Deckers Brands (DECK) kicked off fiscal 2026 with a powerful rebound, posting stronger-than-expected earnings and revenue for the first quarter.
Deckers Brands delivered a much-needed jolt of optimism with its first-quarter results for fiscal 2026, reporting strong top- and bottom-line beats. Shares surged more than 13% following the release, as the company’s flagship HOKA and UGG brands posted robust global growth. After a rocky start to the year marked by stock declines and cautious guidance, the footwear maker is back in stride.
International Markets Power Explosive Growth for HOKA and UGG
Deckers delivered $965 million in revenue in Q1, a 17% increase from the same period a year ago and far above its previous guidance range of $890 million to $910 million. Central to that surge were its two flagship brands—HOKA and UGG—which each delivered high double-digit growth. HOKA led the charge with a 20% revenue spike to $653 million, marking the largest quarterly performance in its history. UGG followed with an 19% gain, reaching $265 million.
Much of this success came from outside the U.S., as international revenue jumped an eye-catching 50% year-over-year. Deckers attributed this global lift to rising brand awareness and the expansion of company-owned stores, especially in China and across Europe. Wholesale sales increased a robust 27%, bolstered by strong sell-through rates and retailer confidence in the brand’s newest styles, such as the HOKA Arahi 8. While direct-to-consumer sales were mostly flat, the company pointed to improving trends heading into the fall, particularly with refreshed inventory for key franchises like the Bondi and Clifton.
Management emphasized that global demand for both HOKA and UGG remains strong and stable, even in the face of economic uncertainty. HOKA’s selective pricing strategy and focus on innovation helped preserve full-price integrity, while UGG’s expansion into men’s and year-round categories like sandals and sneakers supported broad-based growth.
International Markets Power Explosive Growth for HOKA and UGG
Deckers delivered $965 million in revenue in Q1, a 17% increase from the same period a year ago and far above its previous guidance range of $890 million to $910 million. Central to that surge were its two flagship brands—HOKA and UGG—which each delivered high double-digit growth. HOKA led the charge with a 20% revenue spike to $653 million, marking the largest quarterly performance in its history. UGG followed with an 19% gain, reaching $265 million.
Much of this success came from outside the U.S., as international revenue jumped an eye-catching 50% year-over-year. Deckers attributed this global lift to rising brand awareness and the expansion of company-owned stores, especially in China and across Europe. Wholesale sales increased a robust 27%, bolstered by strong sell-through rates and retailer confidence in the brand’s newest styles, such as the HOKA Arahi 8. While direct-to-consumer sales were mostly flat, the company pointed to improving trends heading into the fall, particularly with refreshed inventory for key franchises like the Bondi and Clifton.
Management emphasized that global demand for both HOKA and UGG remains strong and stable, even in the face of economic uncertainty. HOKA’s selective pricing strategy and focus on innovation helped preserve full-price integrity, while UGG’s expansion into men’s and year-round categories like sandals and sneakers supported broad-based growth.
Tariff Pressures, Margin Watch, and the Balancing Act Ahead
Despite strong revenue growth, Deckers faced challenges on the margin front. Gross margin slipped to 55.8%, down from 56.9% a year ago, impacted by a less favorable channel mix and heavier promotional activity in certain markets. The company also flagged growing pressure from U.S. tariffs, particularly on Vietnamese imports, where many of its products are manufactured. CEO Stefano Caroti warned that if proposed tariff hikes move forward, they could add $185 million in unmitigated cost pressures in fiscal 2026—up from an earlier estimate of $150 million.
In response, Deckers is implementing staggered price increases across select products and regions, a move aimed at defending margins without undermining demand. CFO Steven Fasching noted that early feedback on these price adjustments has been positive, with no meaningful drop in customer orders.
Operating income climbed to $165 million, and net income rose to $139 million, reflecting continued cost discipline even amid rising freight expenses and elevated SG&A outlays. While U.S. demand softened—especially online—Deckers is cautiously optimistic that improving inventory conditions and selective promotions will stabilize domestic performance in the second half of the year.
Investors Welcome Turnaround as Stock Rebounds from Brutal Start to 2025
Deckers' latest results couldn’t have come at a better time. After suffering a nearly 45% drop earlier in 2025—its worst first quarter performance in over a decade—the company was under pressure to restore investor confidence. February’s soft margin outlook and cautious full-year commentary had rattled shareholders and prompted downgrades, but Friday’s report appears to have turned the tide, at least for now.
The company’s $183 million in share repurchases during Q1 also sent a clear signal of confidence from management. With $1.7 billion in cash and equivalents, Deckers has ample firepower to support buybacks and strategic investments, including new store openings in Milan and Germany.
Analysts offered mixed reactions. TD Cowen raised its price target and praised the strength of the HOKA and UGG pipelines into spring 2026. Others, like Seaport Research Partners, noted that much of the Q1 upside came from earlier-than-expected wholesale shipments, and pointed to muted growth in the U.S. and direct channels as reasons for caution.
Nevertheless, the stock’s double-digit surge reflects investor relief. Deckers not only beat expectations—it delivered clarity on near-term strategy, affirmed its pricing power, and emphasized the strength of its core brands. The second quarter outlook of $1.38 to $1.42 billion in revenue and $1.50 to $1.55 in EPS was in line with forecasts, helping to ease concerns of further downside guidance.
Conclusion
Deckers' first-quarter results offered a rare bright spot in an uncertain retail environment, powered by global momentum in its two most important brands. While U.S. demand and rising tariffs present ongoing risks, the company’s diversified channel mix, strong international growth, and prudent capital management suggest a path forward. If HOKA and UGG can sustain their current pace and the company continues to navigate macro headwinds effectively, Deckers may be poised to rebuild investor trust and reclaim its leadership position in the sector.
Deckers' latest results couldn’t have come at a better time. After suffering a nearly 45% drop earlier in 2025—its worst first quarter performance in over a decade—the company was under pressure to restore investor confidence. February’s soft margin outlook and cautious full-year commentary had rattled shareholders and prompted downgrades, but Friday’s report appears to have turned the tide, at least for now.
The company’s $183 million in share repurchases during Q1 also sent a clear signal of confidence from management. With $1.7 billion in cash and equivalents, Deckers has ample firepower to support buybacks and strategic investments, including new store openings in Milan and Germany.
Analysts offered mixed reactions. TD Cowen raised its price target and praised the strength of the HOKA and UGG pipelines into spring 2026. Others, like Seaport Research Partners, noted that much of the Q1 upside came from earlier-than-expected wholesale shipments, and pointed to muted growth in the U.S. and direct channels as reasons for caution.
Nevertheless, the stock’s double-digit surge reflects investor relief. Deckers not only beat expectations—it delivered clarity on near-term strategy, affirmed its pricing power, and emphasized the strength of its core brands. The second quarter outlook of $1.38 to $1.42 billion in revenue and $1.50 to $1.55 in EPS was in line with forecasts, helping to ease concerns of further downside guidance.
Conclusion
Deckers' first-quarter results offered a rare bright spot in an uncertain retail environment, powered by global momentum in its two most important brands. While U.S. demand and rising tariffs present ongoing risks, the company’s diversified channel mix, strong international growth, and prudent capital management suggest a path forward. If HOKA and UGG can sustain their current pace and the company continues to navigate macro headwinds effectively, Deckers may be poised to rebuild investor trust and reclaim its leadership position in the sector.
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