Deckers Outdoor (DECK) Stock Forecast & Price Target

Deckers Outdoor demonstrated strong fiscal performance with net sales growing 9.1% year-over-year to $1.431 billion, surpassing market expectations, driven primarily by solid growth in the wholesale channel. The UGG brand, responsible for 53% of the sales in the second quarter, achieved a notable 10.1% increase in sales, reflecting robust demand that outpaced both forecasts and market expectations. Furthermore, the company concluded the fiscal second quarter with a healthy balance sheet, reporting $1.414 billion in cash and cash equivalents with no outstanding debt, positioning it favorably for future growth initiatives.

Deckers Outdoor is expected to face significant financial challenges, with tariffs projected to create a $150 million headwind in fiscal year 2026, which could negatively impact profitability. The company anticipates a decline in operating margins compared to the prior year's record of 23.6%, alongside expectations of flat-line growth for its UGG brand and a slowdown to single-digit growth for Hoka amid tough macroeconomic conditions. Additionally, the decrease in direct-to-consumer revenues by 2.9% year-over-year, coupled with previously forecasted gross margin contraction, suggests ongoing struggles for Deckers in maintaining financial momentum.