Why Deckers Stock Tumbled Today

Core Viewpoint - Deckers reported fiscal fourth-quarter earnings that exceeded estimates but provided disappointing guidance for the current quarter, leading to a significant drop in stock price [1][4]. Financial Performance - Fiscal fourth-quarter revenue increased by 6.5% to $1.02 billion, aligning closely with estimates of$1.01 billion, a slowdown compared to 16.3% growth for the full year [2]. - Hoka brand sales growth decelerated to 10%, down from 23.6% for the full fiscal year, while Ugg brand growth slowed to 3.6% from 13.1% [2]. - Gross margin improved from 56.2% to 56.7%, and operating income rose by 20.5% from $144.3 million to$173.9 million [3]. - Earnings per share (EPS) increased from $0.82 to$1, significantly surpassing the consensus estimate of $0.61 [3]. Future Guidance - For the first quarter, management anticipates revenue between$890 million and $910 million, below the consensus estimate of$925.3 million, indicating a 9% growth at the midpoint [4]. - Adjusted EPS is projected to be between $0.62 and$0.67, lower than the estimate of $0.79 and down from$0.75 in the same quarter last year [4]. Market Conditions - Management acknowledged that uncertainties related to tariffs would impact business this fiscal year, leading to a lack of guidance due to these uncertainties [5]. - The company has increased its share repurchase authorization, indicating a strategy to take advantage of the stock's decline, which has fallen over 50% from its peak earlier this year [5]. Valuation Perspective - Despite the weak guidance and pressures from the trade environment, the current valuation appears attractive for a company with a history of outperforming the market [6].