Deckers combines HOKA-led international growth, UGG cash generation, 23.1% operating margins, and a discounted 11.4x forward P/E for an attractive five-year compounder despite slowing near-term growth.
Overview
Deckers Outdoor is a global footwear, apparel, and accessories company built around two complementary brands: growth-oriented HOKA and cash-generative UGG, with smaller contributions from Teva and other brands. FY2026 net sales reached a record $5.472 billion, up 9.8% year over year, with HOKA contributing $2.587 billion and UGG $2.739 billion. International sales rose 26.8% to $2.281 billion, while DTC represented 41.4% of revenue. **The business combines premium brand equity with exceptional profitability:** FY2026 operating margin was 23.1%, ROIC was 37.58%, and the balance sheet carried zero debt. Q1 FY27 sales reached $1.0195 billion, up 5.7% and above consensus, while EPS of $0.94 beat estimates by $0.06. Management raised FY27 EPS guidance to $7.35–$7.50, reaffirmed $5.86–$5.91 billion of sales, and expects gross margin above 56.5% and operating margin above 21.5%. At approximately 11.4x forward P/E versus a 20.0x five-year average and 19.5x peer benchmark, valuation discounts slower growth. Near-term catalysts include HOKA international expansion, DTC growth, margin resilience, buybacks, and potential multiple re-rating.