Deckers stock rating cut to Sector Weight at KeyBanc

On Friday, KeyBanc analysts adjusted their stance on Deckers Outdoor Corporation (NYSE:DECK), downgrading the company’s stock from Overweight to Sector Weight. The decision came after Deckers reported its fourth-quarter earnings, which, although better than anticipated, highlighted several issues that prompted the downgrade. According to InvestingPro data, Deckers maintains strong fundamentals with a perfect Piotroski Score of 9 and impressive revenue growth of 19.5% over the last twelve months.

Ashley Owens from KeyBanc pointed out that the HOKA brand’s sales performance fell short of expectations and that its growth trajectory is decelerating as it enters the first quarter. This slowdown is attributed to a combination of factors, including less effective customer acquisition and broader economic pressures.

Despite Deckers’ successful performance thus far, concerns have arisen around the HOKA brand’s competitive position. It appears to be losing ground to other innovative running brands that are seeing stronger performance. This shift in market dynamics has led to worries over HOKA’s ability to maintain its market share.

Furthermore, the company’s increasing focus on wholesale door growth and the potential negative impact of price increases on demand were also factors in the downgrade. These strategies may not bode well for the brand’s short-term prospects.

With HOKA’s brand awareness already at a high level in the U.S., KeyBanc sees limited near-term upside for Deckers. As a result of these considerations, the firm has revised its estimates for the company’s future performance.

In other recent news, Deckers Outdoor Corporation reported strong financial results for the fourth quarter of 2025. The company achieved earnings per share (EPS) of $1, surpassing the forecasted $0.59, and generated revenue of $1.02 billion, slightly above expectations. For the full fiscal year 2025, Deckers’ revenue reached $4.986 billion, marking a 16% increase year-over-year. Despite these robust earnings, Evercore ISI downgraded Deckers’ stock from Outperform to In Line, significantly lowering the price target from $235 to $110, citing concerns about growth prospects for the UGG and HOKA brands.

The downgrade by Evercore ISI reflects apprehension about deceleration in the company’s key brand growth engines and external pressures such as tariffs and weaker consumer sentiment. Despite these challenges, Deckers has been expanding its international presence, particularly with the HOKA brand, which saw a 24% year-over-year revenue increase to $2.2 billion. The UGG brand also performed well, with a 13% increase in global revenue to $2.5 billion. The company ended the year with $1.9 billion in cash and repurchased $567 million worth of shares.

Looking ahead, Deckers anticipates potential challenges from a $150 million tariff impact in fiscal 2026. The company projects first-quarter revenue to range between $890 million and $910 million, with EPS expected to be between $0.62 and $0.67. Despite the cautious outlook, Deckers remains optimistic about mid-teens growth for the HOKA brand in a normalized environment, while being cautious about U.S. consumer spending.

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