Core Insights - Deckers Outdoor Corporation's international business is a key growth driver, with HOKA and UGG showing strong performance abroad, particularly in the first quarter of fiscal 2026 where international revenues increased by 49.7% year over year to $463.3 million, significantly outperforming U.S. sales [1][10] International Business Performance - HOKA's international growth is robust, especially in the EMEA region, with record European reorders and strong consumer acquisition. Key products like Bondi, Clifton, and Arahi are leading sales, with Bondi and Clifton being top U.S. running franchises and doubling volumes in China for spring/summer 2025 [2] - UGG has also seen strong international growth, particularly in Europe and China. The brand's 365 strategy has expanded its appeal beyond cold-weather items, with new styles like the PeakMod clog gaining popularity, supported by effective marketing campaigns [3] Infrastructure and Strategic Investments - To meet rising demand, Deckers has invested in infrastructure, including changing its EMEA logistics provider and opening new stores in cities like Berlin, Milan, and various locations in China. These initiatives aim to enhance retail presence and build long-term brand equity [4] Future Outlook - Management anticipates that international markets will continue to outpace U.S. growth, with HOKA positioned as the fastest-growing brand and UGG expanding its seasonal and demographic reach. The goal is to increase international sales to 50% of total revenues, creating a more balanced and resilient business model [5] Competitive Landscape - In comparison, Steven Madden, Ltd. reported an 8% year-over-year increase in international revenues for the second quarter of 2025, while Wolverine World Wide, Inc. saw a 15.7% increase to $250 million, both outpacing U.S. sales [6][7][8] Valuation and Earnings Estimates - Deckers shares have declined by 46.3% year to date, contrasting with the industry's decline of 9.6%. The company trades at a forward price-to-earnings ratio of 16.80X, below the industry average of 18.22X [9][12] - The Zacks Consensus Estimate for Deckers' fiscal 2026 earnings suggests a slight decline of 0.6%, while fiscal 2027 indicates an 8.3% increase, with recent upward revisions in earnings estimates for both fiscal years [13]

Core Insights - The athletic footwear market is experiencing intensified competition, with NIKE Inc. and Deckers Outdoor Corporation as key players attracting investor interest [2] - The question arises regarding which stock presents greater upside potential in the near future [2] NIKE Overview - NIKE maintains its status as a global brand leader, with strong cultural and performance influence through its brands like NIKE, Jordan, and Converse [3] - In fiscal 2025, NIKE regained momentum through significant sports events, enhancing its emotional connection with consumers [3] - Performance categories showed strong results, with running sales growing in the high-single digits and women's basketball sales increasing over 50% year-over-year [4] - Marketplace strategies, including collaborations with DICK'S Sporting Goods and JD Sports, have improved sell-through rates and in-store experiences [5] - However, NIKE faced financial challenges, with Q4 revenues declining 12% to $11.1 billion and gross margins contracting 440 basis points to 40.3% due to discounting and supply chain issues [6] - Greater China remains a challenge, with revenues down 20% and EBIT declining 45%, indicating a slower recovery compared to other regions [7] Deckers Overview - Deckers is experiencing strong growth, particularly in its HOKA and UGG brands, with HOKA sales rising 19.8% to $653.1 million and UGG sales climbing 18.9% to $265.1 million [8] - International markets are a significant growth driver, with companywide international revenues increasing 49.7% year-over-year [9] - Deckers' innovation and brand storytelling are central to its strategy, with ongoing product development and new launches [11] - The company's omni-channel and wholesale strategies are yielding scalable growth, with wholesale net sales rising 26.7% in the first quarter [12] - Despite challenges such as anticipated tariff costs and profitability pressures, Deckers is well-positioned for sustainable growth [13] Comparative Analysis - The Zacks Consensus Estimate for NIKE suggests declines in sales and EPS for fiscal 2026, with a 10.6% downward revision in EPS estimates over the past 60 days [14] - In contrast, Deckers' estimates imply a 9% growth in sales for fiscal 2026, with a slight decline in EPS, but a 4% increase in EPS estimates over the past 60 days [17] - Stock performance over the past three months shows DECK shares rising 3.6%, while NKE shares gained 26.9%, reflecting NIKE's stronger brand momentum [19] - Valuation metrics indicate NIKE's forward P/E at 40.28, significantly higher than Deckers' 16.13, suggesting NIKE is pricier relative to historical levels [21] Investment Outlook - Deckers is positioned as a stronger investment candidate due to robust growth in HOKA and UGG, international expansion, and a healthy product pipeline [24] - NIKE, while investing in innovation and digital transformation, faces near-term challenges from revenue declines and margin pressures, making Deckers a more favorable option to hold [25]