DECK · Q1 2026 Earnings

Cautious

Deckers Brands

Reported July 24, 2025

30-second summary

Q1 revenue grew 16.9% to $964.5M, blowing past the $890–910M guide by $54–75M, with HOKA +19.8%, UGG +18.9%, and gross margin landing at 55.8% versus a feared ~250bps decline. But management raised the unmitigated tariff exposure to $185M (from $150M last quarter), kept the FY26 outlook withdrawn, and guided Q2 to a gross margin of 53.5–54% with HOKA decelerating to ~10%. The print is a beat the market should respect; the forward setup is meaningfully worse than three months ago.

Headline numbers

EPS

Q1 FY2026

$0.93

Revenue

Q1 FY2026

$0.96B

+16.9% YoY

Gross margin

Q1 FY2026

55.8%

Operating margin

Q1 FY2026

17.1%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$0.96B	+16.9%	$1.02B	-5.6%
EPS	$0.93	—	$1.00	-7.0%
Gross margin	55.8%	—	56.7%	-90bps
Operating margin	17.1%	—	17.0%	+10bps

Guidance

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q1 FY2026	$890M to $910M	$964.5M	+$54.5M to $74.5M above guide	Beat
Diluted EPS (GAAP)	Q1 FY2026	$0.62 to $0.67	$0.93	+$0.26 to $0.31 above guide	Beat
Gross Margin	Q1 FY2026	down approximately 250 basis points YoY	55.8%	Margin compression was substantially less than the ~250bps expected	Beat
HOKA Revenue Growth	Q1 FY2026	at least low double digits	+19.8%	+9.8pts above low double digit threshold	Beat
UGG Revenue Growth	Q1 FY2026	at least mid single digits	+18.9%	+13.9pts above mid single digit threshold	Beat

New guidance

Metric	Period	Guide	YoY
Revenue	Q2 FY2026	$1.38B to $1.42B	—
Diluted EPS (GAAP)	Q2 FY2026	$1.50 to $1.55	—
Gross Margin	Q2 FY2026	53.5% to 54%	—
SG&A as % of Revenue	Q2 FY2026	approximately 33.5%	—
HOKA Revenue Growth	Q2 FY2026	approximately 10%	—
UGG Revenue Growth	Q2 FY2026	at least mid-single digits	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
FY2026 Guidance	FY 2026	Not providing formal outlook due to macroeconomic uncertainty related to global trade policy	Withdrawn — no replacement	—	Withdrawn

Segment performance

Q1 FY2026

Segment	Q1 FY2026	YoY
HOKA	$0.653B	+19.8%
UGG	$0.265B	+18.9%
Other brands	$0.046B	-19.0%
Wholesale	$0.652B	+26.7%
DTC	$0.312B	+0.5%

Platform metrics

Q1 FY2026

Segment	Q1 FY2026
DTC Comparable Net Sales Growth	-2.2%
Constant Currency Revenue Growth	16.3%

Profitability

Q1 FY2026

Segment	Q1 FY2026
Operating Margin	17.1%

Other KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
Domestic	$0.501B	-2.8%
International	$0.463B	+49.7%

Management tone

Q3 25: confident multi-year framework → Q4 25: FY26 guide withdrawn, tariffs flagged at $150M → Q1 26: tariff exposure escalates to $185M, internal execution issues admitted, FY26 still withheld.

The tariff exposure was upsized, not contained. Last quarter management framed $150M as the unmitigated number with up to ~50% recoverable via pricing and vendor sharing. This quarter the unmitigated figure was lifted to $185M with a specific Vietnam 10%→20% assumption: "we would expect to face a total of $185 million of unmitigated impact to our cost of goods sold in fiscal year 2026, up from our previously provided estimate of up to $150 million." The fact that the worst-case got worse — not better — three months into the regime is the single most important forward signal, and it explains why the FY26 guide remains withheld.

HOKA execution issues moved from external to internal framing. Last quarter the HOKA DTC slowdown was attributed to model changeovers and wholesale cannibalization — external mechanics. This quarter, management explicitly owned the problem: "Recognizing some of the execution challenges we've faced over the last six months, we're implementing changes that include adjusting product life cycles… tightening marketplace inventory targets." Admitting internal missteps is a posture shift; the corrective playbook (spacing launches, aligning to commercial moments, tighter outgoing-style inventory) is concrete but is also a tacit concession that the franchise refresh cadence was mismanaged.

Operating margin compression is now explicitly underwritten by management. Last quarter the FY25 23.6% operating margin was framed as a record under "exceptionally low promotional activity." This quarter management said the quiet part out loud: "this should lead us to a lower operating margin relative to our record 23.6% delivered in fiscal year 2025… we may deliver a short-term increase in our SG&A expense ratio to revenue." Trading near-term margin for brand/distribution investment is a defensible posture, but it removes any near-term floor on margins and reframes 23.6% as a cyclical peak rather than a baseline.

DTC framing has flipped. Three months ago the language was about US DTC weakness being transitory and international DTC carrying the brand. This quarter management pre-emptively guided that "wholesale [will] outpace DTC in the near term" — institutionalizing the channel reversal rather than treating it as a temporary mix wobble. For a brand whose long-term thesis depends on DTC mix expansion, this is a quietly significant retreat.

Recurring themes management leaned on this quarter:

Tariff headwind escalation and mitigation strategyInternational growth outpacing U.S. consumer weaknessWholesale channel strength vs DTC pressureProduct execution refinements and franchise optimizationBrand innovation and market share gainsOperating margin compression from multiple headwinds

Risks management surfaced:

Macroeconomic uncertainty and global trade policy impactsU.S. consumer sentiment weakness and purchasing behavior changesHigher promotional activity required across brandsTariff cost escalation beyond current mitigation capacityForeign currency exchange rate volatility

Q&A highlights

Jay Sol · UBS

Asked about Q2 HOKA 10% guidance, wholesale vs DTC channel performance, inventory cleanup status of Bondi 8 and Clifton 9, and product innovation pipeline including Mafate 5, Mach X3, and spring 2026 franchise upgrades.

Management confirmed mid-teens growth for H1 after adjusting for international wholesale timing, expects more balanced channel growth in Q2 with DTC improvement, confirmed Bondi 8 and Clifton 9 inventory largely cleared with strong Arahi 8 performance, detailed upcoming launches including Mafate 5 in August with strong bookings and spring 2026 upgrades to Mach 7, Gaviota, and Speedgoat franchises.

Mid-teen growth expected for H1 after adjusting for Q1 wholesale timingArahi 8 launched July 1st with positive early read from specialty retailers and DTCMafate 5 launching in August with strong bookingsSpring 2026 will see upgrades to franchises ranked 4, 5, 6 (Mach 7, Gaviota, Speedgoat) with strong bookings

Laurent · BNP Paribas

Clarified HOKA balanced growth assumptions between wholesale and DTC for Q2, asked about US DTC reacceleration and long-term store expansion strategy, and questioned whether mid-teens HOKA and mid-singles UGG frameworks remain intact despite tariff uncertainty.

Confirmed balanced growth with improvement anticipated in US DTC following April lows, noted 48 owner-operated stores with new stores opening in Berlin and Milan under new retail head Jessica Boro, confirmed original framework of mid-teens HOKA and mid-singles UGG growth still intact with increased confidence from Q1 performance, indicated will reinstate guidance when tariff details clarify and consumer reaction becomes visible.

HOKA stores expanded to 48 owner-operated locationsNew stores opening in Berlin and Milan plannedNew global head of retail Jessica Boro hiredMid-teens HOKA and mid-singles UGG framework maintained

Adrienne Yee · Barclays

Asked about selective pricing strategy including percentage of product receiving increases in fall and spring, and whether back-half margins could expand as pricing becomes more effective.

Management indicated selective and staggered pricing approach with some increases taken in July and more planned for spring, noted pricing varies by brand, franchise, and price point, confirmed approximately $5 increases on certain fall products, emphasized gross margin pressure will continue in back-half driven by tariffs hitting before full-year pricing offsets are realized.

Approximately $5 price increases on select fall productsTariff estimated at $150 million initially, split with $75M from supplier negotiations and $75M from staggered price increasesPrice increases applied to both new and existing modelsBack-half will see more margin pressure from tariffs, not expansion

Jonathan Komp · Baird

Asked about capabilities enhancement and learnings driving focus on franchise development, and asked about minimum cash requirements and board's perspective on buyback strategy.

Management outlined key learnings: spacing key style launches further apart, better alignment with commercial moments, tightening inventory of outgoing styles, and creating more segmentation and DTC differentiation as assortment expands. On capital allocation, confirmed healthy cash position enables share repurchase where valuation is underappreciated.

Key learnings: spacing launches further apart, aligning flow with commercial moments, tightening outgoing inventoryEnhanced capabilities in innovation, design, color, engineering to maintain competitive leadershipIncreased share repurchase authorization with stepped-up activity in recent quartersView that current stock valuation doesn't reflect business quality

Rick Patel · Raymond James

Asked about HOKA international growth drivers (organic vs distribution expansion vs productivity) and forward outlook, and clarified SG&A spending priorities and controls.

Confirmed revenue growth outpacing door expansion with sell-through exceeding sell-in internationally, detailed strong performance in Europe with record reorders and robust China business, noted healthy order books for H2 and spring 2026. On SG&A, emphasized controlled investment approach prioritizing global brand awareness, marketing localization, HOKA brand capabilities, distribution and warehouse improvements, and IT investments proportional to business growth.

Record reorders received in Europe in Q1China business performing stronglyRevenue growth outpacing door expansionIncreased marketing investment in global campaigns and localized content

Answers to last quarter's watch list

Whether HOKA US DTC comparable sales return to growth in Q1 FY2026. DTC comparable net sales declined 2.2% and domestic revenue was -2.8%; HOKA-specific DTC was not broken out but management's framing — "ongoing pressure in the U.S. online channel as previously forecasted" and an explicit guide that wholesale will outpace DTC near-term — confirms the weakness is not transitory. Sequential improvement April→June was noted in Q&A but did not produce a positive comp. Status: Resolved negatively

Q1 gross margin landing relative to the down-~250bps YoY guide. Gross margin came in at 55.8% versus FY25's full-year 57.9% and Q4 25's 56.7% — a YoY decline of roughly 90bps versus the ~250bps guided. This is a clean beat and the single most important positive in the print, suggesting tariff cost-sharing and selective pricing are landing better than the bear case assumed. Status: Resolved positively

Whether management reinstates an FY2026 outlook on the Q1 call. No. The FY26 outlook remains withdrawn and management explicitly tied reinstatement to tariff clarity and visible consumer reaction. Combined with the upsized $185M unmitigated tariff estimate, this signals tariff policy itself — not internal forecasting confidence — remains the binding uncertainty. Status: Resolved negatively

Inventory days at end of Q1. The press release and transcript inputs do not disclose specific inventory days. Management did not call out a build overshoot, but the silence on a topic pre-flagged last quarter is itself notable. Status: Continue monitoring

HOKA international growth rate sustaining a high-30s pace. International (all-brand) grew 49.7%, well above the high-30s threshold; HOKA-specific international wasn't broken out, but management cited record European reorders and strong China business, with Q1's growth partly inflated by international wholesale shipment timing pulling forward into the quarter. Underlying trajectory remains intact even normalizing for timing. Status: Resolved positively

What to watch into next quarter

Q2 gross margin landing relative to the 53.5–54% guide. This is the bottom of the margin trough per management's H1-heavy tariff math. A miss to the low end would imply $185M is itself optimistic or that pricing pass-through is weaker than expected; a beat would suggest the Q1 outperformance pattern (better-than-feared margin) is structural rather than timing-driven.

Whether the FY26 outlook is reinstated on the Q2 call. Two consecutive quarters of withholding is the record for this management team; a third would be a meaningful signal that tariff clarity is not arriving and that the order book itself is hard to underwrite.

HOKA Q2 growth landing at or above the ~10% guide. With Q1's +19.8% partly attributed to wholesale timing, Q2 is the clean read on underlying HOKA velocity. A miss below 10% would invalidate management's mid-teens H1 normalization narrative; a beat to mid-teens would suggest the deceleration is largely timing-driven.

DTC comparable net sales trajectory. Q1 came in at -2.2% with sequential April-to-June improvement per Q&A. Continued negative comps in Q2 — when management has already pre-conditioned for wholesale outpacing DTC — would harden the channel-reversal narrative and erode the long-term DTC-mix-expansion thesis.

Unmitigated tariff exposure delta. The number went from $150M to $185M in one quarter on a single Vietnam assumption change. Watch whether the Q2 print holds at $185M, escalates further, or starts to come down as mitigation actions accumulate — this is now the single cleanest barometer of management visibility.

Sources

Deckers Brands Q1 FY2026 press release, filed with SEC, July 24, 2025: https://www.sec.gov/Archives/edgar/data/910521/000091052125000028/deckex991pressrelease-6302.htm
Deckers Brands Q1 FY2026 earnings call commentary (Q&A and prepared remarks excerpts as extracted)

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