By Nate Wolf

Deckers Outdoor ended 2025 on a high note, but that run is set to end in 2026, according to analysts at Piper Sandler.

The firm downgraded shares of the footwear company to Underweight, the equivalent of Sell, from Neutral, cutting its target for the price to $85 from $100. Deckers, which owns the Ugg and Hoka brands, is relying too heavily on promotions to sell shoes directly to consumers, which may cannibalize some of its wholesale businesses, Piper Sandler said.

The stock fell 2.9% to $104.39 on Wednesday. Deckers didn't immediately respond to a request for comment.

After hitting a record closing high of $223.11 on Jan. 30, 2025, Deckers shares plummeted 53% through the rest of the year, making the company one of the worst performers in the S&P 500.

While investors got some hope with a 27% gain across November and December, that optimism may have been misplaced, said Piper Sandler analysts Anna Andreeva and Noah Helfstein in a research note Wednesday. In particular, the pair are worried about the company's use of "promotions as an unhealthy customer acquisition tool."

Hoka began accelerating its discounting last summer to drive demand, with holiday promotions deepening compared with the prior year, Piper Sandler said. The brand has also continued to promote a membership program that includes member-only offers.

"The company has said that the strategy is to acquire a more price sensitive consumer," Andreeva and Helfstein wrote, but this strategy could weigh on wholesale revenue down the line. "Why buy a shoe at Dick's at full price when it's on sale on the [direct] site?" they asked.

Ugg, meanwhile, extended its Cyber Week deals into the first week of December, unlike last year, Piper Sandler said.

The promotions come at a time when sneakers like Hokas may be losing popularity. Citing data from the wholesale platform JOOR, Piper Sandler noted that sneakers accounted for 52% of footwear unit sales globally in 2025, down from 57% in 2023. That drop has also weighed on makers of casual sneakers, such as Adidas.

The discounts might not be so worrisome if Deckers had room to expand its margins, but that would be difficult. Deckers' margin on earnings before interest and taxes is expected to be 21.5% this year, more than double the average for a basket of competitors that includes Adidas, Nike, and On, Piper Sandler said.

Piper Sandler still forecast solid sales growth in fiscal 2026 and 2027. But the analysts think the stock should trade at a lower multiple of earnings than it does today to account for "further EBIT margin reset."

Wall Street is split on the outlook for Deckers stock. Twelve of 27 analysts covering the stock rate it at Buy or the equivalent, while 12 have it at Hold, according to FactSet. Three have it at Sell or the equivalent.

Write to Nate Wolf at nate.wolf@barrons.com

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January 07, 2026 14:11 ET (19:11 GMT)

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