What Happened?
Shares of footwear and apparel conglomerate Deckers (NYSE: DECK) fell 19.9% in the afternoon session after the company reported weak first quarter 2025 results: both revenue and EPS guidance for the next quarter missed. The miss was largely due to macro uncertainty tied to global trade policies and softer-than-expected domestic demand, with management calling out the lack of visibility and stepping away from providing full-year guidance altogether.
Still, the just-ended fourth quarter told a brighter story. Constant currency revenue rose 7.5%, led by a 10% jump in HOKA sales and a 3.6% gain in UGG, while EPS beat expectations handily. This strength was fueled by solid international growth and stable margins.
Zooming out, we think this was a mixed quarter, and the weak guidance likely weighed on shares.
Following the mixed performance, Evercore downgraded the stock from Buy to Neutral, adding, "Once a well-loved story with strong growth momentum and margin expansion, we think DECK might be entering a new phase of lower growth profile as we see signs of deceleration across its two key brand growth engines – UGG and HOKA."
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What The Market Is Telling Us
Deckers’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. But moves this big are rare even for Deckers and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock dropped 16.8% on the news that the company reported mixed fourth quarter 2024 results: its full-year revenue guidance slightly missed even though the company raised it. The sales guidance suggested a steady slowdown in growth to the mid-teens.
On the other hand, Deckers blew past analysts' constant currency revenue and EPS estimates.
Overall, this quarter had some key positives, but the market was expecting even better results.
Deckers is down 49.9% since the beginning of the year, and at $102.38 per share, it is trading 54.1% below its 52-week high of $223.11 from January 2025. Investors who bought $1,000 worth of Deckers’s shares 5 years ago would now be looking at an investment worth $3,412.
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