Deckers Softer Sales Outlook Raises Growth Durability Concerns, Truist Says

07:33 AM EDT, 10/23/2026 (MT Newswires) -- Deckers Outdoor's (DECK) sales guidance cut amid an increasingly promotional US marketplace has fueled growth durability concerns, though a strong margin outlook shows the company's commitment to full-priced selling, Truist Securities said in a note. The company now expects sales of $5.7 billion to $5.73 billion for fiscal 2027, it said late Thursday, down from its prior projections of $5.86 billion to $5.91 billion. The consensus on FactSet is for $5.81 billion. "A promotional US footwear marketplace is driving a softer topline outlook and fueling bear concerns around category saturation/long-term growth durability," Truist said in its Thursday note. Shares of the company were down 6.8% in the most recent premarket activity. The stock has lost 18% so far this year. Chief Executive Stefano Caroti said during a conference call that the company saw promotional activity in the US increase throughout the quarter, especially in athletic footwear, impacting its e-commerce performance as it looked to "maintain full price discipline," according to a FactSet transcript. Excluding the benefit of the International Emergency Economic Powers Act tariff refunds, the company still expects its operating margin to be slightly better than 21.5%, Chief Financial Officer Steven Fasching said during the earnings call. The reaffirmation of the operating margin outlook without tariff-related benefits reflects senior management's commitment to long-term brand health and full-priced sales, which is prudent in the current environment, Truist said. Deckers now anticipates gross and operating margins of about 58.5% and 23% for the fiscal year, respectively, up from previous forecasts of slightly better than 56.5% and 21.5%. The revised guidance includes $88 million in tariff refund-related benefits, Fasching told analysts. Per-share earnings came in at $2.31 for the second quarter, up from $1.82 a year earlier, defying the average analyst estimate for a decrease to $1.79. The result included a $0.28 benefit from tariff refunds, the company said. Gross margin increased to 60.5% from 56.2% in the 2025 quarter. Net sales rose 3.5% year over year to $1.48 billion. The consensus on FactSet was $1.51 billion. "While revenue came in slightly below our expectations, our continued focus on full price selling and expense management contributed to exceptional gross margin and earnings per share performance," Fasching said on the call. For fiscal 2027, EPS is anticipated to come in between $7.80 and $7.95, up from Deckers' prior projections of $7.35 to $7.50. The Street is looking for $7.63. For the third quarter, the company sees EPS at $3.52 to $3.60 on low-single-digit revenue growth, Fasching said. The consensus on FactSet is for EPS of $3.66. Earlier in October, athletic apparel and footwear giant Nike (NKE) reported fiscal first-quarter revenue below Wall Street's estimates. Crocs (CROX) and Vans owner VF (VFC) are scheduled to release their latest financial results later this month.