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Deckers' Surprise Blowout Has Wall Street Repricing the Story
Authored by Chris Markoch. Article Published: 2/1/2026.
Key Takeaways
- Deckers' stock jumped after posting record revenue and EPS while raising full-year guidance above analyst expectations.
- HOKA’s high-teens growth and stronger-than-expected UGG sales highlight durable brand demand and pricing power.
- Even with a $110 million tariff headwind, resilient margins suggest potential upside if trade pressures ease.
Investors have been waiting for that blowout earnings report. It just might have come from a place they weren't expecting. Deckers Outdoor Corp. (NYSE: DECK) stock surged 14.2% in after-hours trading after the company posted record results on both the top and bottom lines in its third-quarter report for fiscal 2026 (FY2026).
That gain consumed the upside embedded in the company's consensus price target, but the target is likely to move higher because of Deckers' raised guidance.
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Get the full story on this opportunity now.The footwear and apparel conglomerate raised its full-year guidance for both earnings per share (EPS) and net sales. For EPS, the company now expects FY2026 EPS of $6.80 to $6.85 per share, up from prior guidance of $6.30 to $6.39. That also tops analysts' consensus of $6.41.
Net sales guidance was nudged higher as well. Deckers now projects net sales of $5.40 billion to $5.425 billion, versus prior guidance of $5.35 billion and analysts' estimate of $5.36 billion.
HOKA and UGG Lead the Way
The results highlight resilient global demand for Deckers' HOKA and UGG brands. HOKA posted high‑teens growth in the quarter with roughly $629 million in revenue. Net sales for UGG rose 4.9% to $1.305 billion, ahead of estimates of $1.244 billion.
These outcomes indicate Deckers is gaining share in performance footwear while maintaining pricing power in its core lifestyle franchise, even as the broader consumer backdrop—seen across many retail stocks—remains uneven. Top‑line growth combined with expanding or stable margins is exactly what investors want to see heading into a potentially more volatile macro environment.
Analysts May Be Reluctant Bulls
Despite a clear beat‑and‑raise quarter, analysts may remain cautious relative to the fundamentals. Concerns include sustaining growth at HOKA's current scale, a normalization of UGG after years of outsized demand, and the fact that the stock's valuation already reflects strong past execution.
Also, while the company's forward guidance is higher, it isn't explosive. High‑single‑digit EPS growth off a record base is solid but not the sort of acceleration that by itself forces a rerating. Management has stated it will continue investing in marketing, distribution, and product innovation, which means some operating leverage will be reinvested rather than maximized in the near term.
In short, analysts don't dislike Deckers; they see a high‑quality compounder facing law‑of‑large‑numbers dynamics and macro uncertainty, which limits multiple expansion absent a new upside narrative. That context helps explain why tariff policy—and developments tied to the International Emergency Economic Powers Act (IEEPA)—has become a focal talking point.
Tariffs: A Real Headwind, But Also a Noisy Catalyst
On the conference call, Deckers management quantified the tariff impact at roughly $110 million for FY2026. The company said Q3 represented the largest quarterly tariff hit on a rate basis, with the full 20% burden expected in Q4.
Despite the headwind, gross margin was 59.8%, just below the forecast of 60.3%. That performance was driven by strong pricing power and a favorable mix, suggesting the brands have been able to pass a meaningful portion of higher costs onto consumers without materially denting demand.
If the U.S. Supreme Court were to strike down or roll back the IEEPA‑related tariffs, the most direct effect would be margin relief and potentially faster EPS growth than the current 7–8% guidance implies. That could prompt estimate revisions and give the Street more confidence that mid‑teens EPS growth is achievable again without relying solely on volume gains.
That said, the bull case does not hinge on a favorable tariff outcome. Management is already absorbing and managing a substantial tariff burden while beating expectations and raising guidance. Any IEEPA relief would therefore be incremental upside rather than the primary reason to own DECK stock.
Bottom line: Deckers delivered a beat‑and‑raise quarter led by HOKA and UGG. Tariffs are a meaningful near‑term headwind, but the company's pricing, mix, and guidance make further upside — particularly if tariff relief materializes — a plausible outcome for investors.
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