Deckers cuts sales outlook as shoppers hold back, but refuses to discount

what happened

Deckers Outdoor, the owner of Hoka and Ugg, lowered its annual sales forecast to $5.7–5.73 billion from the earlier $5.86–5.91 billion. Executives said consumers are spending more cautiously. Chief Executive Stefano Caroti told analysts the company will compete hard but will not join a "race to the bottom" and will keep selling at full price.

Quarterly revenue rose 3.5% to $1.48 billion, short of the $1.51 billion analysts expected, and sales of both Hoka and Ugg missed forecasts. Net income was $313.1 million, or $2.31 a share, above the $1.79 analysts had anticipated. Deckers raised its earnings-per-share outlook to $7.80–7.95, helped by tariff refunds worth 52 cents a share for the year, according to the report.

why it matters

The sneaker industry is carrying excess inventory of casual lifestyle shoes, and rivals such as Nike and Foot Locker have been discounting. Deckers is betting on marketing and new styles instead, so its results will show whether premium positioning holds up in softer consumer demand.

market impact

US consumer stocks: weak demand and a lower sales outlook pressure Deckers and footwear retailers

tags

instruments