Deckers Outdoor's Competitive Edge Eroding As HOKA Slows, Tariffs Mount: Analyst

Deckers Outdoor Corporation DECK shares are trading lower on Friday. Analysts downgraded the stock following fourth-quarter financial results FY25 reported after the market closed on Thursday. 

The company reported fourth-quarter revenue of $1.02 billion, beating analyst estimates of $1.01 billion and earnings of $1 per share, beating analyst estimates of 59 cents per share.

Due to increased uncertainty in the year ahead, Deckers issued F1Q26 guidance instead of its usual full-year guide. The company expects first-quarter revenue of $890 million to $910 million versus estimates of $925.86 million and earnings of 62 cents to 67 cents per share versus estimates of 81 cents per share.

Also Read: UGG, HOKA Parent Deckers Outdoor Issues Soft Q1 Guidance, Holds Back FY26 Outlook Due To ‘Macroeconomic Uncertainty,’ Shares Tumble Despite Bigger Buyback Plans

KeyBanc analyst Ashley Owens downgraded the company from Overweight to Sector Weight.

The analyst’s rating reflects growing concerns around HOKA’s future trajectory, with HOKA’s sales coming in slightly below their forecast and the outlook for the first quarter reflecting a notable slowdown in growth.

Owens cited weaker customer acquisition, broader macroeconomic pressures, and a strategic shift toward wholesale expansion, which may dilute brand momentum as contributing factors. Additionally, recent price increases could dampen consumer demand, said the analyst.

While the analyst recognized Deckers’ solid execution historically, HOKA appears to be losing a competitive edge relative to other high-growth running brands that continue to gain traction.

Owens stated that with high brand awareness in the U.S., they see limited near-term upside. Consequently, the analyst lowered the EPS estimate to 65 cents (from 81 cents prior) for the first quarter of 2026 and $5.87 (from $6.57) for 2026.

Also, Telsey Advisory Group analyst Dana Telsey downgraded the company to Market Perform (from Outperform) and trimmed the price forecast from $240 to $120.

The analyst says that Deckers posted a strong fourth quarter, supported by solid revenue growth, improved gross margins, and disciplined cost control, extending its trend of consistent earnings outperformance.

The analyst adds that HOKA growth decelerated faster than expected, but UGG’s better-than-expected topline offset that slowdown.

The analyst says that the company’s revenue outlook remains uncertain, particularly given the unpredictable consumer response to pricing increases across the retail sector.

Overall, the analyst cited the reason for the downgrade as HOKA and DTC both slowing, margin headwinds from a shift toward wholesale, potential for heavier discounting compared to previous low-promotion years, and added tariff costs, all against broader macro uncertainty.

Price Action: DECK shares are trading lower by 19.9% to $100.94 at last check Friday.

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