Deckers Outdoor Stock Plunges. This Analyst Is Worried About Ugg Boots.

Hoka running shoes on display in Southlake, Texas. (Trong Nguyen/Dreamstime)

Key Points

• Deckers Outdoor shares dropped 13% to $89.51 after the company issued weaker-than-expected sales guidance.
• Direct-to-consumer Ugg sales decreased 10% from a year ago, which an analyst noted could weigh on shares.
• Deckers reported a profit of $1.82 per share and net sales of $1.43 billion, exceeding analyst estimates.

Soft sales of Ugg Boots direct to the consumer could weigh on Deckers Outdoor shares, warned Jefferies analyst Ashley Helgans in a note late Thursday.

The stock was tumbling on Friday after the shoe designer issued weaker-than-expected sales guidance, which it blamed on tariffs.

Shares dropped 13% to $89.51 in early trading. The S&P 500 was 0.8% higher.

The move lower came even though Deckers, the brand behind Hoka running shoes and Ugg sheepskin boots, beat Wall Street’s earnings and revenue targets for the quarter ended Sept. 30.

After Thursday’s closing bell, the company reported a profit of $1.82 a share, as net sales climbed 9.1% from a year ago to $1.43 billion. Analysts were estimating a profit of $1.58 a share on net sales of $1.42 billion, according to FactSet.

Guidance looked weak, though. Deckers expects sales of $5.35 billion for its current fiscal year, ending in March, which came in below the Street’s expectations. CEO Stefano Caroti said he’s expecting a “more cautious consumer” over the period, due to tariffs causing price increases.

Helgans said an important factor that could weigh on shares was soft direct-to-consumer Ugg sales, which dropped 10% from a year ago. “Lower UGG brand momentum could result in even more promotions, a key component of [the] bear case as operating margin percentages revert,” she wrote in a research note.

Helgans, who rates Decker at a Hold with a $102 price target, noted that Hoka gained market share in U.S. road running, even if sales of the shoes fell a little short of the Street’s expectations.

As of Thursday’s close, Deckers stock was down 50% for the year, tumbling amid worries that macroeconomic uncertainty will weigh on demand for sneakers. The S&P 500 is up 15% in 2025.

Write to George Glover at george.glover@dowjones.com