$DECK · DECKERS OUTDOOR CORP
Deckers Outdoor Corp filed its 10-Q for Q2 FY2027 (quarter ended September 30, 2026), reporting net sales of $1.481B (+3.5% YoY), net income of $313.1M (+16.8%), and diluted EPS of $2.31 (+26.9%). Gross margin expanded sharply to 60.5% from 56.2%, while the company repurchased $637.5M in stock over the six-month period, reducing shares outstanding by approximately 8.3%.
- Q2 net sales rose 3.5% YoY to $1.481B, with HOKA brand up 6.8% to $677.2M and UGG up 3.5% to $786.4M.
- Gross margin expanded 430 bps to 60.5% from 56.2%, driven by lower cost of sales which fell 6.6% despite revenue growth.
- Operating margin reached 26.3%, up from 22.8% a year ago, as operating income grew 19.3% to $389.5M.
- Diluted EPS of $2.31 beat prior-year $1.82 by 26.9%, amplified by share repurchases that reduced basic shares outstanding from 147.4M to 135.0M.
- International net sales grew 9.0% to $644.7M, outpacing domestic which was essentially flat at $835.8M.
DECK shares are up 2.65% in the regular session to $82.88, adding to a modest +0.05% move since filing. The market is rewarding the 430 bps gross margin expansion and 26.9% EPS beat, though the 3.5% top-line growth and DTC softness (-1.8%) may be capping enthusiasm.
Deckers is converting modest 3.5% revenue growth into 26.9% EPS gains through margin expansion and aggressive capital return — a playbook that works until it doesn't.
Deckers' 60.5% gross margin and 26.3% operating margin place it among the most profitable footwear companies, with HOKA's 6.8% growth continuing to outpace the broader athletic footwear category. The aggressive buyback program — repurchasing 6.5M shares for $637.5M in six months — mirrors capital-return strategies at mature premium-brand peers.
Tariffs and trade policy uncertainty remain a key risk, with the filing explicitly flagging US and international trade policies and retaliatory measures. The "Other brands" segment (Teva, etc.) collapsed 54.3% YoY to $17.0M, signaling potential brand rationalization pressure.