Deckers (DECK) Surges 12% After Hours following Earnings Beat

by MarketNewsData

Deckers crushed expectations for its fiscal first quarter, driven by strong performance in its Hoka and Ugg brands and robust international demand. Shares jumped over 12% in after-hours trading after the company delivered a clean beat on both top and bottom lines.

Earnings Highlights:

  • Revenue: $964.5 million, up 16.9% year-over-year. This beat consensus estimates of around $900 million.
  • EPS (Diluted GAAP): $0.93 vs. estimates around $0.68, a 36.8% upside surprise.
  • Brand Performance:
    – Hoka: Sales rose nearly 20% to $653 million.
    – Ugg: Up nearly 19% to $265 million.
    – Other brands: Down 19% to $46.3 million.
  • Channel Mix:
    – Wholesale revenue surged 27%.
    – Direct-to-consumer (DTC) sales were flat (+0.5%), with a 2.2% drop in comparable sales.
  • Geographic Trends:
    – International revenue soared 49.7%.
    – U.S. sales declined 2.8%.
  • Margins & Profitability:
    – Gross margin slipped to 55.8% from 56.9%.
    – Operating income climbed to $165.3 million, up from $132.8 million last year.
    – Operating margin expanded to 17.1%.
  • Cash & Buybacks:
    – Cash balance: $1.72 billion.
    – Zero debt.
    – Repurchased 1.7 million shares for ~$183 million.
    – $2.4 billion remains under buyback authorization.

Conference Call Insights:

  • Tariffs: Management flagged a $185 million cost impact from newly imposed Vietnam tariffs. They plan to offset this with pricing actions.
  • Global Growth: Leadership highlighted strength in Europe and China. The Hoka and Ugg brands remain underpenetrated internationally, presenting room for expansion.
  • Outlook Caution: Deckers once again declined to issue full-year guidance, citing macro uncertainty and tariff-related volatility. However, they expressed confidence in strong brand momentum and margin management.

Q2 FY2026 Guidance:

  • Revenue: $1.38–$1.42 billion
  • EPS: $1.50–$1.55 (excluding repurchase impact)

Takeaway:
Deckers delivered a strong beat, proving its brand strength and ability to manage through cost pressures. While lack of full-year guidance keeps some uncertainty in play, the surge in international growth and aggressive buybacks are strong positives. The market responded with a double-digit gain in after-hours trading—clear validation of the quarter’s performance.

More Live News