Deckers Outdoor (DECK) earnings could positively surprise over the next 12 months on better-than-expected performance of its lifestyle brands UGG and Hoka, UBS said in a Friday research report.

The company's fiscal 2026 EPS guidance is "very beatable." It could also exceed its sales and gross margin expectations for this year, analysts wrote.

The brokerage modeled Q3 gross margin contraction to 58.5% due to tariff-linked cost pressures and sales of $1.90 billion from $1.98 billion earlier, primarily driven by the HOKA brand due to its new product launches and "brand heat" in global markets. UGG demand in the US could face pressure in Q3 despite robust global trends, according to the note.

For Q3, UBS said it expects UGG sales growth of 1.5% to $1.26 billion, HOKA sales growth of 12.3% to $596 million, and revenue from other brands of $40 million. The brokerage maintained its fiscal 2026, 2027, and 2028 EPS guidance of $6.60, $7.85, and $8.80, respectively.

UBS said it reiterated its buy rating on the stock with a price target of $157 per share.

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