Company Reports

We rate Deckers as a narrow moat company based on a brand intangible asset. Our moat rating is based on the brand strength of Ugg (50% of fiscal 2026 sales) and Hoka (47%). These footwear brands have powered Deckers to nine consecutive years of sales growth above 5%. The firm’s total sales rose to nearly $5.5 billion in fiscal 2026 from less than $2 billion before fiscal 2019. Deckers’ profitability has also risen, with its fiscal 2026 operating margin at 23%, up from around 9%-12% (adjusted) in fiscal years 2015-18.

Deckers' first-quarter fiscal 2027 sales rose 6% as Hoka (69% of total) and Ugg (27%) had increases of 8% and 5%, respectively. Gross margin rose 60 basis points to 56.4% from 55.8% on direct-to-consumer growth and fewer discounts, but operating margin fell to 15.2% from 17.1% on higher costs.

We rate Deckers as a narrow moat company based on a brand intangible asset. Our moat rating is based on the brand strength of Ugg (50% of fiscal 2026 sales) and Hoka (47%). They have powered the firm to nine consecutive years of sales growth above 5%. In absolute terms, Deckers’ total sales were nearly $5.5 billion in fiscal 2026, up from less than $2 billion before fiscal 2019. Its profitability has also risen, with its fiscal 2026 operating margin at 23%, up from around 9%-12% (adjusted) in fiscal years 2015-18.

Deckers' fiscal 2026 fourth-quarter sales grew 10% on increases of 15% and 9% for Hoka (60% of sales) and Ugg (37%), respectively. Its gross margin rose 90 basis points (to 57.6%) despite negative tariff impact, but its operating margin declined 3 percentage points on higher marketing spending.

We rate Deckers as a narrow moat company based on a brand intangible asset. Our moat rating is based on the brand strength of Ugg (51% of fiscal 2025 sales) and Hoka (45%). They have powered the firm to five consecutive years of double-digit sales growth. Specifically, Deckers’ total sales were nearly $5 billion in fiscal 2025, up from less than $2 billion before fiscal 2019. Its profitability has also risen, with its fiscal 2025 operating margin at nearly 24%, up from around 9%-12% (adjusted) in fiscal years 2015-18.

Deckers' third-quarter fiscal 2026 sales increased 7.1%. Its gross margin fell 50 basis points to 59.8% on tariff costs, but its operating margin rose 40 basis points to 31.4%. By brand, sales increased 4.9% for Ugg (67% of total sales in a seasonally strong period) and 18.5% for Hoka (32%).

We rate Deckers as a narrow moat company based on a brand intangible asset. Our moat rating is based on the brand strength of Ugg (51% of fiscal 2025 sales) and Hoka (45%). They have powered the firm to five consecutive years of double-digit sales growth. Specifically, Deckers’ total sales were nearly $5 billion in fiscal 2025, up from less than $2 billion before fiscal 2019. Its profitability has also risen, with its fiscal 2025 operating margin at nearly 24%, up from around 9%-12% (adjusted) in fiscal years 2015-18.

Led by 11% and 10% sales growth for Hoka (44% of total) and Ugg (53%), respectively, Deckers had 9% sales growth in second-quarter fiscal 2026. Its gross margin rose 30 basis points to 56.2% despite higher tariffs, but its operating margin slid 50 basis points to 22.8% on increased marketing.

We rate Deckers as a narrow moat company based on a brand intangible asset. Our moat rating is based on the brand strength of Ugg (51% of fiscal 2025 sales) and Hoka (45%). They have powered the firm to five consecutive years of double-digit sales growth. Specifically, Deckers’ total sales were nearly $5 billion in fiscal 2025, up from less than $2 billion before fiscal 2019. Its profitability has also expanded, with its fiscal 2025 operating margin at close to 24%, up from around 9%-12% (adjusted) in fiscal years 2015-18.

In its June-ending fiscal 2026 first quarter, Deckers Brands achieved 17% sales growth, a 17% operating margin (up from 16%), and $0.93 in EPS (from $0.75). International sales growth of 50% offset a 3% US decline. Hoka (68% of sales) and Ugg (27%) posted growth of 20% and 19%, respectively.

We rate Deckers as a narrow moat company based on a brand intangible asset. Our moat rating is based on the brand strength of Ugg (51% of fiscal 2025 sales) and Hoka (45%). They have powered the firm to five consecutive years of double-digit sales growth. Specifically, Deckers’ total sales were nearly $5 billion in fiscal 2025, up from less than $2 billion before fiscal 2019. Its profitability has also expanded, with its fiscal 2025 operating margin at close to 24%, up from around 9%-12% (adjusted) in fiscal years 2015-18.

In its (March-ended) fiscal 2025 fourth quarter, Deckers had 6% sales growth, as Hoka (57% of total) and Ugg (37%) posted increases of 10% and 4%, respectively. Deckers achieved a gross margin of 56.7% (up 50 basis points) and an operating margin of 17% (up 200 basis points).

We rate Deckers as a narrow moat company based on a brand intangible asset. Our moat rating is based on the brand strength of Ugg (52% of fiscal 2024 sales) and Hoka (42%). They have powered the firm to four consecutive years of double-digit sales growth, and we forecast a 15% increase in fiscal 2025. Specifically, we project Deckers’ total sales to reach $4.9 billion, up from less than $2 billion before fiscal 2019. Its profitability has also expanded, with annual operating margins exceeding 20%, up from around 9%-12% (adjusted) in fiscal years 2015-18.

Fueled by continuing high full-price sales growth for its key footwear brands, Deckers’ (December) fiscal 2025 third-quarter results surpassed our expectations. However, with shares up nearly 30% over the past three months in anticipation of a big holiday period, investors were seemingly disappointed in the full-year guidance as the stock dropped 16% in Jan. 30 aftermarket trading. We expect to raise our $115 fair value estimate by a mid-single-digit percentage on the report, but shares remain overvalued, in our view. We think Hoka and Ugg, the brands that provide an intangible asset-based narrow moat for Deckers, are performing exceptionally well, but also believe that recent sky-high sales growth rates and margins will moderate over time due to intense competition.

We are initiating coverage on footwear firm Deckers with a narrow moat rating and a $115 per share fair value estimate. We regard its shares, up about 600% over the past five years, as overvalued. Our Morningstar Uncertainty Rating is High, and our Capital Allocation Rating is Exemplary.

We rate Deckers as a narrow moat company based on a brand intangible asset. Our moat rating is based on the brand strength of Ugg (52% of fiscal 2024 sales) and Hoka (42%). They have powered the firm to four consecutive years of double-digit sales growth, and we forecast a 15% increase in fiscal 2025. Specifically, we project Deckers’ total sales to reach $4.9 billion this year, up from less than $2 billion before fiscal 2019. Its profitability has also expanded, with annual operating margins exceeding 20%, up from around 9%-12% in fiscal years 2015-18.