale revenue rose 9% to $444 million, while direct-to-consumer sales increased 4% to $234 million. The brand continued to see strong performance among global wholesale accounts and in international markets, while its U.S. direct-to-consumer business faced pressure from a more promotional athletic footwear market.

Caroti said Deckers maintained its full-price discipline rather than matching competitors’ promotions. The company said consumers increasingly concentrated shopping around promotional events and were prioritizing products with immediate relevance and utility.

HOKA’s core franchises, led by Bondi, performed well, and the newly introduced Clifton Pro also contributed to results. However, Caroti acknowledged that some franchise updates introduced in calendar 2026 did not resonate as strongly with consumers and wholesale partners. He said the company has incorporated that feedback into plans beginning with spring 2027.

Deckers outlined several planned HOKA launches, including Bondi 10 in January, Mach Pro in April, Mach 8 in early fall, Fly Pace at a $115 price point in January, and Bondi Ultra X at $325 in June. The company also plans to expand lifestyle offerings through updated archive models, new material and color applications for Bondi and Clifton, and the Cielo 70 lifestyle silhouette.

UGG revenue rose 4% to $786 million in the quarter. Wholesale sales increased 7% to $641 million, while direct-to-consumer sales declined 8% to $146 million. Management said wholesale performance was healthy in both U.S. and international regions, positioning the brand for the holiday season.

Caroti said UGG consumers have been purchasing closer to when products are needed, reinforcing the importance of offering products across more styles and wearing occasions. He highlighted demand for Lowmel sneakers, Goldenstar Evelina clogs, Zora and Quill styles, and fleece-led apparel. The company also cited early demand for Sunburst, Classic Tall and Classic Mini Dipper Legwarmer products.

For the holiday period, UGG plans coordinated marketing, digital experiences and product storytelling centered on its “Gift the Feeling” campaign. The company said it would manage promotions selectively during peak shopping periods to protect brand health.

European logistics disruption affected revenue

Deckers said disruptions involving its third-party logistics provider in Europe delayed certain shipments during a peak shipping period. Chief Financial Officer Steve Fasching said the disruption reduced second-quarter revenue by approximately $22 million.

The company has taken corrective actions with the provider to restore normal operations, improve visibility and reduce the risk of future disruptions, Caroti said. Fasching noted that not all delayed revenue is expected to shift into the second half of the fiscal year, as some orders could be pushed out further or canceled.

International markets remained a source of growth, with Asia-Pacific posting the company’s highest percentage growth among international regions. Management said demand signals in Europe, the Middle East and Africa remained strong despite the fulfillment disruption.

Margins rose as company limited promotional activity

Second-quarter gross margin increased 430 basis points to 60.5%. The result included an approximately 310-basis-point benefit from IEEPA tariff refunds, net of cost-sharing arrangements with independent manufacturers. Excluding the refund benefit, gross margin improved 120 basis points, driven by favorable full-price selling and product mix.

SG&A expense rose 6% to $506 million, though spending was below Deckers’ prior expectation as the company aligned costs with lower revenue growth. Marketing and technology remained the principal areas of year-over-year investment. Operating margin was 26.3%, or 23.2% excluding the IEEPA refund benefit, compared with 22.8% a year earlier.

Fasching said the company expects a modest increase in promotional activity in the third quarter, as well as higher freight rates, but does not intend to enter what management characterized as a heavily promotional competitive environment.

“We don’t want to chase revenue that is not productive to the brand or profitability,” Fasching said. He added that the company expects the athletic footwear marketplace to look better in the second half of calendar 2027.

Fiscal 2027 outlook revised

Deckers now expects fiscal 2027 revenue of $5.7 billion to $5.725 billion. The company expects HOKA revenue to rise by a high-single-digit percentage and UGG revenue to increase by a low-single-digit percentage.

• Gross margin is expected to be about 58.5%, including approximately $88 million in net IEEPA tariff refund benefits recognized in cost of sales.
• SG&A expense is projected at approximately 35.5% of revenue.
• Operating margin is expected to be approximately 23%, including tariff refund benefits received to date.
• Diluted EPS is projected in a range of $7.80 to $7.95, assuming $1 billion in share repurchases during fiscal 2027.

For the third quarter, Deckers expects total revenue growth in the low single digits, with UGG up low single digits and HOKA up low to mid-single digits. Third-quarter diluted EPS is expected to range from $3.52 to $3.60, including an estimated $0.24 benefit from IEEPA tariff refunds.

During the second quarter, Deckers repurchased approximately $299 million of shares at an average price of $93.65. Through the first six months of fiscal 2027, the company repurchased $637 million of stock, representing about 5% of outstanding common shares. As of Sept. 30, 2026, Deckers had $1.2 billion in cash and equivalents, no outstanding borrowings, and approximately $4.4 billion remaining under its share repurchase authorization.

Deckers also announced that Rati Sahi Levesque will join its board effective Dec. 1. Levesque brings more than 15 years of retail leadership experience, including digital innovation and consumer-engagement expertise. Lauri Shanahan will retire from the board when Levesque joins.

About Deckers Outdoor (NYSE:DECK)

Deckers Outdoor Corporation, doing business as Deckers Brands NYSE: DECK, is a global footwear, apparel and accessories company. Its portfolio includes UGG, known for sheepskin and casual footwear; HOKA, which focuses on performance and running shoes; Teva, which offers outdoor and sport sandals and footwear; and Koolaburra by UGG, a lifestyle footwear brand.

The company sells its products through department and specialty stores, independent retailers, international distributors, company-owned retail stores and e-commerce websites.

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