MW Ugg and Hoka sales fall in the U.S. as Americans change the way they shop
By Steve Gelsi
Deckers Outdoors warns of soft direct-to-consumer sales because shoppers are shifting to 'multibrand in-store shopping experiences'
Deckers expects to be navigating a more cautious consumer environment this holiday season.
Deckers Outdoor Corp.'s stock fell to a two-year low Friday after the maker of Ugg boots and Hoka running shoes provided a disappointing full-year outlook as sales in the U.S., its biggest market, continued to decline.
The problem the company (DECK) is having is that consumer sentiment is still pressured, and Americans have become more discerning in how they spend their money because of worries about the economy and the potentially inflationary impacts of tariffs. There has also been a change in shopper behavior, which has hurt direct-to-consumer business among the company's brands, which also include Teva.
As U.S. consumers deal with "a more challenging macroeconomic environment" and higher prices, there has been a shift in consumer preferences toward "multibrand, in-store shopping experiences," said Chief Financial Officer Steve Fasching, according to a FactSet transcript of a post-earnings-report conference call with analysts.
There is also a concern that shoppers will become even more discerning in the coming months, including over the holidays, which could hurt sales for the second half of the fiscal year as prices continue to rise.
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"We are anticipating a more cautious consumer as the full impact of tariffs and price increases will be felt here in the U.S.," Deckers Chief Executive Stefano Caroti said on the company's second-quarter conference call with analysts, according to a FactSet transcript.
The company, which didn't provided full-year sales guidance when it reported first-fiscal-quarter results in July, said Thursday in its second-quarter report that fiscal 2026 net sales were expected to be about $5.35 billion. That was below the $5.38 billion average analyst estimate compiled by FactSet.
The company also projects full-year earnings of $6.30 to $6.39 a share, against a FactSet consensus of $6.39 a share.
"As U.S. consumers are beginning to see some price increases, it is impacting their purchase behavior within the consumer discretionary space," said CFO Fasching.
The stock tumbled 12.8% by midday, enough to pace the S&P 500 index's SPX decliners on the day. It was also on track for its lowest close since Oct. 26, 2023.
Among the key numbers reported for the second fiscal quarter, which ended Sept. 30, Deckers said domestic net sales retreated by 1.7% from a year earlier to $839.5 million, while international net sales jumped 29.3% to $591.3 million.
And direct-to-consumer, or DTC, sales fell 0.8% to $394.6 million. Hoka DTC sales were up 8%, but that was driven by international growth, while Ugg DTC sales fell 10%.
The company's second-quarter profit increased to $277.13 million, or $1.82 a share, from $253.1 million, or $1.59 a share, in the year-ago quarter. The company handily beat the FactSet consensus earnings estimate of $1.58 a share.
Sales rose by 9.1% to $1.43 billion, just ahead of the analyst estimate, which pegged quarterly revenue at $1.42 billion.
Jefferies analyst Ashley Helgans said Deckers missed her second-quarter targets for Ugg sales and direct-to-consumer sales. "We view the direct-to-consumer slowdown as disappointing to investors given expectations for ... improvement," said Helgans.
Reduced Ugg sales momentum could force the company to cut prices, she said.
Including Friday's moves, Deckers shares have fallen 56% in 2025, while the benchmark S&P 500 SPX has risen 15.7%.
-Steve Gelsi
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October 24, 2025 13:38 ET (17:38 GMT)
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