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DECKERS OUTDOOR CORP (DECK)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY2026 delivered a clean beat: revenue up 17% to $964.5M and diluted EPS up 24% to $0.93, with outperformance driven by international strength and wholesale reorders; gross margin declined 110 bps to 55.8% on mix, promotions, and freight . Versus S&P Global consensus, revenue beat by ~$64M and EPS beat by ~$0.25, aided by ~$55M shipment timing and stronger HOKA/UGG wholesale demand *.
  • HOKA posted its largest quarter ever ($653.1M) with robust EMEA and China momentum; UGG rose 19% to $265.1M, led by men’s and sandal/sneaker styles, while domestic sales were soft and DTC comps declined 2.2% .
  • Policy/guidance: No full-year outlook due to tariff uncertainty; Q2 FY2026 guidance set at revenue $1.38–$1.42B, EPS $1.50–$1.55, gross margin 53.5–54%, SG&A ~33.5% of revenue; HOKA up ~10% and UGG at least mid-single digits expected for Q2 .
  • Key stock narrative drivers: continued brand momentum (HOKA/UGG), international expansion, DTC reinflection efforts, tariff and price mitigation cadence, and shipment timing normalization. Management emphasized price increases phased from July 1 and into Spring to partially offset tariff headwinds .

What Went Well and What Went Wrong

What Went Well

  • HOKA delivered a “largest quarter in its history,” with revenue +20% YoY to $653M; global wholesale +30% with record reorders in Europe and strong China sell-through .
  • UGG up 19% YoY to $265M; men’s grew nearly 2x brand rate and sandal/sneaker success validates the 365 initiative; wholesale shipments accelerated for fall order books .
  • International strength: companywide international revenue +49.7% YoY to $463.3M, offsetting US softness and underpinning brand share gains .

Management quotes:

  • “HOKA delivered its largest quarter in its history, driving strong sell-throughs during this period of key model transitions.”
  • “UGG products continue to gain relevance during transitional periods… The UGG team executed the first quarter very well.”

What Went Wrong

  • Gross margin down 110 bps to 55.8% on unfavorable channel mix (wholesale > DTC), higher promotions, and elevated freight, partially offset by FX/product mix .
  • DTC pressures: DTC net sales +0.5% YoY but DTC comps -2.2%; US online softness and smaller retail footprint weighed on DTC; retail comps outperformed e-commerce, but scale is limited .
  • Tariff headwinds to intensify: CFO expects FY2026 gross margin lower YoY; unmitigated COGS impact estimated at ~$185M if Vietnam tariffs rise from 10% to 20%, with mitigation from staggered price increases and factory sharing not fully aligned with timing .

Financial Results

Summary vs Prior Periods (trend analysis)

MetricQ3 FY2025Q4 FY2025Q1 FY2026
Revenue ($USD Millions)$1,827.2 $1,021.8 $964.5
Gross Margin %60.3% 56.7% 55.8%
SG&A ($USD Millions)$535.3 $405.8 $372.6
Operating Income ($USD Millions)$567.3 $173.9 $165.3
Diluted EPS ($USD)$3.00 $1.00 $0.93

Actual vs S&P Global Consensus (Q1 FY2026)

MetricActualConsensusSurprise
Revenue ($USD Millions)$964.5 $900.4*+$64.1*
Diluted EPS ($USD)$0.93 $0.68*+$0.25*

Note: Values marked with * retrieved from S&P Global.

Drivers of the beat:

  • ~$55M revenue above high-end Q1 guidance driven by ~$25M earlier HOKA wholesale shipments (EMEA warehousing transition), ~$15M incremental HOKA wholesale reorders, and ~$15M earlier UGG wholesale shipments .
  • Gross margin ~130 bps better than internal expectations on product mix and FX; EPS ~+$0.26 above guidance (performance ~+$0.15 and timing/one-time ~+$0.11) .

Segment/Channel/Geography Breakdown (Q1 FY2026)

CategoryAmount ($USD Millions)Notes
HOKA$653.1 +19.8% YoY
UGG$265.1 +18.9% YoY
Other Brands$46.3 -19.0% YoY
Wholesale$652.4 +26.7% YoY
DTC$312.2 +0.5% YoY; DTC comps -2.2%
Domestic$501.3 -2.8% YoY
International$463.3 +49.7% YoY

KPIs and Balance Sheet (Q1 FY2026)

KPIValueCommentary
DTC Comparable Sales (%)-2.2% US online softness; retail outperforming e-comm
Cash & Equivalents ($USD Billions)$1.720 Strong liquidity; debt-free
Inventories ($USD Millions)$849.4 +13% YoY; channel cleanup underway
Share Repurchases ($USD Millions)$183.0 1.7M shares @ $109.84; $2.4B auth. remaining

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($USD Billions)Q2 FY2026N/A$1.38–$1.42 Introduced
Diluted EPS ($USD)Q2 FY2026N/A$1.50–$1.55 Introduced
Gross Margin (%)Q2 FY2026N/A53.5–54.0 Introduced
SG&A (% of Revenue)Q2 FY2026N/A~33.5% Introduced
HOKA Revenue GrowthQ2 FY2026N/A~10% Introduced
UGG Revenue GrowthQ2 FY2026N/AAt least mid-single digits Introduced
Full-Year FY2026FY2026Withheld (tariff uncertainty) Withheld (tariff uncertainty) Maintained withholding
Q1 FY2026 (for reference)Q1 FY2026Rev $0.89–$0.91B; EPS $0.62–$0.67 Actual Rev $0.965B; EPS $0.93 Beat prior Q1 guide

Earnings Call Themes & Trends

TopicQ3 FY2025 (Prior-2)Q4 FY2025 (Prior-1)Q1 FY2026 (Current)Trend
Tariffs/MacroRaised FY25 revenue/EPS outlook; very strong full-price demand Announced no FY26 full-year guide due to evolving trade policy No full-year guide; Q2 outlook; FY26 GM lower YoY; unmitigated tariff COGS impact ~$185M if VN 20% Rising headwinds; mitigation via pricing/factory sharing
Supply Chain/WarehousingStrong EMEA momentum Normal operations EMEA 3PL transition pulled forward ~$25M shipments to Q1 Timing normalization expected in Q2
Product PerformanceUGG iconic franchises, HOKA scaling; record GM/earnings HOKA +10%; UGG +3.6% in Q4; steady Bondi/Clifton/Arahi upgrades performing; Mafate and Rocket X3 well-received; Mock X3, Skyward Laceless upcoming Sustained innovation pipeline
Channel MixDTC +17.9% in Q3; wholesale +16.2% DTC -1.2%; wholesale +12.3% Wholesale +26.7%; DTC +0.5%; retail > e-comm comps Wholesale-led near term; DTC gradual reinflection
Regional TrendsIntl +28.5% YoY (Q3) Intl +19.9% YoY (Q4) Intl +49.7% YoY (Q1); US down 2.8% Intl driving growth; US choppy
Pricing StrategyStrong full-price selling —Selective/staggered price increases (Jul 1 and Spring) to offset tariffs; no order book impact seen Pricing to partially mitigate cost pressures
Technology/AINot discussedNot discussedNot a focus area this quarterNeutral

Management Commentary

  • “With HOKA and UGG both outperforming the first quarter expectations… revenue growing 17% versus last year to $965 million. Diluted earnings per share increased 24% to $0.93.”
  • “EMEA reported record quarterly wholesale reorders… China has seen significant volume gains… performing well ahead of plan.”
  • “Gross margin came in approximately 130 basis points better than expected… EPS coming in approximately $0.26 above guidance.”
  • “We did not experience a material impact from tariffs in the first quarter… we plan to phase in product price increases over the course of fiscal year 2026.”

Q&A Highlights

  • HOKA channel mix and DTC reinflection: Expect more balanced Q2 growth between wholesale and DTC, with sequential DTC improvement exiting Q1; US DTC was pressured but improved Apr→May→Jun .
  • Inventory cleanup and franchise transitions: Market “largely clean” of Bondi 8 and Clifton 9; Arahi 8 launch showing strong early sell-through across channels .
  • Tariffs and pricing: FY2026 gross margin to face pressure; price increases are selective/staggered across seasons and franchises; order books unchanged post-announcement .
  • Retail vs e-comm: Retail stores significantly outperformed e-commerce comps, consistent with broader consumer preference for in-store full-price purchasing; Deckers’ small retail footprint limits DTC scale impact .
  • International building blocks: Growth outpacing door expansion; record reorders in Europe; strong China; healthy order books into 2H and SS26 .

Estimates Context

  • Q1 FY2026 beat: Revenue $964.5M vs $900.4M consensus; EPS $0.93 vs $0.68 consensus; reflects shipment timing and wholesale reorders plus product/FX favorability *.
  • Q2 FY2026 outlook vs consensus: Guidance revenue $1.38–$1.42B vs consensus ~$1.418B; EPS $1.50–$1.55 vs consensus ~$1.58; gross margin guidance 53.5–54% implies continued pressure vs prior year *.

Note: Values marked with * retrieved from S&P Global.

PeriodMetricCompany OutlookS&P ConsensusDelta
Q2 FY2026Revenue ($USD Billions)$1.38–$1.42 $1.418*Inline to slight low*
Q2 FY2026Diluted EPS ($USD)$1.50–$1.55 $1.58*Slightly below*

Key Takeaways for Investors

  • Beat quality: Q1 revenue/EPS significantly above consensus and internal guide, aided by EMEA 3PL transition timing and wholesale reorders; underlying international demand is strong *.
  • Near-term margin cadence: Expect gross margin pressure in 1H on tariffs, promotions, freight; offsets include selective price increases and mix, but timing mismatch keeps FY2026 GM lower YoY .
  • HOKA engine intact: Franchise upgrades (Bondi/Clifton/Arahi) are resonating; innovation pipeline (Mafate 5 and Rocket X3) supports global momentum and wholesale expansion .
  • UGG broadening relevance: Men’s and sandal/sneaker momentum, targeted campaigns, and lean inventory on key franchises position the brand well into fall .
  • Mix normalization: Wholesale outperformance vs DTC persists in near term; management targets gradual DTC improvement and selective retail expansion (e.g., Berlin/Milan) .
  • Guidance discipline: Quarterly-only guidance amid tariff uncertainty; Q2 outlook is prudent and slightly conservative vs consensus, setting up potential for execution-driven upside *.
  • Capital allocation: Strong cash, debt-free balance sheet, and $2.4B remaining repurchase authorization provide flexibility to invest and return capital; buybacks continued in Q1 .