Deckers Outdoor Corporation

What they do

Deckers designs, markets and distributes footwear, apparel and accessories under three proprietary brands: HOKA, UGG and Teva. It sells through a wholesale channel of third-party retailers and international distributors and through a Direct-to-Consumer channel made up of e-commerce and retail stores. All products are made by independent third-party manufacturers rather than in company-owned factories. The company reports three operating segments: HOKA, UGG and Other brands (primarily Teva, plus Koolaburra and AHNU).

Revenue drivers

• HOKA — Premium performance footwear originally designed for ultra-runners, now spanning running, trail, hiking, fitness and lifestyle footwear plus apparel and accessories. In Q1 FY2027 it generated $703.5 million of net sales, 7.7% growth and about 69% of quarterly revenue.
• UGG — Iconic premium comfort footwear, apparel and accessories with year-round offerings and a broad global demographic. Q1 FY2027 net sales were $278.0 million, up 4.9% and roughly 27% of quarterly revenue.
• Direct-to-Consumer (DTC) — Company-operated e-commerce and retail stores selling all brands directly to consumers. Q1 FY2027 DTC net sales rose 13.0% to $352.8 million with comparable sales up 6.8%, about 35% of quarterly revenue.
• Wholesale — Sales to partner retailers, specialty outdoor and sporting goods retailers, department stores, online retailers and international distributors. Q1 FY2027 wholesale net sales grew 2.2% to $666.7 million, about 65% of quarterly revenue.

Recent performance

For the first quarter of fiscal 2027 ended June 30, 2026, net sales increased 5.7% to $1.020 billion from $964.5 million, the first quarter above $1 billion. HOKA rose 7.7% to $703.5 million, UGG rose 4.9% to $278.0 million, and Other brands fell 18.1% to $37.9 million, partly reflecting the phase-out of Koolaburra standalone operations. Gross margin improved 60 basis points to 56.4%, but SG&A rose 12.7% to $419.9 million, operating income fell 6.0% to $155.3 million, and operating margin declined 190 basis points to 15.2%. Diluted EPS increased 1.1% to $0.94. Full fiscal 2026 revenue was $5.47 billion with net income of $1.02 billion.

Strategy

Management points to HOKA and UGG as the focus, describing continued expansion of product offerings, elevated marketing, brand experiences and global marketplace presence. Deckers continues to widen HOKA wholesale distribution globally, including additional mono-branded locations run by partner retailers, and to review UGG wholesale distribution and product segmentation as retail evolves. The company is investing in distribution facilities, e-commerce sites and retail store footprint while phasing out smaller brands such as Koolaburra and AHNU and having sold Sanuk in August 2024. Capital allocation includes share repurchases, with $338.2 million bought in Q1 FY2027 and roughly $4.7 billion remaining under authorization, and the company had no outstanding borrowings at June 30, 2026.

Risks

• Tariffs and trade policy — Deckers has paid about $120 million in gross IEEPA tariffs, is filing for refunds it has not yet recognized, and says mitigation efforts will not fully offset expected tariff costs this fiscal year.
• Consumer preference shifts — The footwear and apparel industry is subject to rapid changes in fashion tastes, and the company states that failing to anticipate demand could cost sales, harm customer relationships and reduce brand loyalty.
• Concentrated sourcing and supply chain — All products are made by independent third-party contractors with a geographic concentration of manufacturing, exposing Deckers to material availability, overseas production reliability and logistics disruption.
• Brand and product concentration — Growth and results depend heavily on HOKA and UGG, which together were about 96% of Q1 FY2027 net sales, while Other brands declined 18.1% in the quarter.

Outlook

For fiscal 2027 ending March 31, 2027, management still expects net sales of $5.86 billion to $5.91 billion, with HOKA up low-double-digits and UGG up mid-single-digits versus last year. Gross margin is now expected slightly better than 56.5%, operating margin slightly better than 21.5%, SG&A about 35% of net sales, and an effective tax rate of approximately 23%. Diluted EPS guidance was raised to $7.35 to $7.50, five cents above the prior outlook, and assumes repurchases equal to roughly 80% of projected free cash flow. The outlook does not assume collection of previously paid tariff refunds.