DECKERS Outdoor on Thursday beat Wall Street estimates for first-quarter profit and raised its annual earnings forecast, as demand for its Hoka and UGG footwear brands and growth in its higher-margin direct-to-consumer business boosted profitability.
Shares of the company fell 8 percent in after-market trading after the company raised its fiscal 2027 profit outlook by just 5 cents at the midpoint, while maintaining its annual sales forecast. First-quarter revenue of $1.02 billion was also broadly in line with analysts’ expectations.
New product launches and expansion across both wholesale and direct-to-consumer channels have helped Deckers attract higher-income shoppers who remain willing to spend despite broader economic pressures, allowing it to outperform many discretionary retail peers.
“The company’s ability to increase margins shows that brand desirability remains high,” said eMarketer analyst Rachel Wolff.
Gross margin for the quarter was 56.4 percent, compared to 55.8 percent from last year.
Deckers Outdoor has continued to gain market share in the athletic footwear market, as larger rivals such as Nike grapple with softer demand for legacy sneaker lines including Dunk and Air Jordan.
The company expects earnings per share between $7.35 and $7.50 for fiscal year 2027, compared with its previous forecast of $7.30 to $7.45.
Sales at its Hoka brand rose 7.7 percent during the first quarter, while sales at the UGG brand increased 4.9 percent.
The company’s first-quarter direct-to-consumer net sales increased 8.4 percent compared to 0.5 percent last year.
It earned a quarterly profit of 94 cents per share in the quarter ended June 30, compared with analysts’ estimates of 87 cents per share.
Sales for the quarter increased 5.7 percent to $1.02 billion.
