Deckers cuts sales forecast to $5.700–$5.725 billion, raises earnings outlook
Key Facts
Deckers Brands cut its fiscal 2027 sales forecast to between $5.700 billion and $5.725 billion while raising its earnings-per-share outlook, according to its fiscal second-quarter earnings statement. The company had projected annual sales of between $5.86 billion and $5.91 billion in its July disclosure before lowering the range in the latest update. It raised its fiscal-year diluted earnings-per-share forecast to between $7.80 and $7.95 from the range of $7.35 to $7.50 projected in July. The new earnings outlook includes an after-tax benefit of approximately $0.52 per share from tariff refunds and related interest, according to the company's statement. The revision thus lowers the annual sales outlook while raising earnings-per-share estimates with that tariff-related contribution included in expected profits.
Quarterly results showed Deckers' sales rose 3.5% year on year to $1.481 billion in the fiscal second quarter, compared with $1.431 billion in the corresponding quarter. Diluted earnings per share were $2.31 for the period, according to the earnings statement, which also included the revised fiscal-year outlook. The company's gross margin rose to 60.5% from 56.2% in the comparable period as overall sales continued to grow. By sales channel, direct-to-consumer comparable sales fell 6.4% during the fiscal second quarter, according to figures released by the company. Management said on the earnings call, a transcript of which was published by Investing.com, that increased discounting in the U.S. market weighed on its e-commerce business. Describing the development of price competition, it said "promotional activity increased throughout the quarter, particularly in athletic footwear." It said this pressure came as the company maintained full-price selling amid expanding promotions, while quarterly gross margin improved.
The annual outlook revision follows a fiscal year in which Deckers recorded sales growth of 9.8%, according to its previous annual earnings statement. Fiscal 2026 sales totaled approximately $5.472 billion, compared with $4.986 billion in fiscal 2025, providing the annual comparison base preceding the new forecast period. In the fiscal second quarter of fiscal 2027, Hoka sales rose 6.8% year on year, according to the quarterly earnings statement. Ugg recorded year-on-year sales growth of 3.5% over the same period, with both brands continuing to increase sales at different rates. Geographically, the company's international sales rose 9.0% year on year during the quarter, another aspect of quarterly performance alongside brand and sales-channel results.
On operations, management said during the earnings call that the company's business in Europe, the Middle East and Africa was affected by disruptions at its third-party logistics provider. It described the problem as "service disruptions at the third-party logistics provider," according to the call transcript published on Investing.com. It said the disruptions affected shipment timing and quarterly sales in the region, among the factors it discussed when presenting fiscal second-quarter performance. For the fiscal third quarter, management expects diluted earnings per share of between $3.52 and $3.60, according to guidance presented on the call. This quarterly range includes a benefit of approximately $0.24 per share from tariff refunds, incorporating their contribution into earnings estimates for the coming period as well.