Deckers’ third quarter results were met with a negative market reaction as investors focused on the company’s cautious full-year outlook despite revenue and profit surpassing Wall Street’s expectations. Management highlighted that international growth, particularly in Europe and China, drove the quarter’s performance, while U.S. consumer sentiment remained under pressure. CEO Stefano Caroti underscored that strong demand for HOKA and UGG brands was led by distinctive new product offerings and robust wholesale partnerships. Caroti remarked, “The U.S. marketplace remains dynamic, with recent consumer trends indicating a heightened preference for multi-brand shopping experiences.”
Is now the time to buy DECK? Find out in our full research report (it’s free for active Edge members).
Deckers (DECK) Q3 CY2025 Highlights:
- Revenue: $1.43 billion vs analyst estimates of $1.42 billion (9.1% year-on-year growth, 0.8% beat)
- EPS (GAAP): $1.82 vs analyst estimates of $1.58 (15.1% beat)
- Adjusted EBITDA: $349.8 million vs analyst estimates of $309.4 million (24.4% margin, 13.1% beat)
- EPS (GAAP) guidance for the full year is $6.35 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 22.8%, in line with the same quarter last year
- Locations: 193 at quarter end, up from 178 in the same quarter last year
- Constant Currency Revenue rose 8.3% year on year (20.4% in the same quarter last year)
- Same-Store Sales fell 4.2% year on year (17% in the same quarter last year)
- Market Capitalization: $12.44 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Deckers’s Q3 Earnings Call
- Laurent Vasilescu (BNP Paribas) asked why full-year revenue guidance for HOKA and UGG was more cautious than earlier frameworks, and CFO Steve Fasching explained that “a more cautious consumer” and the impact of tariffs were now reflected in the guidance.
- John Kernan (TD Cowen) inquired about the relative outlook for wholesale versus direct-to-consumer growth in the U.S., and Fasching clarified that wholesale expansion in the first half impacted DTC growth, but improvements are expected in DTC for the second half.
- Adrienne Yih-Tennant (Barclays) questioned the effects of recent price increases and consumer demand elasticity. CEO Stefano Caroti stated, “We have not seen any issues. Sell-through on key styles continues to be strong for both UGG and HOKA.”
- Samuel Poser (Williams Trading) probed deeper into U.S. consumer behavior and the reasons for management’s cautious stance, with Fasching emphasizing that caution reflects current economic signals and Deckers’ focus on long-term brand building rather than chasing short-term sales.
- Jonathan Komp (Baird) asked about the cadence of HOKA product launches and future margin pressures. Caroti outlined plans for more spaced-out launches and broader product lines, while Fasching confirmed margin headwinds would persist as long as tariffs remain elevated.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be tracking (1) the pace of recovery in U.S. direct-to-consumer traffic and whether improvements materialize as expected, (2) the effectiveness of Deckers’ tariff mitigation strategies and their impact on gross margins, and (3) sustained strength and market share gains in international regions for both HOKA and UGG. Additionally, how Deckers manages inventory and executes new product launches in a shifting consumer environment will be critical markers of its progress.
Deckers currently trades at $84.10, down from $102.50 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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