Ugg Season Is Here, But Some Market Watchers Are Concerned About the Brand’s DTC Slowdown

Core Viewpoint - Analysts express growing concerns about Deckers Brands, particularly regarding the Ugg brand, despite a revenue beat in Q2 2026 [1][3] Financial Performance - Deckers Brands reported a revenue beat for Q2 2026, but shares fell over 15% to $86.94 following the earnings report [2] - Ugg brand sales increased by 10% year-over-year, surpassing consensus by 3%, driven entirely by a 17% rise in wholesale, while DTC sales declined by 10% [4] Brand Analysis - The deterioration in Ugg's DTC trends is overshadowing positive developments in Hoka, which has seen accelerating DTC trends and solid wholesale order books [3] - Management attributes the DTC slowdown to improved wholesale inventory, weaker consumer sentiment, and a shift towards multi-brand shopping experiences [5] Management's Perspective - The CEO of Deckers Brands emphasized the strength of its brands and a loyal consumer base, anticipating a cautious consumer environment in the second half of the year due to tariffs and price increases [5] - The company aims for long-term sustainable growth rather than short-term fluctuations [5] Analyst Adjustments - Needham lowered its stock price target for Deckers Brands from $128 to $113 and adjusted its fiscal year 2026 earnings per share forecast to a range of $6.36 to $7.00 [3]