Deckers Brands sinks as weak implied Q4 guide offsets earnings beat, raised view

Deckers Outdoor Corporation (NYSE:DECK) reported better-than-expected third-quarter earnings and revenue on Thursday, but its stock tumbled 15% in Friday’s premarket trading despite raising its full-year guidance.

The footwear company posted adjusted earnings per share of $3.00 for the third quarter of fiscal year 2025, surpassing analyst estimates of $2.46. Revenue climbed 17% YoY to a record $1.83 billion, exceeding the consensus forecast of $1.7 billion.

Deckers raised its full-year 2025 earnings per share guidance to a range of $5.75 to $5.80, above the analyst consensus of $5.64. The company also increased its revenue growth outlook to approximately 15% for the fiscal year.

"Deckers posted exceptional results in the third quarter, delivering record quarterly revenue, gross margin, and earnings," said Stefano Caroti, President and Chief Executive Officer.

"UGG continued to experience incredible global momentum, with the brand’s iconic franchises capturing strong full price consumer demand across all regions."

The company highlighted strong performance from its UGG and HOKA brands. HOKA delivered "impressive results consistent with our strategy, remaining focused on scaling through innovative performance products," Caroti added.

Deckers noted that the increased full-year revenue outlook would mark its fifth consecutive year of mid-teens or higher growth, while maintaining "top-tier levels of operating margin."

According to Barclays (LON:BARC) analysts, the sharp sell-off in Deckers shares despite a strong report comes "as once again we see the nuance of the wholesale business model throwing a wrench into the out quarter."

More concretely, the company’s implied Q4 guidance "is materially lower than consensus," analysts explained, with the upper end of its EPS forecast at $0.46, compared to the market expectation of $0.75. The shortfall is attributed to "significant pressure on gross margin as well as top line sales due to the UGG shift," analysts said.

However, Barclays sees the stock decline "as an opportunity to accumulate and establish positions in one of the most impressive brand growth stories."

Similarly, KeyBanc Capital Markets analysts said they remain positive on the company’s outlook, expecting an upside driven by sustained full-price demand and the upcoming launches of the Bondi 9 and Clifton 10 for HOKA in the coming months.

Senad Karaahmetovic contributed to this report.