Deckers Outdoor Soars on HOKA Momentum, UGG Resilience; Raises Full-Year Outlook

Footwear Giant Deckers Rides Brand Strength to Record Quarter, Eyes Further Expansion

GOLETA, Calif. – Deckers Outdoor Corporation (NYSE: DECK) delivered a powerful performance in its fiscal third quarter, underscoring the enduring appeal of its flagship brands HOKA and UGG in a challenging retail environment. The company reported revenue of $1.96 billion, a 7% increase year-over-year, while diluted earnings per share jumped 11% to a record $3.33.

Management painted a picture of balanced, profitable growth during the earnings call. HOKA continued its explosive trajectory with revenue surging 18% to $629 million, while the iconic UGG brand reached a new high of $1.3 billion, up 5%. President and CEO Stefano Caroti emphasized that this growth was achieved through a healthy mix of direct-to-consumer (DTC) and wholesale channels, with international markets notably outpacing domestic growth.

"Our focus on premium brand positioning and disciplined marketplace management is paying dividends," Caroti stated. He pointed to "resilient price elasticity" as a key factor, allowing the company to maintain high levels of full-price selling and protect margins.

Financial Fortitude and Strategic Maneuvers

CFO Steve Fasching highlighted a gross margin of 59.8%, which exceeded company expectations. This strength was attributed to favorable timing on tariff impacts, benefits from strategic pricing actions—particularly within the UGG segment—and lower promotional activity than planned. Both brands achieved a higher average selling price compared to the prior year.

Operational efficiency also improved, with selling, general, and administrative (SG&A) expenses as a percentage of revenue decreasing by 80 basis points to 28.5%.

A significant portion of the call was dedicated to brand-specific strategies. For UGG, Caroti detailed how strategic inventory allocation to wholesale partners ahead of the peak season bolstered fall sales, while the DTC channel was leveraged to capture late-season demand. New product launches like the Quill franchise and high-profile collaborations (e.g., UGG x Sacai) are fueling consumer engagement and testing new markets.

HOKA's story was one of refined execution. Caroti credited a "healthy pull model of demand" and a revamped membership program for improving key DTC metrics, including revenue per consumer. Notably, the company has successfully managed the transition of key franchises like the Bondi, leading to a cleaner marketplace and stronger sell-through rates. According to Circana data, HOKA significantly increased its market share in the U.S. road running category for shoes above $140.

Raised Guidance and a Confident Outlook

Bolstered by the quarter's results, Deckers raised its full-year fiscal 2026 outlook. The company now expects a net tariff impact of approximately $25 million for the year, having mitigated a larger potential headwind through pricing and inventory timing.

For the critical fourth quarter, HOKA is projected to deliver 13-14% growth, marking its largest quarterly revenue ever. UGG revenue is expected to be roughly flat, as some orders were pulled forward into Q3. Looking further ahead, management expressed optimism for UGG's growth in fiscal 2027, encouraged by global order book trends.

The company ended the quarter with a formidable war chest of $2.1 billion in cash and no debt, continuing its aggressive share repurchase program. Deckers is on track to buy back over $1 billion in shares this fiscal year.

Market Voices: Analysts and Observers Weigh In

"Deckers has masterfully navigated the 'post-pandemic normalization' for footwear. HOKA isn't just a running brand anymore; it's a lifestyle phenomenon with immense white space, especially internationally. Their DTC discipline is a textbook case for the sector." – Marcus Thorne, Retail Analyst at Brighton Capital.

"The numbers are strong, no doubt. But let's not ignore the elephant in the room: a $110 million tariff overhang that's only being temporarily masked by inventory tricks. This 'resilient pricing' narrative will be tested if consumer wallets tighten. Calling this a flawless victory is premature." – Janet Kowalski, Founder of The Skeptical Investor blog.

"As a long-term shareholder, the most exciting part is the distribution runway. HOKA is in barely half of its target U.S. stores and earlier-stage internationally. This isn't a saturated story; it's a global rollout in its middle innings." – David Chen, Portfolio Manager.

"The men's category growth for UGG is a silent killer. They've successfully moved beyond the classic boot with styles like Tasman and Weather Hybrid, capturing a whole new demographic. That's strategic brand evolution in action." – Rebecca Soto, Trend Forecaster.

Deckers, recently named one of The Wall Street Journal's best-managed companies of 2025, appears poised to continue its run, betting on brand heat, operational savvy, and a clear path for global expansion.