Deckers’ Stock Plunges 15% Despite Strong Earnings and Sales Growth
Deckers Outdoor Corporation has faced a turbulent year, with its stock market today price dropping nearly 50% over the past 52 weeks. Despite this decline, the company’s latest financial results showed strong growth in sales and profits. Investors, however, reacted negatively to cautious full-year forecasts, sending shares down further after the report.
Deckers released its Q2 fiscal 2026 earnings, beating expectations with a 9.1% year-on-year rise in net sales and a 14.5% increase in earnings per share. These figures highlight the company’s ability to grow revenue and profitability despite broader market challenges. Yet, the stock market today fell 15% in intraday trading after management provided subdued guidance for the rest of the year.
The company’s two key brands, UGG and HOKA, are encountering difficulties. UGG’s popularity may have peaked, while HOKA’s rapid expansion appears to be nearing saturation. Additional pressures come from rising tariffs and increased competition from rival brands. Over the past year, Deckers’ stock market today has underperformed significantly compared to the S&P 500, which gained 17% in the same period. Despite the recent struggles, analysts remain cautiously optimistic. Out of 24 analysts covering the stock, 10 recommend a 'Buy,' with price targets ranging from $81 to $157. The overall consensus rating stands at 3.83 out of 5, suggesting a 'Moderate Buy.' The average target price of $111.40 implies a modest 3% upside from current levels. Deckers’ current price-to-earnings ratio of 14.9x is considered undervalued compared to its peers, which average 37.6x. Wall Street’s outlook on Deckers’ earnings is mixed. While EPS is expected to dip in Q3, projections for fiscal 2026 and 2027 suggest a recovery. The company’s market capitalisation remains robust at $15.6 billion, reflecting its established position in the footwear market.
Deckers continues to deliver topline growth and improved profitability, even as its stock market today faces volatility. The company’s ability to navigate brand challenges and market pressures will determine its performance in the coming quarters. Analysts’ mixed but generally positive ratings indicate cautious confidence in its long-term prospects.
