Can DECK Sustain Momentum in FY26 With HOKA and UGG Leading the Way?

Deckers Outdoor Corporation DECK drove its strong first-quarter fiscal 2026 results through the continued momentum of the flagship brands, HOKA and UGG, which maintained consumer demand by leveraging innovation, disciplined market execution and strategic seasonal initiatives. The company reported revenues of $964.5 million, a 17% year-over-year increase, and earnings per share rose 24% to 93 cents, signaling strong consumer demand.

HOKA remains the primary growth driver, delivering record quarterly revenues of $653.1 million, up 19.8% from the prior-year period. Its success is anchored in global wholesale expansion, strong international demand and the popularity of key franchises like Bondi and Clifton. New product updates, including Arahi 8, have also been met with strong consumer response, reinforcing HOKA’s reputation for innovation.

UGG, meanwhile, posted 18.9% growth to $265.1 million, marking its largest June quarter in history. The brand’s diversification into men’s footwear and year-round styles such as sandals and sneakers reflects the success of its 365 initiative. Strong wholesale momentum and new product launches, like the PeakMod clog, are broadening UGG’s consumer base while maintaining its iconic appeal.

Despite the momentum, challenges loom. Rising tariffs, higher freight costs and increased promotional activity are expected to pressure margins in the second half of the year. Deckers has initiated selective price increases and operational efficiencies to offset these headwinds, though management anticipates a near-term impact on profitability.

Still, Deckers’ disciplined strategy, brand innovation and global expansion provide confidence for another strong year. With HOKA leading performance running and UGG evolving into a versatile lifestyle brand, Deckers is well-positioned to navigate headwinds and continue delivering long-term growth. For fiscal 2026, Deckers anticipates HOKA to remain its fastest-growing brand, with UGG continuing to post gains.

For second-quarter fiscal 2026, net sales are estimated between $1.38 billion and $1.42 billion, with HOKA up 10% and UGG at least in the mid-single digits.

DECK’s Price Performance, Valuation & Estimates

Shares of Deckers have lost 44.8% year to date compared with the industry’s decline of 6.8%.

From a valuation standpoint, DECK trades at a forward price-to-earnings ratio of 17.08X, below the industry’s average of 18.85X. It has a Value Score of A.

The Zacks Consensus Estimate for DECK’s fiscal 2026 earnings implies a flat year-over-year performance, whereas the same for fiscal 2027 indicates an uptick of 7.6%. The estimates for fiscal 2026 and 2027 have been unchanged in the past 30 days.

DECK currently carries a Zacks Rank #2 (Buy).

Other Key Picks

Some other top-ranked stocks are Genesco Inc. GCO, Urban Outfitters Inc. URBN and Tilly's, Inc. TLYS.

Genesco is a Nashville-based specialty retail and branded company that sells footwear and accessories in retail stores. It currently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for GCO’s fiscal 2026 earnings and sales implies growth of 67% and 3%, respectively, from the year-ago actuals. Genesco delivered a trailing four-quarter average earnings surprise of 28.1%.

Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home decor and gift items. It carries a Zacks Rank #2 at present.

The Zacks Consensus Estimate for Urban Outfitters’ current fiscal-year earnings and sales indicates growth of 27.6% and 9.5%, respectively, from the year-ago actuals. URBN delivered a trailing four-quarter average earnings surprise of 24.8%.

Tilly's is a specialty retailer in the action sports industry, selling clothing, shoes and accessories. It has a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for Tilly's current fiscal-year earnings indicates growth of 8.8% from the year-ago actual. TLYS delivered a trailing four-quarter average earnings surprise of 60.7%.

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This article originally published on Zacks Investment Research (zacks.com).

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