Deckers beats profit estimates on direct-to-consumer strength, lifts annual forecast (updated)
UPDATE 2-Deckers beats profit estimates on direct-to-consumer strength, lifts annual forecast Rewrites throughout, adds analyst comment in paragraph 5
By Koyena Das
July 23 (Reuters) - Deckers Outdoor DECK.N on Thursday beat Wall Street estimates for first-quarter profit and raised its annual earnings forecast, as demand for its Hoka and UGG footwear brands and growth in its higher-margin direct-to-consumer business boosted profitability.
Shares of the company fell 8% in after-market trading after the company raised its fiscal 2027 profit outlook by just 5 cents at the midpoint, while maintaining its annual sales forecast. First-quarter revenue of $1.02 billion was also broadly in line with analysts' expectations.
New product launches and expansion across both wholesale and direct-to-consumer channels have helped Deckers attract higher-income shoppers who remain willing to spend despite broader economic pressures, allowing it to outperform many discretionary retail peers.
"The company's ability to increase margins shows that brand desirability remains high," said eMarketer analyst Rachel Wolff.
Gross margin for the quarter was 56.4%, compared to 55.8% from last year.
Deckers Outdoor has continued to gain market share in the athletic footwear market, as larger rivals such as Nike NKE.N grapple with softer demand for legacy sneaker lines including Dunk and Air Jordan.
The company expects earnings per share between $7.35 and $7.50 for fiscal year 2027, compared with its previous forecast of $7.30 to $7.45.
Sales at its Hoka brand rose 7.7% during the first quarter, while sales at the UGG brand increased 4.9%.
The company's first-quarter direct-to-consumer net sales increased 8.4% compared to 0.5% last year.
It earned a quarterly profit of 94 cents per share in the quarter ended June 30, compared with analysts' estimates of 87 cents per share.
Sales for the quarter increased 5.7% to $1.02 billion.
(Reporting by Koyena Das in Bengaluru; Editing by Shailesh Kuber)
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