Deckers Outdoor (DECK 1.74%) stock tumbled 12.6% through 2:10 p.m. ET Friday despite crushing on its earnings report last night.
Heading into the report, analysts forecast Deckers would earn only $1.58 per share on $1.4 billion in sales in its fiscal second quarter 2026. In fact, Deckers reported profits of $1.82 per share on those same revenues.
Image source: Deckers Outdoor.
Deckers Q2 earnings
Deckers grew Q2 2026 revenue 9% year over year, and its earnings surged 14%. HOKA and UGG brands both delivered double-digit sales growth (11% and 10%, respectively), and CEO Stefano Caroti expressed confidence that Deckers will "achieve our fiscal year 2026 outlook."
Gross margin inched up 30 basis points to 56.2%. Selling, general, and administrative expenses (SGA) rose faster than sales growth (up 11%). Still, Deckers found a way to make the numbers work and keep overall net profit growing faster than sales.
NYSE: DECK
Key Data Points
Is Deckers stock a buy?
Where Deckers seems to have disappointed investors is on guidance. Management forecast only 56% gross margins through the end of the year, less than in Q2. Worse, Deckers plans to spend 34.5% of sales on SGA this year -- up from the 33.3% spent in Q2. This will weigh on profits, and so management said earnings will probably range from $6.30 to $6.39 this year.
Strangely, though, that still works out to about $6.35 at the midpoint -- more than the $6.32 per share that analysts were forecasting for this year's profit.
So why the sell-off? Well, $6.35 would be less than 1% earnings growth from the $6.33 per share Deckers earned last year. For a stock trading for 14 times trailing earnings, investors presumably wanted to see Deckers promise more earnings growth.
Deckers didn't do that -- and so investors are selling Deckers stock.
