Deckers Trims Sales Forecast Even as Hoka and Ugg Keep Climbing

Deckers Outdoor Corporation delivered a familiar contradiction this quarter: strong earnings, cautious outlook. The Goleta, California-based company posted second-quarter fiscal 2027 net sales of $1.48 billion, up 3.5% (2.8% on a constant-currency basis) versus a year earlier, yet it lowered its full-year net sales guidance — a reminder that in today’s consumer climate, momentum and expectations are not the same thing.

The headline figures are healthy on the surface. Hoka generated $677.2 million in quarterly net sales, growing 6.8%, while Ugg contributed $786.4 million, up 3.5%. Gross margin expanded to 60.5% from 56.2% a year ago, operating income rose to $389.5 million from $326.5 million, and diluted earnings per share reached $2.31, up from $1.82. Management credited “disciplined marketplace management and a focus on expense control in a challenging consumer environment.”

Buried in those results, though, were two wrinkles worth noting. Direct-to-consumer (DTC) net sales turned negative in the quarter, falling 1.8% to $387.5 million, even as wholesale grew 5.5% to $1.09 billion. That mix shift — leaning more on wholesale — can protect volume but often sacrifices margin control and brand storytelling at the point of sale. Geographically, domestic sales dipped 0.4% to $835.8 million while international rose 9.0% to $644.7 million, confirming that Deckers’ growth is increasingly an overseas story.

The tariff refunds were a quiet tailwind. Second-quarter results included net refunds of IEEPA tariffs totalling $46 million plus $3 million in interest, lifting gross and operating margins by roughly 310 basis points and adding $0.28 to EPS after tax. Those are one-off benefits, not recurring strength.

It is the forward guidance that captures attention. Deckers now expects full-year consolidated net sales of $5.70 billion to $5.725 billion, down from its prior $5.86 billion to $5.91 billion. Hoka is projected to grow at a high-single-digit rate, lowered from low double digits, and Ugg at a low-single-digit rate, down from mid-single digits. In a telling move, the company raised its full-year diluted EPS forecast to $7.80–$7.95 — including an estimated $0.52 benefit from tariff refunds — suggesting margin discipline is now doing the heavy lifting where top-line growth cannot.

CEO Stefano Caroti struck a measured tone. “As we move through the back half of fiscal 2027, we are taking deliberate actions to strengthen our connection with consumers, sharpen execution, and concentrate resources behind our greatest opportunities,” he said, underscoring that the brand is prioritising focus over sprawl.

For leather and footwear suppliers, the takeaway is nuanced. A wholesale-led, internationally growing Deckers is still a large and stable customer, but the lowered growth rates and DTC softness hint at a more promotional, more competitive marketplace. Suppliers should expect continued emphasis on cost discipline and tighter inventory — the same forces rippling across the entire athletic and lifestyle footwear sector.

Source: World Footwear (worldfootwear.com)