Stifel Upgrades Deckers Outdoor (DECK) to ‘Buy’ Citing Strength in Hoka, Favorable Ugg Outlook

Core Viewpoint - Deckers Outdoor Corporation is recognized as a highly profitable large-cap stock, with recent upgrades from Stifel indicating strong confidence in the company's future growth, particularly for the Hoka brand and favorable supply-demand dynamics for Ugg [1][3]. Financial Performance - In FQ2 2026, Deckers reported total revenue of $1.43 billion, reflecting a 9% year-over-year increase and exceeding expectations [2]. - Diluted EPS for the quarter increased by 14% year-over-year to $1.82, up from $1.59 [2]. - HOKA revenue grew by 11% and UGG revenue increased by 10% during FQ2, contributing to robust overall revenue growth [2]. Brand Performance - For the first half of the fiscal year, HOKA revenue rose by 15% and UGG revenue increased by 12%, driven by strong international market performance [3]. - HOKA benefited from successful product updates, while UGG experienced strong wholesale demand [3]. Market Challenges - The company acknowledged challenges in the US consumer market, particularly due to tariffs and price increases, which led to a 10% decline in UGG's direct-to-consumer sales during FQ2 [3]. - Deckers anticipates continued tariff headwinds into FY2027, indicating potential ongoing challenges in the market [3].