DECK Q2 Earnings Beat Estimate, HOKA & UGG Posts Double-Digit Growth

Core Insights - Deckers Outdoor Corporation (DECK) reported strong second-quarter fiscal 2026 results, driven by the performance of its HOKA and UGG brands, exceeding expectations and showing year-over-year growth [1][9]. Financial Performance - DECK's quarterly earnings were $1.82 per share, surpassing the Zacks Consensus Estimate of $1.58 and increasing from $1.59 in the prior year [2][9]. - Net sales rose 9.1% year over year to $1.43 billion, exceeding the consensus estimate of $1.41 billion, with constant-currency sales growth of 8.3% [2][9]. - Gross profit increased 9.6% year over year to $803.8 million, with a gross margin of 56.2%, up from 55.9% in the previous year [3][4]. - SG&A expenses rose 11.5% year over year to $477.3 million, representing 33.4% of revenues, reflecting ongoing brand investments [4][16]. - Operating income was $326.5 million, a 7% increase from $305.1 million in the prior year, with an operating margin of 22.8% [4][17]. Brand Performance - HOKA brand sales increased 11.1% year over year to $634.1 million, driven by a 13% rise in wholesale and 8% growth in direct-to-consumer (DTC) sales [5][9]. - UGG brand net sales grew 10.1% to $759.6 million, supported by a 17% increase in wholesale, although DTC sales declined by 10% [6][9]. - Other Brands experienced a decline of 26.5% year over year to $37.2 million, attributed to the phase-out of Koolaburra's standalone operations [7]. Sales Channels and Geography - Wholesale net sales increased 13.4% year over year to $1.04 billion, while DTC net sales declined 0.8% to $394.6 million [8][10]. - Domestic net sales decreased 1.7% to $839.5 million, while international net sales rose 29.3% to $591.3 million [10]. Future Outlook - For fiscal 2026, DECK projects net sales of $5.35 billion, with HOKA expected to grow in the low-teens percentage and UGG in the low to mid-single-digit range [15][17]. - The gross margin is anticipated to be 56%, with SG&A expenses expected to represent 34.5% of revenues [16]. - The operating margin for fiscal 2026 is projected at 21.5%, with earnings per share estimated between $6.30 and $6.39 [17].