Deckers stock sinks on outlook worries over Hoka, Ugg growth
Hoka shoes are seen in a store in Krakow, Poland, on February 1, 2023.
Jakub Porzycki | Nurfoto | Getty Images
Shoe maker’s shares Decker Brands It fell more than 12% on Friday after the company cut its sales guidance Hoka and Ugg, two brands driving growth, due to concerns that tariffs would lead to a decline in demand.
Hoka, an up-and-coming running shoe brand, is expected to grow at a low youth percentage in fiscal 2026, following 24% growth in last year’s period, while Boots brand Ugg is expected to grow in the low to mid-single-digit percentage range, following 13% growth in last year’s period.
In May, the company said Hoka and Ugg were expected to grow in the mid-teens and mid-single digits, respectively, in fiscal 2026, but it rescinded that forecast, saying it was designed before President Donald Trump’s tariffs were implemented. He measured the expected impact on costs at the time, but said it needed to be determined what kind of impact new taxes might have on demand.
When reporting On Thursday, finance chief Steven Fasching said following second-quarter financial results that the effects of tariffs and higher prices on demand were now clearer.
“Part of the framework that we presented at the beginning of the year was what kind of growth would we see if the tariffs didn’t have an impact on consumers, and we still believe that, right? But we do, and we’re seeing some impacts on the U.S. consumer now,” Fasching told analysts on the company’s conference call. “As U.S. consumers begin to see some price increases, this impacts consumer discretionary purchasing behavior.”
He added that the guidance wasn’t too far off from what the company initially thought, but acknowledged there was a “slight reduction” in its forecasts.
The slowing growth rate of Deckers’ two best-performing lines and adjustments to sales guidance signal that the two brands may be losing momentum after years of superior performance. Together, Hoka and Ugg account for the vast majority of Deckers’ revenue, and they are critical in plugging weak spots in other categories.
But CEO Dave Powers downplayed fears of a long-term slowdown, telling investors that both brands remain strong among core consumers.
“We are confident about the long-term trajectory of our portfolio,” Powers said. “While tariffs and inflation create pressure in the short term, Hoka and Ugg continue to lead in brand awareness and market share gains in their categories.”
Beyond Hoka and Ugg, Deckers’ full-year revenue forecast fell short of analysts’ expectations. The company expects revenue of about $5.35 billion in fiscal 2026, below Wall Street’s forecast of $5.45 billion, according to LSEG. According to LSEG, it expects earnings per share to be between $6.30 and $6.39; This is approximately in line with the estimate of $6.32 per share.
In the company’s call with analysts, Fasching warned that tariff costs could total around $150 million this fiscal year. Executives said they expect to cover about half of those costs through price adjustments and cost sharing with factory partners.
Deckers’ shares have already fallen more than 55% year to date, leaving investors on edge for any sign that demand will slow.
