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Investing.com -- Deckers Outdoor Corporation (NYSE:DECK) shares plummeted sharply after the footwear company issued weaker-than-expected guidance for the current quarter, overshadowing better-than-anticipated fourth-quarter results.
The maker of UGG and HOKA brands reported fourth-quarter adjusted earnings per share of $1.00, surpassing the analyst estimate of $0.59. Revenue for the quarter came in at $1.02 billion, slightly above the consensus estimate of $1.01 billion and up 6.5% YoY.
Hoka grew 10% YoY, falling short of the consensus of 14.3%, while UGG grew 3.6%, ahead of the consensus of down 4.9%.
However, Deckers’ outlook for the first quarter of fiscal 2026 disappointed investors. The company expects EPS of $0.62-$0.67, below the consensus of $0.79, and revenue of $890-910 million, short of the $925.3 million analysts were anticipating.
The stock sank more tha 17% in premarket trading Friday following the earnings release, reflecting investor concerns about the weaker guidance.
Following the report, Evercore analysts downgraded Deckers shares to In Line from Outperform.
"We think DECK might be entering a new phase of lower growth profile as we see signs of deceleration across its two key brand growth engines – UGG and HOKA," analysts led by Jesalyn Wong wrote.
"We prefer to remain on the sidelines and wait for positive signals."
KeyBanc Capital Markets also cut its rating on the stock to Sector Perform from Overweight, citing "HOKA’s slowing trajectory, shift toward wholesale door growth, and potential demand erosion from price increases," which lead to elevated concerns despite a better-than-expected quarter.
"With U.S. awareness already high, we see limited near-term upside and lower our estimates accordingly," the broker continued.
For the full fiscal year 2025, Deckers posted record results with revenue increasing 16.3% to $4.99 billion and diluted EPS rising 30% to $6.33.
"Deckers delivered another exceptional year of results in fiscal 2025, highlighted by the HOKA and UGG brands’ respective revenue growth of 24% and 13%, as well as record earnings per share," said Stefano Caroti, President and CEO.
Despite the strong full-year performance, management cited macroeconomic uncertainty related to evolving global trade policies as a reason for not providing full-year guidance for fiscal 2026.
The company also announced an increase in its share repurchase authorization to $2.5 billion, signaling confidence in its long-term prospects despite near-term headwinds.
Luke Juricic contributed to this report.