Deckers Outdoor Corp (NYSE:DECK) delivered a robust set of third-quarter results for its 2026 fiscal year, handily surpassing analyst expectations on both the top and bottom lines. The strong performance, highlighted by continued momentum in its HOKA brand, prompted a significant positive reaction in the stock, with shares surging over 13% in after-hours trading following the announcement.
Quarterly Performance vs. Estimates
The footwear and apparel company reported net sales of $1.96 billion for the quarter ended December 31, 2025, marking a 7.1% increase over the same period last year. More importantly, this revenue figure came in well ahead of the Wall Street consensus estimate of approximately $1.91 billion.
The earnings beat was even more pronounced. Deckers reported diluted earnings per share (EPS) of $3.33, which soared past the analyst estimate of $2.82. This represents a 20.5% earnings surprise and underscores the company's ability to translate strong sales into significant profit growth.
- Reported Revenue: $1.96 billion
- Estimated Revenue: $1.91 billion
- Reported EPS: $3.33
- Estimated EPS: $2.82
Market Reaction and Strategic Drivers
The immediate double-digit jump in the stock price reflects investor approval of the earnings beat and the underlying strength of Deckers' brand portfolio. The market's reaction suggests that the results alleviated concerns that may have been reflected in the stock's slight decline over the past month.
A key driver of the quarter's success was the standout performance of the HOKA brand, which saw net sales surge 18.5% year-over-year to $628.9 million. The flagship UGG brand also grew, with sales increasing 4.9% to $1.31 billion. The company's direct-to-consumer (DTC) channel, a focus for higher margins and brand control, grew 8.1%, outpacing wholesale growth.
Updated Full-Year Outlook
Management provided an updated financial outlook for the full fiscal year ending March 31, 2026, which appears cautiously optimistic relative to existing analyst expectations.
The company now expects net sales in the range of $5.40 billion to $5.43 billion. This guidance midpoint of $5.41 billion is slightly above the analyst sales estimate of $5.48 billion provided in the context data. For earnings, Deckers raised its diluted EPS guidance to a range of $6.80 to $6.85. This updated EPS outlook is a meaningful increase from prior expectations and incorporates the impact of substantial share repurchases executed during the quarter.
- Deckers' Sales Guidance (Midpoint): $5.41 billion
- Analyst Sales Estimate: $5.48 billion
- Deckers' EPS Guidance (Midpoint): $6.83
Financial and Operational Highlights
Beyond the headline sales and profit figures, the earnings release highlighted several other important points:
- Profitability: Gross margin remained elevated at 59.8%, though it saw a slight contraction from 60.3% in the prior-year quarter. Operating income grew 8.3% to $614.4 million.
- Capital Allocation: The company remains aggressively committed to returning capital to shareholders. During Q3, it repurchased 3.8 million shares for $348.5 million. For the full fiscal year, share repurchases are now expected to exceed $1.0 billion.
- Balance Sheet: Deckers maintains a fortress balance sheet with $2.09 billion in cash and cash equivalents and no outstanding debt.
Looking Ahead
The strong Q3 results and raised full-year guidance position Deckers favorably as it heads into its final quarter. The company's strategy of nurturing two powerhouse brands in HOKA and UGG, while managing inventory and channels for full-price selling, continues to yield impressive financial returns. The market's enthusiastic reaction indicates confidence that this trajectory can be sustained.
For a detailed look at historical earnings, future estimates, and analyst projections for Deckers Outdoor Corp, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation, or an offer to buy or sell any security. Investing carries risks, including the potential loss of principal.
