Deckers Outdoor Corporation reported a cautious consumer environment has led to softer sales growth, prompting the company to lower its revenue outlook for the year while maintaining a disciplined pricing strategy. The footwear maker, known for brands such as Hoka and Ugg, said it will continue to avoid discounting despite increased demand for promotions across the sneaker market.
During a call with analysts on Thursday, CEO Stefano Caro emphasized the company’s commitment to full-price selling, stating that Deckers will “compete aggressively” but is steering clear of “the race to the bottom” on pricing. He noted the importance of preserving brand value by keeping inventories tight and focusing on organic growth rather than markdowns.
Shares of Deckers fell 7% in after-hours trading following the announcement. The company now projects full-year sales between $5.7 billion and $5.73 billion, down from its previous forecast of $5.86 billion to $5.91 billion. The lowered guidance reflects slower sales in both the Hoka and Ugg lines, key drivers of the company’s revenue.
Deckers reported quarterly revenue of $1.48 billion, a 3.5% increase compared with the prior year but below analyst projections of $1.5 billion. Hoka sales grew 7% to $677.2 million, while Ugg revenue reached $786.4 million; both figures falling short of Wall Street estimates. The company’s direct-to-consumer segment accounted for 18% of sales, with wholesale revenues rising.
Net income for the quarter rose to $313.1 million, or $2.31 per share, up from $268.2 million, or $1.82 per share, a year earlier and exceeding analyst expectations of $1.79 per share.
Deckers highlighted challenges in the broader sneaker industry, which continues to grapple with excess inventory in casual lifestyle footwear. Competitors such as Foot Locker and Nike have responded by increasing discounts, creating pressure across the market. Deckers executives pointed to a shifting consumer trend in which performance sneakers like Hoka are increasingly worn as everyday casual shoes, blurring the line between performance and lifestyle segments and complicating promotional dynamics.
Rather than relying on markdowns, Deckers plans to invest more in marketing initiatives and the development of new styles to sustain brand appeal and defend against the erosion of pricing power. Caro cautioned against a heavy promotional environment across multiple franchises, underscoring a preference to “stay clean” on pricing and bolster the company’s positioning within the lifestyle segment.
Despite the sales slowdown, Deckers raised its full-year earnings per share guidance to a range of $7.80 to $7.95, up from an earlier estimate of $7.35 to $7.50. This adjustment largely reflects a $0.52 per share benefit from tariff refunds net of tax expected to contribute to the company’s financial results.