Deckers shares jump 23% on earnings beat, $1B buyback
HOKA surges 18.5% while UGG growth accelerates as footwear maker raises full-year guidance
Deckers Outdoor Corporation shares surged in extended trading Thursday after the Goleta-based footwear maker reported third-quarter earnings that blew past Wall Street expectations and announced a substantial expansion of its share buyback program.
The company, known for its premium brands including UGG and HOKA, posted adjusted earnings per share of $3.33 for the fiscal third quarter, beating analyst estimates of $2.76 by 20.5%. Revenue reached $1.96 billion, exceeding the consensus forecast of $1.87 billion by 4.7%.
The strong performance prompted management to raise full-year fiscal 2026 earnings guidance to a range of $6.80 to $6.85 per share, a significant increase from previous expectations. The company also revealed it had already repurchased $813.5 million worth of shares year-to-date and expects total fiscal 2026 buybacks to exceed $1 billion, according to its earnings release.
"We delivered exceptional third-quarter results, driven by strong brand momentum across our portfolio," said Dave Powers, president and chief executive officer. "Our strategic investments in brand marketing, product innovation, and global expansion are clearly resonating with consumers worldwide."
The standout performer was HOKA, the performance running brand that has become a growth engine for the company. HOKA revenue jumped 18.5% to $628.9 million, continuing its rapid expansion in the competitive athletic footwear market. The brand's distinctive maximalist cushioning technology has gained a devoted following among serious runners and casual athletes alike.
UGG, the company's legacy sheepskin boot brand, showed accelerating growth with revenue increasing 4.9% to $1.31 billion. The performance suggests UGG is successfully expanding beyond its seasonal core business into year-round categories, a strategic priority for management.
Deckers' strong results stand in contrast to broader challenges in the consumer discretionary sector, where many apparel and footwear retailers have struggled with inventory management and changing consumer spending patterns. The company's gross margins and direct-to-consumer sales have shown resilience despite promotional pressures across the industry.
Analysts have taken note of Deckers' momentum. The stock currently carries an average price target of $111.26, representing roughly 11% upside from current levels, with 12 analysts rating it a buy and 12 recommending hold, according to market data. The shares have been volatile over the past year, trading in a range from $78.91 to $223.98.
The company's financial position remains robust with profit margins of 19.4% and operating margins of 22.8%. Return on equity stands at an impressive 43.3%, reflecting efficient capital deployment and strong brand equity that commands premium pricing.
Deckers' market capitalization has grown to $14.8 billion, making it one of the more valuable pure-play footwear companies. Institutional investors own 99.4% of shares, reflecting the stock's status as a favorite among professional money managers seeking exposure to premium consumer brands.
Looking ahead, investors will be watching whether HOKA can maintain its double-digit growth trajectory and whether UGG's momentum can continue through the spring season. The company's significant buyback program should provide additional support for earnings per share as the number of outstanding shares continues to decline.
The raised guidance suggests management is confident in continued brand strength despite potential macroeconomic headwinds. With both of its major brands posting solid growth and capital returns to shareholders accelerating, Deckers appears well-positioned to outperform the broader apparel and footwear sector in the coming quarters.