Deckers Outdoor (DECK), the company renowned for its Hoka and Ugg brands, witnessed a sharp fall in its stock value on Friday. This downturn was triggered by the company's revised financial outlook, which projected figures below market expectations. Executives indicated that an anticipated consumer reluctance to spend, influenced by increased tariffs and rising product costs, would likely impact future sales.
Despite this cautious forecast, Deckers Outdoor reported robust performance for its fiscal second quarter. The company announced earnings per share of $1.82, with a 9.1% year-over-year surge in revenue, reaching $1.43 billion. These figures surpassed analysts' predictions, largely owing to the strong sales momentum of its popular Ugg and Hoka footwear. Specifically, Ugg sales climbed to $759.6 million, marking a 10.1% increase, while Hoka sales rose by 11.1% to $634.1 million. However, sales from other brands within its portfolio saw a decline of 26.5%, settling at $57.2 million.
The company's CEO, Stefano Caroti, highlighted concerns during the earnings call regarding a more hesitant consumer environment, particularly in the U.S., as the full effects of tariffs and price adjustments begin to manifest. CFO Steven Fasching acknowledged these challenges but also noted that strategic measures, including promotional activities, are being considered to mitigate the impact of tariffs and stimulate consumer interest.
This development underscores the delicate balance between market growth and external economic pressures, such as trade policies and inflation. Deckers Outdoor's proactive approach in acknowledging potential headwinds and planning mitigation strategies demonstrates a commitment to navigating a complex economic landscape. It serves as a reminder to investors and businesses alike that foresight and adaptability are crucial for sustained success in an ever-evolving global market.