By Harshit, New York, October 26, 2025 8 AM EDT
Earnings Beat Analysts’ Estimates
Footwear maker Deckers Brands reported fiscal Q2 earnings of $1.82 per share, surpassing analysts’ expectations. Despite this positive result, the company’s full-year revenue guidance fell short of Wall Street forecasts, rattling investors and leading to a 15% drop in its stock price in after-hours trading.
While the earnings beat underscores the strength of Deckers’ operations, the company’s guidance revision highlighted rising tariff costs and softer consumer demand, particularly for its top-performing brands, HOKA running shoes and UGG boots.
HOKA and UGG Growth Slows
HOKA, the brand that has been fueling much of Deckers’ growth over the past few years, is now expected to grow in the low-teens percentage range in fiscal 2026, compared with 24% growth last year. Meanwhile, UGG boots, which have consistently been a reliable performer, are projected to expand in the low to mid single-digit range, down from 13% growth in the previous year.
Back in May, Deckers had projected mid-teens growth for HOKA and mid-single digits for UGG, but this forecast was made before the introduction of President Donald Trump’s tariffs on imported goods. CFO Steven Fasching clarified during the earnings call that while the company initially quantified the tariff impact on costs, it is now clear that higher consumer prices are affecting purchasing behavior in discretionary categories.
“Part of the framework we shared at the start of the year assumed tariffs would not significantly impact consumers. While we still believe in the long-term growth potential, we now see some tangible effects on demand in the U.S. market,” Fasching explained.
Tariff Impact and Revenue Guidance
Deckers executives said tariff costs could reach approximately $150 million for the fiscal year. The company plans to offset roughly half of these costs through price adjustments and cost-sharing agreements with manufacturing partners.
The revised fiscal 2026 revenue guidance is $5.35 billion, which is below analysts’ consensus estimate of $5.45 billion, while earnings per share are projected at $6.30–$6.39, roughly in line with the expected $6.32. This indicates that while profit margins are under pressure from tariffs and higher costs, the company remains confident in its ability to maintain earnings growth.
CEO Dave Powers stressed the long-term strength of Deckers’ core brands, noting that both HOKA and UGG continue to capture market share and maintain strong brand recognition. “While tariffs and inflation are creating near-term headwinds, our brands remain leaders in their categories, and we remain confident in our strategic trajectory,” Powers said.
Consumer Behavior and Discretionary Spending
Deckers’ guidance revision underscores a broader trend of cautious consumer spending, particularly in the discretionary footwear segment. As prices rise due to tariffs and inflation, consumers are becoming more selective in their purchases, which has affected demand for premium products like HOKA and UGG.
Fasching highlighted that while full-year growth remains solid, the company is adjusting expectations to reflect current consumer behavior in the face of rising costs. This development is particularly significant as HOKA and UGG account for the majority of Deckers’ total revenue, compensating for weaker performance in other categories.
Market Reaction and Investor Sentiment
Deckers’ shares have fallen over 55% year-to-date, reflecting investor concerns over slowing demand and rising costs. Analysts are monitoring how the company navigates these challenges, especially with tariff-related pressures and cautious consumer sentiment continuing to affect discretionary spending.
The earnings release also sheds light on the broader economic environment, where companies are grappling with trade tensions, inflationary pressures, and shifts in consumer behavior. Deckers’ experience illustrates how even strong brands are vulnerable to geopolitical and economic factors, despite consistent innovation and market leadership.
Looking Ahead
Despite near-term challenges, Deckers remains optimistic about long-term growth. The company is focused on strategic brand development, innovation in footwear technology, and global expansion, particularly for HOKA. Executives also emphasized cost management initiatives to mitigate the effects of tariffs and inflation.
“The fundamental strength of our portfolio is intact,” Powers said. “While we anticipate short-term pressures, we believe HOKA and UGG will continue to drive sustainable growth and maintain leadership in their respective categories.”
Investors will be closely watching Deckers’ performance in the coming quarters to gauge how effectively the company balances tariff pressures, consumer demand, and strategic growth initiatives.