The Deckers Outdoor story

What drives the business

• Deckers builds proprietary footwear brands around HOKA’s cushioned performance shoes, UGG’s premium lifestyle footwear and Teva’s outdoor products, reaching consumers through outside retailers, distributors, company websites and stores.
• The portfolio has narrowed through the Sanuk divestiture and the phaseout of AHNU and Koolaburra standalone operations, leaving Other brands primarily centered on Teva.
• In the quarter to June 2026, HOKA sales increased 7.7% to $703.5 million and UGG sales increased 4.9% to $278.0 million, while Other brands declined 18.1% to $37.9 million.
• Wholesale remained the larger channel at $666.7 million in the quarter to June 2026, but direct consumer sales grew 13.0% to $352.8 million against wholesale growth of 2.2%, extending a distribution model that included 203 company stores as of March 31, 2026.
• International sales increased 8.4% to $502.1 million in the quarter to June 2026, outpacing domestic growth of 3.2% as Deckers expanded its brands’ global reach.

What the price assumes

At $78.36, the reverse DCF implies annual growth of -3.9% in free cash flow after stock pay for ten years, using a 10.2% discount rate.

That implied contraction contrasts with delivered annual growth of 21.4% over the last 7 years and the TenQ check’s 12.7% bar, which slows that record halfway toward 4%.

Value DECK on your own assumptions

What could change the story

• Revenue growth of 7.9% over the last twelve months trails the 14.7% annual pace over the last three years, failing TenQ’s growth acceleration check.
• Operating expenses are absorbing more of the sales gains: in the quarter to June 2026, gross margin improved to 56.4% from 55.8%, but general and administrative expenses including selling costs rose to $419.9 million from $372.6 million as operating income declined.
• Capital returns at 110.1% of free cash flow fail TenQ’s cash coverage check, although $1.6 billion in cash and short-term investments and $0 total debt provide financial flexibility.
• Outsourced production concentrated in Vietnam and Indonesia, long manufacturing lead times and reliance on sheepskin processed by two Chinese tanneries leave Deckers exposed to supply disruptions, trade restrictions and demand forecasting errors.

What to watch next

• Fiscal 2027 guidance calls for sales of $5.86 billion to $5.91 billion, with HOKA increasing by a low-double-digit percentage and UGG by a mid-single-digit percentage, making HOKA’s pace a key measure in subsequent releases.
• Direct consumer comparable sales growth of 6.8% and international growth of 8.4% in the quarter to June 2026 provide benchmarks for whether expansion continues to attract demand.
• Operating expense growth will help explain progress toward fiscal 2027 gross margin slightly better than 56.5% and operating margin slightly better than 21.5%.
• The fiscal 2027 diluted earnings per share outlook of $7.35 to $7.50 assumes repurchases equal to approximately 80% of projected free cash flow, linking the earnings outlook to both cash generation and share count reduction.

Sources

• Deckers Outdoor's earnings release, filed with the SEC
• Its latest 10-Q or 10-K, for the risk factors
• The DECK stock report, for every figure and check