Key Highlights

  • Net sales rose 3.5% to a record USD 1.481 billion.
  • Diluted earnings per share rose 27% to USD 2.31, including USD 0.28 from Tariff refunds.
  • Direct-to-consumer comparable sales fell 6.4% while wholesale sales rose 5.5%.
  • Full-year earnings per share guidance was raised to USD 7.80 to USD 7.95.

Record Sales, Refund Boost

Deckers Brands (NYSE:DECK) reported fiscal second-quarter 2027 results on Thursday for the period ended Sept. 30. Net sales rose to USD 1.481 billion from USD 1.431 billion, an increase of 3.5%, or 2.8% in constant currency. HOKA net sales were USD 677.2 million, up 6.8%, and UGG net sales were USD 786.4 million, up 3.5%. Other brands fell 54.3% to USD 17.0 million, reflecting the phase-out of standalone Koolaburra operations.

Gross Margin was 60.5% against 56.2% a year earlier. Operating Income was USD 389.5 million versus USD 326.5 million, while selling, general and administrative expenses rose to USD 505.7 million from USD 477.3 million. Diluted Earnings per Share were USD 2.31 against USD 1.82.

Tariff Refunds Versus Underlying Trend

During the quarter the company received net refunds of USD 46.0 million of tariffs imposed under the International Emergency Economic Powers Act, plus USD 3.0 million of interest. The refunds added about 310 basis points to gross and Operating Margin and about USD 0.28 to earnings per share.

Excluding that benefit, the company reports adjusted earnings per share of USD 2.03, up 11.5%, and adjusted gross margin of 57.4%, up 120 basis points. Management linked the adjusted improvement to favorable full-price selling and product mix.

Wholesale Up, Direct Down

Wholesale net sales rose 5.5% to USD 1.093 billion, while direct-to-consumer net sales fell 1.8% to USD 387.5 million. Domestic net sales slipped 0.4% to USD 835.8 million, and international net sales rose 9.0% to USD 644.7 million, led by Asia Pacific.

Management said the U.S. market became increasingly promotional as the quarter progressed and that the company limited its participation to protect full-price selling. A disruption at a European third-party logistics provider delayed about USD 22 million of shipments, and part of that amount carries a risk of cancellation. CEO Stefano Caroti said certain 2026 HOKA Franchise updates did not resonate as well as intended.

Buybacks and Outlook

Cash and equivalents were USD 1.210 billion, versus USD 1.414 billion a year earlier, with no borrowings outstanding. Inventories were USD 860.8 million, up from USD 835.6 million. The company repurchased about 3.2 million shares for USD 299.3 million at a weighted average of USD 93.65, and USD 4.4 billion remained under its authorization.

For fiscal 2027, the company projects net sales of USD 5.700 billion to USD 5.725 billion, with HOKA growing at a high-single-digit rate and UGG at a low-single-digit rate. Diluted earnings per share are guided at USD 7.80 to USD 7.95, including about USD 0.52 from tariff refunds, with operating margin near 23% and gross margin near 58.5%. Third-quarter earnings are guided at USD 3.52 to USD 3.60, including about USD 0.24 from refunds.

Gauges to Watch

Of the USD 0.52 refund benefit in the full-year range, USD 0.28 landed in this quarter and USD 0.24 sits in the third-quarter guide, and the outlook assumes no further tariff refund collection. Direct-to-consumer comparable sales of negative 6.4% contrast with wholesale growth of 5.5%. Next reference points are HOKA and UGG growth against the guided rates, U.S. promotional intensity, the outcome of the delayed European shipments, and the USD 1 billion of repurchases assumed in the range.