Deckers Outdoor (NYSE:DECK) used its fiscal third-quarter 2026 earnings call to highlight what management described as an “outstanding” performance, driven by strong global demand for the HOKA and UGG brands and supported by high levels of full-price selling. The company reported revenue of $1.96 billion for the quarter, up 7% from the prior year, and record diluted earnings per share of $3.33, up 11% year over year.
Quarter results show growth for HOKA and UGG
President and CEO Stefano Caroti said both key brands exceeded expectations in the quarter, with HOKA revenue rising 18% year over year to $629 million and UGG revenue increasing 5% to a record $1.3 billion. Caroti emphasized that growth was “balanced” across direct-to-consumer (DTC) and wholesale channels for both brands.
Margins, expenses, and record EPS
Chief Financial Officer Steve Fasching said gross margin was 59.8%, better than the company expected, and attributed the outperformance primarily to a lower-than-expected impact from increased tariffs due to inventory flow timing and mix, as well as “larger benefits from our pricing actions” (which he said were primarily attributable to UGG) and slightly lower promotions than planned. Fasching added that both UGG and HOKA achieved an average selling price slightly above the prior year, and that HOKA delivered gross margin expansion in the quarter.
SG&A expenses were $557 million, up 4% year over year. As a percentage of revenue, SG&A was 28.5%, improving 80 basis points from 29.3% last year, which Fasching said was primarily driven by favorable impacts from foreign currency exchange rate remeasurement. The quarter’s effective tax rate was 23.3%, compared with 21.8% a year earlier.
Brand commentary: UGG highlights and upcoming launches
Caroti said UGG remained “top of mind for consumers” and discussed actions taken ahead of peak season, including strategically allocating additional product to wholesale partners to improve in-stock positions. He said the approach boosted fall sales and allowed the company to address late-season demand through DTC.
UGG DTC revenue increased 5% year over year, while wholesale rose 4%. Caroti said the company drove growth in UGG Rewards membership, email subscribers, and retained consumers. He also noted DTC was used to test products with speed-to-market, calling out the new Quill franchise as a standout, and said performance insights were shared with wholesale partners to help accelerate expansion of new offerings.
Management highlighted marketing initiatives, including product collaborations and activations such as a Feel House experience in New York City around the UGG Sacai collaboration, pop-ups in Chicago and Berlin for the UGG Palace collaboration, and new male brand ambassadors in China. Caroti said the men’s category performed strongly, supported by adoption of products such as Tasman, Ultra Mini, and Lowmel, along with men’s-specific styles like the Weather Hybrid collection.
Looking to the fourth quarter, Caroti cited upcoming UGG launches including Mini-Me (a low-profile spring sneaker), Otzo (a new clog), and new fashion sandal silhouettes within the Golden Collection.
HOKA momentum, DTC inflection, and distribution opportunity
Caroti said HOKA’s third-quarter growth was driven by broader consumer adoption and a refined approach to managing the global marketplace. HOKA DTC revenue grew 19% and wholesale revenue increased 18%. He also discussed maintaining a “healthy pull model of demand” across channels.
A key theme in the Q&A was the improvement in HOKA’s U.S. DTC business. Caroti said the company made changes after learnings last year, including spacing out key franchise launches, tightening inventories of outgoing styles, and better leveraging DTC to move closeouts “in a controlled manner.” He and Fasching also pointed to consumers becoming more familiar with updated products, along with a cleaner marketplace compared to last year’s Bondi transition period.
Caroti called out the revamped HOKA membership program as a contributor to improved DTC metrics, citing early benefits in revenue per consumer, units per transaction, and multi-category purchasing among members versus the average consumer. In response to another analyst question, he reiterated that the membership program and reduced “noise” from outgoing styles were “one of the main reasons for our success.”
On the wholesale side, Caroti said sell-through “continued to outpace sell-in” during the fall season, which he said was a positive indicator of brand health. He also said HOKA’s market share increased significantly in the U.S. road running category above $140 for the three months ending in December, according to Circana. In Europe, he said the pace of sell-out drove record levels of preorders, with top strategic customers averaging about 90% sell-through.
Caroti and Fasching also discussed distribution runway, noting HOKA’s presence in roughly half of targeted U.S. sporting goods stores, about a quarter of relevant U.S. athletic specialty stores, and earlier-stage penetration internationally. In China, Caroti said the brand occupies “a little less than one-third” of the potential management sees over the next several years, operating through a mix of company-owned and partner-run mono-brand stores with a typical 2-to-1 ratio of partner locations to company-owned retail stores.
Capital return and raised fiscal 2026 outlook
Deckers ended the quarter (Dec. 31, 2025) with $2.1 billion in cash and equivalents, inventory of $633 million (up 10% year over year), and no outstanding borrowings. During the quarter, the company repurchased about $349 million of shares at an average price of $92.36. Through the first nine months of fiscal 2026, Deckers repurchased approximately 8 million shares, representing more than 5% of shares outstanding at the start of the fiscal year. Fasching said $1.8 billion remained authorized for repurchases, and the company was on track to repurchase more than $1 billion in fiscal 2026, which he said was expected to contribute more than $0.20 of diluted EPS improvement.
Management raised full-year fiscal 2026 guidance, citing third-quarter strength:
- Revenue: now expected at $5.4 billion to $5.425 billion
- Gross margin: approximately 57% (up 100 basis points from prior guidance)
- SG&A: approximately 34.5% of revenue
- Operating margin: approximately 22.5% (up 100 basis points from prior guidance)
- Effective tax rate: approximately 23%
- Diluted EPS: $6.80 to $6.85, representing a 7% to 8% increase over last year’s record EPS
On tariffs, Fasching said the company now expects the unmitigated tariff impact on fiscal 2026 to be approximately $110 million, with a net impact of about $25 million after pricing actions and favorable timing of inventory sold. He cautioned that this estimate does not represent a full-year impact if tariffs remain in place moving forward. For the fourth quarter, the company implied a roughly 200-basis-point gross margin headwind, which Fasching said was expected to be entirely from net tariff pressure, with the full 20% burden anticipated in Q4.
For the fourth quarter, Deckers expects HOKA revenue growth of 13% to 14%, which Fasching said would represent the brand’s largest-ever quarterly revenue, while UGG revenue is assumed to be roughly flat due to some orders shipping earlier in Q3.
In the Q&A, Fasching said the company anticipates UGG growth in fiscal 2027, while noting the company was not providing fiscal 2027 guidance. Caroti added he was encouraged by how order books were developing globally and said the company had visibility through the first three quarters of next year.
Caroti closed by reiterating confidence in continued domestic and international growth, while also noting Deckers was recognized by The Wall Street Journal as one of the best-managed companies of 2025.
About Deckers Outdoor (NYSE:DECK)
Deckers Outdoor Corporation is a global designer, marketer and distributor of footwear, apparel and accessories. The company’s product portfolio includes well‐known brands such as UGG, HOKA, Teva, Sanuk and Koolaburra by UGG, spanning a range of lifestyle, performance and outdoor categories. Deckers leverages a blend of proprietary manufacturing, strategic brand storytelling and direct‐to‐consumer retail to serve both fashion‐focused and performance‐oriented customers.
Founded in 1973 by Doug Otto and Karl F.
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