Deckers stock is falling on concerns about the growth outlook for Hoka and Ugg

Shoemaker shares Decker brands Its shares fell more than 12% on Friday after the company trimmed its sales guidance for Hoka and Ugg – the two brands driving its growth – on concerns that tariffs are leading to a decline in demand.

Hoka, an emerging running shoe brand, is now expected to grow in the low-teens percent in fiscal 2026 after growing 24% in the same period last year, while the Boots Ugg brand is expected to grow in the low to mid-single-digit percentage range, after growing 13% in the same period last year.

In May, the company said Hoka and Ugg were expected to grow in the mid-teens and mid-singles, respectively, in fiscal 2026, but it cautioned on those forecasts by saying they were designed before President Donald Trump’s tariffs were introduced. At the time, it measured the expected impact on its costs, but said it was still to be determined what kind of impact the new fees could have on demand.

Announcing fiscal second-quarter earnings on Thursday, CFO Stephen Fasching said the effects of tariffs and higher prices on demand are now more evident.

“Part of the framework that we presented at the beginning of the year actually said that if tariffs don’t have an impact on consumers, how do we see some sort of certain growth, and we still believe that, right? But we know and currently see some impacts on the American consumer,” Fasching told analysts on a company conference call. “Consequently, US consumers are starting to see some price increases. This is impacting their purchasing behavior within the consumer discretionary space.”

He added that the guidance is not far from what the company originally thought, but acknowledged there was a “slight downturn” in its forecast.

The slowing pace of growth for Deckers’ two best-performing lines, combined with a reduction in their sales guidance, suggests that the two brands may be losing momentum after years of outperformance. Together, Hoka and Ugg account for the vast majority of Deckers’ revenue and have been crucial to offsetting weaknesses in other categories.

However, CEO Dave Powers played down fears of a long-term slowdown, telling investors that both brands remain strong among core consumers.

“We are confident in the long-term trajectory of our portfolio,” Powers said. “While tariffs and inflation create near-term pressures, Hoka and Ugg continue to lead in brand heat and market share gains across their categories.”

Unlike Hoka and Ugg, Deckers’ full-year revenue guidance fell short of analysts’ expectations. In fiscal 2026, the company expects revenue of about $5.35 billion, below Wall Street’s forecast of $5.45 billion, according to LSEG. It expects earnings per share to range between $6.30 and $6.39, roughly in line with estimates of $6.32 per share, according to LSEG.

On the company’s call with analysts, Fasching warned that tariff costs could total about $150 million this fiscal year. Executives said they expect to offset about half of those costs through price adjustments and cost sharing with plant partners.

Deckers shares have already fallen more than 55% year to date, leaving investors wary of any signs of slowing demand.