Summary of Deckers Brands Q3 2026 Earnings Call

1Key Financial Results and Metrics:

Revenue:: $1.96 billion, a 7% increase year-over-year.

HOKA Revenue:: $629 million, up 18% from the previous year.

UGG Revenue:: $1.3 billion, a 5% increase year-over-year.

Gross Margin:: 59.8%, better than expected due to lower tariff impacts and effective pricing strategies.

Diluted Earnings Per Share (EPS):: $3.33, an 11% increase from $3.00 in the prior year.

SG&A Expenses:: $557 million, up 4%, but as a percentage of revenue, it decreased to 28.5%.

Cash and Equivalents:: $2.1 billion, with inventory at $633 million, reflecting a 10% increase year-over-year.

Share Repurchase:: Approximately $349 million in Q3, with a total of 8 million shares repurchased in the fiscal year.

2Strategic Updates and Business Highlights:

Brand Performance:: Both HOKA and UGG showed strong growth across direct-to-consumer (DTC) and wholesale channels, with UGG achieving its largest quarter ever.

HOKA Membership Program:: Enhanced consumer loyalty and engagement, contributing to improved revenue metrics.

Product Innovation:: Successful launches of new products across both brands, including lifestyle offerings and performance updates.

Marketplace Management:: Effective strategies to maintain high levels of full-price selling and manage inventory cleanly across channels.

3Forward Guidance and Outlook:

Revenue Guidance:: Increased full-year revenue expectations to $5.4 billion to $5.425 billion.

HOKA Growth:: Expected mid-teens revenue growth for HOKA.

UGG Growth:: Anticipated mid-single-digit growth for UGG, at the high end of previous guidance.

Gross Margin Forecast:: Projected at approximately 57%, 100 basis points higher than prior guidance.

EPS Guidance:: Expected to be in the range of $6.80 to $6.85, representing a 7% to 8% increase over the previous year.

4Bad News, Challenges, or Points of Concern:

Tariff Impact:: The estimated unmitigated tariff impact for FY 2026 is approximately $110 million, with a net impact of $25 million expected. This is a concern for future pricing strategies.

Consumer Behavior:: While the brands showed resilience, there remains caution regarding overall consumer spending trends, particularly in the U.S. market.

Koolaburra Phaseout:: The decline in revenue from the Koolaburra brand may impact overall performance metrics.

5Notable Q&A Insights:

Sustainability of HOKA Growth:: Management expressed confidence in the sustainability of HOKA's growth trajectory, attributing it to strategic product launches and improved inventory management.

DTC Performance Drivers:: The positive inflection in DTC for both brands was driven by improved consumer engagement through the HOKA membership program and a cleaner marketplace.

Lifestyle Strategy:: There is a significant opportunity for HOKA to expand into the lifestyle segment, with early positive feedback on new lifestyle products.

Wholesale Channel Dynamics:: Strong performance across various wholesale partners, with specific mention of Journeys and Foot Locker as key contributors.

Future Growth for UGG:: Management anticipates continued growth for UGG in FY 2027, supported by strong consumer demand and effective inventory management strategies. Overall, Deckers Brands reported a strong third quarter with robust growth in both HOKA and UGG, driven by strategic initiatives and effective marketplace management, while also raising its full-year guidance amid some caution regarding consumer behavior and tariff impacts.