Deckers Outdoor (DO2) Q2 2027 Earnings Report

The call was broadly positive, supported by 3.5% revenue growth, strong HOKA and UGG wholesale performance, healthy full-price selling, improved underlying margins, 11.5% adjusted EPS growth, significant share repurchases, and a raised full-year EPS outlook. The main challenges were softer U.S. DTC trends, increased promotional pressure, consumer spending caution, EMEA logistics disruptions, selected HOKA product misses, and a more measured near-term revenue outlook. Management remained confident in the long-term health and growth potential of both brands.

For fiscal year 2027, total company revenue is now expected to be in the range of $5.7 billion-$5.725 billion, with HOKA now increasing by a high single-digit percentage versus last year and UGG now increasing by a low single-digit percentage; gross margin is expected to be approximately 58.5%, SG&A approximately 35.5% of revenue, operating margin approximately 23%, effective tax rate approximately 23%, and diluted earnings per share in the range of $7.80-$7.95, including IEEPA net tariff refunds and associated interest received to date and assuming share repurchases with a value of $1 billion in fiscal year 2027. Excluding the benefit of IEEPA net tariff refunds, gross margin would be increasing to 57% and full-year operating margin would still be slightly better than 21.5%. For the third quarter, total company revenue growth is expected to be in the low single digits, with UGG expected to grow low single digits and HOKA anticipated to deliver low to mid-single digits, while diluted EPS is expected to be in the range of $3.52-$3.60, including an IEEPA net tariff refund benefit of approximately $0.24; third-quarter gross margin is implied to be just north of 60, with a little more than 200 basis point IEEPA tariff refund impact offset by 150 related to mostly freight with a little bit of promo.