What Happened?
Shares of footwear and apparel conglomerate Deckers (NYSE: DECK) jumped 11.6% in the afternoon session after the company reported better-than-expected fiscal first-quarter results, driven by strong sales from its Hoka and Ugg brands.
The company posted a 17% revenue increase to $964.5 million, significantly beating analysts' expectations. This growth was driven by continued strong demand for its flagship brands, with Hoka sales increasing by nearly 20% and Ugg sales growing by about 19% year-over-year. A standout in the report was the company's international performance, where sales jumped by 50%. The robust results led to positive reactions from Wall Street, with analysts at Raymond James raising their price target on the stock and maintaining a Strong Buy rating, citing the better-than-expected performance across all key financial metrics.
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What Is The Market Telling Us
Deckers’s shares are quite volatile and have had 16 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 2 months ago when the stock dropped 19.9% on the news that 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.".
Deckers is down 42.5% since the beginning of the year, and at $117.67 per share, it is trading 47.3% 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 $3,344.
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