Deckers Outdoor topped estimates for first-quarter results on Thursday, fuelled by robust demand in international markets such as Europe and China for its Hoka and UGG brands, sending shares of the footwear maker up about 9 percent in extended trading.
Deckers has been rapidly expanding its international presence, in an effort to counter choppy US demand after several years of strong growth.
Similar to rivals such as Nike and Skechers, Deckers relies heavily on Vietnam as a key manufacturing hub.
Deckers now expects a $185 million rise in costs of goods sold in fiscal 2026, up from $150 million it forecast in May, taking into account a 20 percent tariff on Vietnam, company executives said on a post-earnings call.
It plans to mitigate some costs through strategic product price increases over the remainder of the year, after taking some price hikes earlier this month.
The company had scrapped its annual forecast in May in response to macroeconomic uncertainties. Its stock has lost 48 percent of its value this year.
International net sales surged 49.7 percent in the quarter, more than offsetting a 2.8 percent dip in domestic sales.
“There’s a big opportunity outside of US since Hoka and UGG are underpenetrated compared to Nike, Adidas, and others. This is one of the big opportunities for Hoka to expand its market,” Morningstar analyst David Swartz said.
Deckers expects second-quarter net sales in the range of $1.38 billion to $1.42 billion, the mid-point of which is in line with analysts’ estimate of $1.40 billion, according to data compiled by LSEG.
Earnings per share is expected to be in the range of $1.50 to $1.55 in the quarter, while analysts were expecting a profit of $1.55 per share.
First-quarter net sales rose 16.9 percent to $964.5 million, beating analysts’ average estimate of $901.1 million. It logged earnings per share of 93 cents, surpassing estimates of 68 cents.
By Savyata Mishra; Editor: Alan Barona
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