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DECKERS OUTDOOR CORP (DECK)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 delivered solid top-line and profitability: revenue +6.5% YoY to $1.022B, gross margin +50 bps to 56.7%, and diluted EPS $1.00, driven by HOKA +10% and UGG +3.6%; international +19.9% offset flat domestic and DTC softness .
  • DECK beat Wall Street consensus on both revenue and EPS for Q4 (see Estimates Context); management cited wholesale-led growth and strong HOKA franchise refreshes as catalysts, while noting selective promotions and model transitions weighed on DTC comps in the U.S. .
  • No FY2026 full-year guidance due to tariff-related uncertainty; provided Q1 FY2026 outlook (revenue $890–$910m, EPS $0.62–$0.67) and flagged ~250 bps YoY gross margin headwind in Q1 from freight, mix, and normalized promotions .
  • Capital return stepped up: authorization increased by $2.25B to ~$2.5B total; DECK repurchased ~$266m in Q4 and an additional ~$84m through May 9, supported by $1.889B cash and no debt—reinforcing downside support amid macro volatility .

What Went Well and What Went Wrong

What Went Well

  • HOKA and UGG continued to grow with brand health intact: Q4 HOKA +10% to $586.1m; UGG +3.6% to $374.3m; wholesale +12.3%, international +19.9%, and GM +50 bps to 56.7% as pricing power and mix offset headwinds .
  • Management confidence in brand equity and long-term strategy: “We view [HOKA and UGG] as industry leaders… Alongside Deckers’ superb balance sheet, this positions us well to manage through the near-term with a focus on the long-term.” — CEO Stefano Caroti .
  • Balance sheet and capital returns: $1.889B cash, no debt, and authorization raised to ~$2.5B; buybacks of 1.778M shares in Q4 ($266m) and 765k shares in Q1 FY26-to-date ($84m) .

What Went Wrong

  • U.S. HOKA DTC softness and DTC comp decline: DTC -1.2% YoY in Q4 and DTC comp -1.6%, as consumers tried upgraded models in-store (benefiting wholesale) and promotions on outgoing models weighed on e-commerce .
  • Tariff and freight headwinds to FY2026: up to ~$150m gross COGS impact contemplated; even with selective price increases and factory cost sharing, management expects partial absorption and potential demand erosion; no FY26 full-year guide .
  • Near-term margin pressure: management guided Q1 FY2026 gross margin down ~250 bps YoY; Q4 commentary also emphasized freight and FX headwinds and a more normalized promotional environment vs unusually benign prior-year comps .

Financial Results

Consolidated performance vs prior quarters

MetricQ2 FY2025Q3 FY2025Q4 FY2025
Revenue ($USD Millions)$1,311.3 $1,827.2 $1,021.8
Gross Margin %55.9% 60.3% 56.7%
Operating Income ($USD Millions)$305.1 $567.3 $173.9
Diluted EPS ($)$1.59 $3.00 $1.00

Q4 FY2025 actuals vs S&P Global consensus

MetricConsensusActualSurprise
Revenue ($USD Millions)$1,005.9*$1,021.8 +$15.9 (+1.6%); Beat
Diluted EPS ($)$0.60*$1.00 +$0.40 (+67%); Beat

Values with an asterisk were retrieved from S&P Global.

Q4 FY2025 brand mix, channel, and geography

BreakdownQ4 FY2024Q4 FY2025YoY
UGG Net Sales ($m)$361.3 $374.3 +3.6%
HOKA Net Sales ($m)$533.0 $586.1 +10.0%
Other Brands Net Sales ($m)$65.5 $61.3 -6.3%
Wholesale Net Sales ($m)$544.6 $611.6 +12.3%
DTC Net Sales ($m)$415.2 $410.2 -1.2%
DTC Comparable Sales %—-1.6% —
Domestic Net Sales ($m)$647.7 $647.7 Flat
International Net Sales ($m)$312.0 $374.1 +19.9%

KPIs and Capital

KPIQ4 FY2025
Cash & Cash Equivalents$1.889B
Inventories$495.2M
Share Repurchase (Q4)~$266.0M at ~$149.62 avg px
Share Repurchase (Q1 FY26 to 5/9)~$84.0M at ~$109.75 avg px
AuthorizationIncreased by $2.25B to ~$2.5B total

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net SalesQ1 FY2026N/A$890–$910M New
Diluted EPSQ1 FY2026N/A$0.62–$0.67 New
Gross MarginQ1 FY2026N/ADown ~250 bps YoY New
SG&AQ1 FY2026N/ATo grow slightly faster than revenue New
Full-year GuidanceFY2026None previouslyNot providing due to tariff uncertainty Maintained (no FY guide)
Capital ReturnOngoingPrior authorizationAuthorization increased to ~$2.5B total Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Tariffs/MacroQ2: Tariffs not in guidance; monitoring pre-election . Q3: cautioned on promotions/FX headwinds .Up to ~$150m gross COGS headwind; plan selective U.S. price increases and vendor cost sharing; still expect partial absorption and potential demand erosion; no FY26 guide .Deteriorating near term; mitigation plans in place.
Channel Mix (Wholesale vs DTC)Q2: Balanced growth; earlier shipments . Q3: Wholesale door expansion and strong sell-through; inventory timing aided UGG in Q3 .Wholesale led Q4; U.S. DTC softness from model changeovers and try-on behavior; long-term 50/50 goal reiterated .Wholesale gaining near term; DTC expected to improve post-Q1.
International ExpansionQ2: International outpacing U.S.; target 50/50 over time . Q3: Strong EMEA/China; broader global activations .HOKA international 34% of revenue; Shanghai flagship “Experience Center”; EMEA and China key growth drivers .Strengthening; international mix rising.
Product Pipeline/RefreshQ2: Skyflow, Mach X2, trail innovations; cold-weather Kaha Frost . Q3: Bondi 9 (Jan), Cielo X1 2.0 (Feb), Clifton 10 (Apr) .Arahi 8 redesign; Rocket X 3; Mafate X; strong franchise upgrades driving demand .Robust cadence; supporting awareness and pricing power.
Gross Margin DriversQ2: GM +250 bps on mix; freight headwinds starting . Q3: GM 60.3%; cautioned unsustainably high full-price levels; FX benefit .Q4 GM 56.7%; Q1 FY26 GM expected -~250 bps YoY on freight, promotions, channel mix; partial offsets via pricing and vendor sharing .Normalizing down from peak; still healthy.
Inventory/Supply ChainQ2: Earlier wholesale shipments; demand strong . Q3: Earlier UGG inventory drove Q3 outperformance; scarcity model maintained .Pulling forward inventory ahead of tariff timing; EU DC transition mitigation; inventory lean/tight .Proactive; supports service levels.
Capital Allocation/BoardQ3: ~$641m remaining authorization .Authorization raised to ~$2.5B; Q4/Q1 FY26 buybacks; Board Chair transition to Cindy Davis .Increased flexibility; governance refresh.

Management Commentary

  • “Deckers delivered another exceptional year… HOKA and UGG brands’ respective revenue growth of 24% and 13%… record earnings per share.” — Stefano Caroti, CEO .
  • “We expect to face an increase of up to $150 million to our cost of goods sold in fiscal year 2026… we are assessing strategic, selective and staggered [U.S.] price increases and negotiating cost sharing… we expect to absorb a portion of the tariff impact.” — Steve Fasching, CFO .
  • “For the first quarter of fiscal year 2026, we expect revenue to be in the range of $890 million to $910 million… EPS $0.62 to $0.67… gross margin down ~250 bps YoY.” — Steve Fasching, CFO .
  • “We are very, very selective [on HOKA distribution]… long-term aim is a 50-50 split between DTC and wholesale.” — Stefano Caroti; Steve Fasching .

Q&A Highlights

  • HOKA U.S. DTC softness: Management cited model changeovers, promotions on outgoing models, and consumer preference to try on new models in-store; expects DTC trends to improve after Q1 .
  • Tariffs and mitigation: $150m gross impact is a “gross number”; company expects to recapture “maybe up to half” via price and vendor sharing, but will absorb some costs .
  • Q1 FY2026 framing: Tariffs included; no price increases embedded yet; guides GM down ~250 bps YoY; EPS $0.62–$0.67 vs last year’s restated $0.75 .
  • Inventory strategy: Intentionally elevated into Q1 to get ahead of tariff timing and support a European DC transition; inventories otherwise lean/tight .
  • Wholesale expansion: Continues selectively across specialty, sporting goods, and key international partners; door productivity and turns remain decision criteria .

Estimates Context

PeriodRevenue Consensus ($m)Revenue Actual ($m)EPS Consensus ($)EPS Actual ($)
Q2 FY20251,202.97*1,311.32*1.239*1.59*
Q3 FY20251,734.20*1,827.17*2.594*3.00*
Q4 FY20251,005.93*1,021.78*0.599*1.00*

Values with an asterisk were retrieved from S&P Global.

Implications: DECK beat revenue and EPS in each of the last three quarters versus S&P Global consensus, with the largest relative beat in Q4 EPS as wholesale strength and mix offset DTC softness and promotions .

Key Takeaways for Investors

  • Near-term: Expect Q1 FY2026 margin pressure (GM -~250 bps YoY) from freight/promo/channel mix and tariff inclusion; DECK still targets selective price actions and vendor sharing thereafter .
  • Tariff risk is manageable but not immaterial: Up to ~$150m COGS headwind contemplated; management expects partial recovery up to “maybe half,” with potential U.S. demand elasticity to monitor as pricing actions phase in .
  • Wholesale-led growth durable: Model refreshes (Bondi 9, Clifton 10, Arahi 8) and try-on behavior support wholesale; DTC should reaccelerate post-Q1 as product transitions complete .
  • International momentum is a structural tailwind: EMEA and China accelerating; HOKA international mix at ~34% with new Shanghai flagship experience center; pathway to higher international mix supports multi-year growth .
  • Capital return provides downside support: $2.5B authorization and $1.889B cash with no debt position DECK to be opportunistic through macro volatility .
  • Brand equity intact: Scarcity model, premium mix, and innovation cadence underpin top-tier gross margins even as they normalize from peak levels .
  • Watch list: pace of U.S. DTC recovery, freight normalization, tariff policy trajectory, and cadence of selective U.S. price increases versus demand.

Notes:

  • DECK changed reportable segments in Q4 FY2025 to brand-level (UGG, HOKA, Other), aligning reporting with management’s evaluation approach .
  • Conference call and press release figures are GAAP; selected non-GAAP constructs (constant currency, DTC comps) are defined by the company .