Deckers delivered solid second-quarter financial performance despite ongoing headwinds in its crucial U.S. market, where consumer sentiment continues to weigh on domestic sales for the parent company of UGG and HOKA brands.
“In the U.S., consumer sentiment is still under pressure, but we are encouraged by the signs of progress we have seen in our business and have maintained our focus to ensure HOKA and UGG remain positioned for long-term success,” said CEO Stephen Caroti on the company’s earnings call Thursday.
The California-based footwear company reported net sales of $1.43 billion for the second quarter of fiscal 2026, a 9.1% increase from $1.31 billion in the prior-year period.
U.S. Market Challenges Continue
The company’s performance comes amid persistent weakness in its home market, where consumer confidence remains under pressure.
Geographically:
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- Domestic net sales decreased 1.7% to $839.5 million compared to $853.9 million.
- International net sales increased 29.3% to $591.3 million compared to $457.4 million.
Caroti acknowledged these domestic challenges while expressing cautious optimism about recent business trends.
“The U.S. marketplace remains dynamic, with recent consumer trends indicating a heightened preference for multi-brand shopping experiences,” Caroti said. “We believe UGG and HOKA are prepared to acquire new consumers and gain share in this environment with consumers wherever they wish to interact with our brands.”
The executive emphasized the company’s commitment to sustainable growth over short-term gains.
“We’re not chasing growth in a quarter or in a year, trying to blow out wholesale distribution just to show sales increases,” he said.
Strong Brand Performance Drives Growth
Both of Deckers’ flagship brands delivered double-digit growth during the quarter.
By brand:
- HOKA brand net sales increased 11.1% year-over-year to $634.1 million compared to $570.9 million.
- UGG brand net sales increased 10.1% to $759.6 million compared to $689.9 million.
- Other brands’ net sales decreased 26.5% to $37.2 million compared to $50.6 million.
Net income for the quarter reached $268.2 million, with gross margin improving to 56.2% from 55.9% in the prior year. Operating income climbed to $326.5 million from $305.1 million year-over-year.
CFO Steve Fasching reinforced the company’s long-term perspective.
“We don’t want to just chase sales because we want to achieve a higher number,” Fasching said. “We’re about building brands for the long term.”
International Markets Lead Growth Strategy
While domestic markets face headwinds, international expansion continues to drive company performance. “International markets are leading our growth, but we’ve seen a very strong order book conversion across all regions,” Caroti said.
The company anticipates this trend will continue and expects “international to outpace U.S. growth and global wholesale to outpace DTC for this fiscal year.”
By channel:
- Wholesale net sales increased 13.4% to $1.036 billion compared to $913.7 million.
- DTC net sales decreased 0.8% to $394.6 million compared to $397.7 million. DTC comparable net sales decreased 2.9%.
Outlook Reflects Cautious Optimism
Looking ahead, Deckers projects full-year net sales of approximately $5.35 billion with diluted earnings per share expected between $6.30 and $6.39. HOKA is anticipated to grow by a low-teens percentage, while UGG is expected to increase in the low-to-mid-single-digit range.
The company faces a $150 million tariff impact but plans partial mitigation through pricing strategies. Gross margin is projected at approximately 56% for the full fiscal year, with an operating margin of around 21.5%.
Kate Robertson can be reached at kate@shop-eat-surf-outdoor.com.
