Deckers UGG Continues to Drive Revenue With International Strength

Deckers Outdoors Corporation DECK highlighted the pivotal role of international markets in sustaining the momentum of its UGG brand. In the second quarter of fiscal 2026, net sales for the UGG brand increased 10.1% year over year, surpassing the company's overall net sales growth of 9.1%. UGG's net sales reached $759.6 million in the fiscal second quarter compared with $689.9 million in the same period last year.

Management emphasized that international regions remained the driving force behind this expansion, with these markets collectively growing 38% year over year for the company's leading brands. This global momentum has been critical in offsetting more tempered performance within the U.S. market.

UGG’s quarterly growth was led by a 17% increase in wholesale, supported by strong demand from retail partners, early demand, and the pull-forward of European shipments ahead of a warehouse transition. This was partly offset by a 10% decline in DTC, reflecting higher wholesale in-stock levels and a tougher U.S. consumer environment favoring multi-brand stores.

Globally, the UGG brand’s revenue rose 12% in the first half, driven by key brand initiatives, strong international growth, faster men’s footwear expansion, and strong consumer response to newer products, including the Mel franchise, which more than doubled across sneaker, chukka, and Chelsea silhouettes. UGG’s Classic Micro emerged as a top-five style across DTC and wholesale. Increased wholesale visibility and shifting consumer behavior pressured DTC, while international markets led growth with strong order book conversion globally.

While the company anticipates a cautious consumer environment in the second half due to pricing and tariff impacts, UGG is expected to deliver low-to mid-single-digit percentage growth for fiscal 2026, reflecting steady brand momentum and a more measured growth profile for the year ahead. Overall, UGG’s accelerating international momentum, strong wholesale demand, and successful product innovation reinforce its role as a key growth driver for Deckers.

DECK Faces Competition From American Eagle & Boot Barn

American Eagle Outfitters, Inc. AEO in the third quarter of fiscal 2025 delivered a total net revenue of $1.36 billion, representing a 6% increase compared with the prior year. American Eagle’s gross profit rose 5% year over year to $552 million from $527 million. However, gross margin declined 40 basis points to 40.5%, indicating modest margin pressure despite higher revenue and profit levels during the period.

Boot Barn Holdings, Inc. BOOT in the second quarter of fiscal 2026, posted net sales growth of 18.7% year over year to $505.4 million from $425.8 million in the prior-year period. Boot Barn’s gross profit increased to $184.1 million, representing 36.4% of net sales, from $152.9 million, or 35.9% in the prior year. The expansion in gross profit was primarily driven by higher sales volumes and improved merchandise margins, highlighting favorable operating leverage during the period.

Zacks Rundown for DECK

Deckers’ shares have gained 1.9% in the past six months compared with the industry’s rise of 17.6%. DECK currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

From a valuation standpoint, DECK trades at a forward price-to-earnings ratio of 15.67, lower than the industry’s average of 18.07.

The Zacks Consensus Estimate for DECK’s current and next fiscal-year earnings implies year-over-year growth of 1.1% and 6.3%, respectively.

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

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