Deckers' Surprise Blowout Has Wall Street Repricing the Story

Investors have been waiting for that blowout earnings report. It just might have come in a place they weren’t expecting. Deckers Outdoor Corp. (NYSE: DECK) stock surged 14.2% in after-hours trading after the company posted record numbers on the top and bottom lines in its third-quarter earnings report for fiscal year 2026 (FY2026).

That gain ate up every bit of the upside that is in the company’s consensus price target. But that target is likely to move higher. That’s because of Deckers' guidance.

The footwear and apparel conglomerate raised its full-year guidance for both earnings per share (EPS) and net sales. In terms of EPS, the company now expects fiscal year 2026 EPS to be between $6.80 and $6.85 per share. That’s higher than the company’s prior guidance of $6.30 and $6.39 per share. It's also above analysts’ consensus forecast for $6.41.

The same story held for net sales. Deckers now estimates net sales between $5.40 billion and $5.425 billion, above its prior guidance of $5.35 billion and analysts’ estimates of $5.36 billion.

HOKA and UGG Lead the Way

The company’s impressive results underscore resilient global demand for the company’s HOKA and UGG brands. HOKA posted high‑teens growth in the quarter with approximately $629 million in revenue. Net sales for the UGG brand increased 4.9% to $1.305 billion, above estimates for $1.244 billion.

These results confirm that Deckers is still gaining share in performance footwear and maintaining pricing power in its core lifestyle franchise, even as the broader consumer backdrop, evident in many retail stocks, remains uneven. That combination of top‑line growth plus expanding or at least stable margins is exactly what investors want to see heading into a potentially more volatile macro environment.

Analysts May Be Reluctant Bulls

Despite Deckers' strong beat‑and‑raise quarter, analysts are likely to remain more cautious than the fundamentals alone would suggest. There are a few reasons for that. The sustainability of growth at HOKA’s current scale, a more normalized UGG trajectory after years of outsized demand, and the fact that the valuation already embeds significant past execution.

Plus, while the company’s forward guidance is higher, it’s not explosive. EPS growth in the high single digits off a record base is solid, but not the kind of acceleration that forces a rerating on its own. At the same time, management is clear that it will continue to invest in marketing, distribution, and product innovation, which means that some operating leverage is deliberately being reinvested rather than maximized in the near term. 

In short, analysts don’t dislike Deckers; they simply see a high‑quality compounder facing law‑of‑large‑numbers realities and macro uncertainty, limiting multiple expansion absent a clear, new upside narrative. That’s the context in which tariff policy, and specifically developments tied to the International Emergency Economic Powers Act (IEEPA), have become such a focal talking point.

Tariffs: A Real Headwind, But Also a Noisy Catalyst

On the conference call, Deckers management quantified the tariff impact at roughly $110 million for FY2026. The company also said that Q3 represented the largest quarterly tariff hit on a rate basis, with the full 20% burden expected in Q4.

Despite this, gross margin was 59.8%, just below the forecast of 60.3%. That was driven by strong pricing power and a favorable mix, suggesting that the brands have been able to pass on a meaningful portion of higher costs without materially denting demand. 

So what happens if the U.S. Supreme Court strikes down or rolls back the IEEPA-related tariffs? The most direct impact would be margin relief and potentially faster EPS growth than the current 7–8% guidance implies. That could support estimate revisions and might give the Street more confidence that mid‑teens EPS growth is achievable again without relying solely on volume gains. 

However, this cuts both ways. Management’s comments also imply that Deckers is already absorbing and managing a substantial tariff burden while still beating expectations and raising guidance. That means the bull case doesn’t require a favorable tariff outcome to work. Instead, any IEEPA relief would be incremental upside rather than the core reason to own DECK stock.

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