DECK Stock Down Nearly 50% in 6 Months: Time to Consider Selling?

Core Viewpoint - Deckers Outdoor Corporation (DECK) has experienced a significant decline in stock price, dropping 49% over the past six months, which is substantially worse than the broader retail and market indices [1][4][9] Group 1: Stock Performance - DECK shares have underperformed compared to the Zacks Retail-Apparel and Shoes industry, which fell by 15.7%, and the Retail-Wholesale sector's decline of 3.4% [1][4] - The stock closed at $107.70, nearly 51.9% below its 52-week high of $223.98 reached on January 30, 2025, and is trading below its 50 and 200-day moving averages [6][9] - Compared to peers, Boot Barn's shares increased by 9.6%, while Adidas and Nike saw declines of 7.3% and 18.7%, respectively [5] Group 2: Growth Challenges - The decline in DECK's stock price is attributed to slowing growth and increased competition in the footwear and accessories market, alongside weaker direct-to-consumer (DTC) sales in the U.S. for HOKA [4][9] - Management anticipates up to $150 million in additional costs due to new tariffs, which will impact gross margins that reached a record 57.9% in fiscal 2025 but are expected to decline in fiscal 2026 [15][20] - The company has opted not to provide formal revenue or earnings guidance for fiscal 2026 due to uncertainties in global trade policies and consumer sentiment [19] Group 3: Strategic Initiatives - Deckers is focusing on sustainable growth through global expansion, innovation, and a balanced channel strategy, with HOKA and UGG deriving 34% and 39% of revenues from international markets in fiscal 2025 [21] - The company is investing in innovation, with five HOKA franchises generating over $100 million annually, and is adapting to consumer preferences through digital-first strategies [22] Group 4: Valuation Concerns - DECK is currently trading at a forward 12-month price-to-sales (P/S) ratio of 2.96, significantly higher than the industry average of 1.74 and the sector average of 1.61, raising concerns about its elevated valuation amid current challenges [10][11]