DECKERS BRANDS: SECOND-QUARTER NET SALES ROSE 3.5% TO $1,480.6M; WITHOUT A $46.0M TARIFF REFUND THE OPERATING MARGIN ROSE 38BP, NOT 348BP
By Pau Almar · Published
Q2 FY2027 · 22 OCTOBER 2026
Deckers reported second-quarter net sales of $1,480.6m against $1,430.8m, up 3.5% and 2.8% in constant currency. Gross margin was 60.5% against 56.2%, operating income $389.5m against $326.5m and diluted EPS $2.31 against $1.82. The company states that IEEPA tariff net refunds of $46.0m reduced cost of sales and are worth about 310bp of gross and operating margin and $0.28 of EPS.
Removing the refund, gross margin was 57.4%, up 117bp, operating income $343.5m, up 5.2%, and EPS $2.03, up 11.5%. Selling, general and administrative expenses rose 5.9% to $505.7m, faster than sales, and took 80bp of margin.
// KEY NUMBERS
Q2 FY2027 · Three months to 30 September 2026
| Revenue | USD 1,480.6m |
|---|---|
| Reported growth | +3.5% |
| Constant-currency growth | +2.8% |
| Gross margin | 60.5% |
| Operating margin | 26.3% |
| Like-for-like | −6.4% |
| Net income | USD 313.1m |
HOKA grew 6.8% to $677.2m and UGG 3.5% to $786.4m; the other brands lost $20.2m, which the company ties to the phase-out of Koolaburra. Wholesale rose 5.5% to $1,093m and direct-to-consumer fell 1.8% to $387.5m, with comparable DTC down 6.4%. International sales rose 9.0% and domestic sales fell 0.4%.
The company bought back $299.3m, 96% of the quarter's net income, and cash fell to $1,209.7m with no borrowings. The diluted share count fell 8.4% to 135.3m. Full-year guidance is $5.700bn to $5.725bn of sales and $7.80 to $7.95 of EPS, of which about $0.52 is refunds.
The third-quarter release will show whether comparable DTC sales decline a second time after -6.4%, SG&A as a percentage of sales against the prior-year quarter, and gross margin excluding any further tariff refund against a rate near 57%.
Source: Deckers Brands, Exhibit 99.1 to Form 8-K: Deckers Brands Reports Second Quarter Fiscal Year 2027 Financial Results (22 October 2026) ↗
Analysis by Pau Almar, VGR.
VGR analysis is an independent commercial reading of publicly disclosed company information, written from the perspective of a fashion retail sector operator. It is not investment research and it is not advice to buy, sell or hold any security. VGR is not a regulated financial adviser. Figures are taken from official company materials; figures derived by VGR are labelled as such. Readers should reach their own conclusions and take professional advice where appropriate.