Deckers grew fiscal 2026 sales 9.8% to $5.47B on HOKA (+15.9%) and a 26.8% jump in international sales while US sales were flat; tariffs trimmed operating margin to 23.1%, and $1.08B of buybacks lifted diluted EPS 10.9% to $7.02.
Revenue
$5.5B
+9.8% YoY
Net income
$1.0B
+6.0% YoY
Diluted EPS
$7.02
+10.9% YoY
Operating margin
23.1%
Overview
Deckers Brands, the owner of HOKA running shoes and UGG boots, grew net sales 9.8% to $5.47 billion in fiscal 2026 (the year ended March 31, 2026). Almost all of that growth came from outside the US: international sales rose 26.8% while US ("domestic") sales were essentially flat, up 0.2%. Profit grew more slowly than sales. Operating margin (the share of revenue left after paying for products and running the business, before interest and tax) slipped from 23.6% to 23.1%, mainly because of new US tariffs and heavier spending on marketing, stores and staff. Net income rose 6.0% to $1.02 billion, but diluted earnings per share (EPS, profit divided by the number of shares) rose 10.9% to $7.02, because Deckers spent $1.08 billion buying back its own stock, leaving about 4.5% fewer shares to split the profit between.
Key Metrics
Metric
FY2026
FY2025
YoY Change
Net sales
$5,472.3M
$4,985.6M
+9.8%
Gross margin
57.7%
57.9%
-0.2 pts
Operating income
$1,262.9M
$1,179.1M
+7.1%
Operating margin
23.1%
23.6%
-0.5 pts
Net income
$1,024.1M
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Source: Deckers FY2026 Form 10-K. "Constant currency" strips out the effect of exchange-rate moves; on that basis total sales grew 9.0%, so currencies added under one point of growth. "Comparable DTC" counts only stores and sites open in both years.
Revenue by brand and channel
Deckers sells through two channels: wholesale (selling to retailers such as running-specialty shops and department stores) and direct-to-consumer, or DTC (its own websites and stores). DTC usually earns a higher gross margin because Deckers keeps the retailer's markup.
Brand / channel
FY2026
FY2025
YoY Change
HOKA wholesale
$1,651.8M
$1,397.8M
+18.2%
HOKA DTC
$935.5M
$835.3M
+12.0%
UGG wholesale
$1,444.7M
$1,282.3M
+12.7%
UGG DTC
$1,294.1M
$1,249.0M
+3.6%
Other brands (mainly Teva)
$146.2M
$221.2M
-33.9%
Total wholesale
$3,208.1M
$2,855.9M
+12.3%
Total DTC
$2,264.2M
$2,129.7M
+6.3%
HOKA added $354 million of sales and is now 47% of the company. The 10-K says growth was "led by international sales" with an increase in domestic sales too, as consumers adopted key franchises and new products launched during the year.
UGG remains the larger brand at $2.74 billion. Its growth was also led by international markets; in the US, wholesale grew but DTC saw only "a slight increase."
Other brands fell by a third, largely by design: Deckers phased out standalone Koolaburra and AHNU operations during the year and sold Sanuk in August 2024. Teva sales also fell as the brand pulls back from value-oriented retailers toward outdoor and premium stores.
The channel mix moved the wrong way for margins. Wholesale grew about twice as fast as DTC, lifting wholesale to 58.6% of sales from 57.3%. Management names "a slightly unfavorable channel mix" as one of the two reasons gross margin fell. The choice is deliberate (wider wholesale distribution builds HOKA awareness abroad), but it means growth is coming through the lower-margin channel.
Domestic vs. international: the US has stalled
Geography
FY2026
FY2025
YoY Change
Domestic (US)
$3,191.5M
$3,186.7M
+0.2%
International
$2,280.8M
$1,798.9M
+26.8%
International sales rose $482 million, essentially all of the company's $487 million increase. International is now 41.7% of sales, up from 36.1%. US sales were flat, though part of that reflects the Koolaburra phase-out and the Sanuk sale, which the company says weighed on domestic wholesale. Even so, the growth engine is now overseas, which brings more exposure to foreign currencies and to execution risk; the 10-K flags that one international third-party warehouse partner is being replaced.
Gross margin and tariffs
Gross margin (the share of revenue left after the cost of making and shipping the product) dipped 0.2 points to 57.7%. The 10-K attributes the decline "primarily" to "incremental tariffs on domestic goods and a slightly unfavorable channel mix," partly offset by cost-sharing arrangements with its independent factories, "strategic price increases," better product mix, and slightly favorable currency and freight. Tariffs were cited as a reason gross margin fell in every brand segment, including Teva.
For a company that sources heavily from Southeast Asia, losing only 0.2 points in a year of new US import duties is a contained hit. Management also notes that promotional activity rose only slightly from "exceptionally low levels" the year before, meaning most product still sold at full price.
Possible tariff refund, not yet counted. In February 2026 the US Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act (IEEPA). The subsequent 10-Q says Deckers paid about $120 million of IEEPA tariffs in total and began filing for refunds after June 30, 2026. None of that is recognized in the accounts, the net benefit could be smaller (because of cost-sharing with factories and income tax), and the fiscal 2027 outlook assumes no refunds. It is possible upside that is not in any figure here.
Brand profitability and costs
Segment operating income
FY2026
FY2025
YoY Change
FY2026 segment margin
HOKA
$911.0M
$848.5M
+7.4%
35.2% (38.0% prior)
UGG
$1,045.3M
$1,002.9M
+4.2%
38.2% (39.6% prior)
Other brands
$16.4M
$34.6M
-52.7%
11.2%
Segment margins are our calculation from 10-K segment income and net sales; they exclude $709.8 million of unallocated company-wide costs.
HOKA's sales grew 15.9% but its profit only 7.4%. The 10-K cites tariff-driven lower gross margins plus higher selling costs, including sales commissions, rent, headcount and marketing. Company-wide, selling, general and administrative (SG&A) expenses grew 11.0% to $1.89 billion, faster than sales, with increases of roughly $64 million in advertising and marketing, $59 million in IT, commissions and logistics fees, $37 million in rent and occupancy (more retail stores and warehouses), and $33 million in payroll.
The squeeze was sharper at the end of the year. According to the fourth-quarter earnings release (Exhibit 99.1 to the May 21, 2026 Form 8-K), Q4 sales rose 9.6% but operating income fell to $156.7 million from $173.9 million, and diluted EPS dropped to $0.96 from $1.00, as SG&A rose to $487.9 million from $405.8 million.
Inventory, cash and buybacks
Inventory was tightly managed. Year-end inventories were $487.0 million, down 1.7% even though sales rose 9.8%, and the earnings release notes that the figure already includes the cost of higher tariffs. Lean inventory lowers the risk of heavy discounting later.
Cash generation was strong. Operating cash flow rose 13.2% to $1.18 billion. The company ended the year with $1.91 billion in cash and no borrowings.
Buybacks nearly doubled. Deckers repurchased 10.5 million shares for $1.075 billion (average price $102.43), up from $567 million in fiscal 2025, equal to about 91% of operating cash flow. The diluted share count fell 4.5% to 145.8 million, which is why EPS grew 10.9% while net income grew 6.0%. On May 20, 2026 the board added $3.5 billion of buyback authorization, bringing the total available to about $4.84 billion.
Takeaway: Fiscal 2026 growth was real but narrow. International sales (+26.8%) and HOKA (+15.9%) did the work while US sales were flat, and tariffs, a shift toward wholesale and higher spending pushed operating margin down 0.5 points. Roughly 5 of the 10.9 points of EPS growth came from a smaller share count rather than higher profit, and management's fiscal 2027 plan leans on buybacks in the same way.
Fiscal 2027 outlook and the first quarter
Guidance. In its May 21, 2026 earnings release (8-K Exhibit 99.1), management guided fiscal 2027 sales to $5.86-$5.91 billion, about 7-8% growth, with HOKA up a low-double-digit percentage and UGG up a mid-single-digit percentage. It expected gross margin of about 56.5%, operating margin of about 21.5% and diluted EPS of $7.30-$7.45. That implies gross margin falling another 1.2 points and operating margin 1.6 points, with EPS growth of 4-6% again depending on buybacks worth about 80% of projected free cash flow. The outlook assumes no tariff refunds. In its July 23, 2026 release (8-K Exhibit 99.1) the company kept the sales range, raised its gross and operating margin expectations to "slightly better than" 56.5% and 21.5%, and lifted EPS guidance to $7.35-$7.50.
Q1 FY2027 (quarter ended June 30, 2026, from the Form 10-Q):
Metric
Q1 FY2027
Q1 FY2026
YoY Change
Net sales
$1,019.5M
$964.5M
+5.7%
HOKA net sales
$703.5M
n/a
+7.7%
UGG net sales
$278.0M
n/a
+4.9%
Wholesale / DTC net sales
$666.7M / $352.8M
n/a
+2.2% / +13.0%
Domestic / International
$517.4M / $502.1M
$501.3M / $463.3M
+3.2% / +8.4%
Gross margin
56.4%
55.8%
+0.6 pts
Operating margin
15.2%
17.1%
-1.9 pts
Net income
$130.0M
$139.2M
-6.6%
Diluted EPS
$0.94
$0.93
+1.1%
The first quarter reversed some of fiscal 2026's patterns. DTC outgrew wholesale, which helped gross margin rise despite tariffs, and US sales grew again (+3.2%). But HOKA's growth slowed to 7.7%, below its full-year low-double-digit target; the 10-Q attributes part of the softness to lower international wholesale sales from planned shipment-timing differences tied to last year's European warehouse transition. SG&A rose 12.7%, so operating income fell 6.0% and net income fell 6.6%. EPS still edged up, only because another $338 million of buybacks cut the share count. Inventory was $807.6 million versus $849.4 million a year earlier (per the July 23 earnings release), reflecting the usual seasonal build ahead of UGG's peak autumn and winter season.
Our view: Deckers is still growing faster than most footwear companies, with no borrowings and lean inventory, but it is trading margin for growth: management's own plan has operating margin stepping down toward the low 20s, and per-share growth now depends heavily on buybacks. The things to watch are whether HOKA gets back to low-double-digit growth in the rest of the year, whether US sales keep growing, and whether any of the roughly $120 million in IEEPA tariff refunds is actually collected, which would be a one-time gain outside guidance.