On a constant currency basis, net sales rose by 6.8%. The company's financial results for the quarter, which ended on 31 December 2025, also showed an improvement in diluted earnings per share, rising from $3.00 to $3.33.
The HOKA running shoes brand contributed significantly to this growth with an 18.5% increase in revenue, totalling $628.9m, while the flagship UGG brand sales rose by 4.9% to reach $1.305bn. However, the company's other brands experienced a 55.5% decline in sales, falling to $23.2m, partly due to the phase-out of Koolaburra brand standalone operations.
In terms of distribution channels, wholesale net sales climbed by 6% to $864.6m, and direct-to-consumer (DTC) net sales increased by 8.1% to $1.093bn, with DTC comparable net sales rising by 7.3%. Geographically, domestic sales experienced a moderate increase of 2.7%, totalling $1.2bn, while international sales saw a more substantial growth of 15%, reaching $756.7m.
The company reported a slight decrease in gross margin from 60.3% to 59.8%. Selling, general and administrative expenses rose to $557m compared to $535.3m from the previous year. Operating income improved from $567.3m to $614.4m.
On the balance sheet at 31 December 2025, Deckers Brands held cash and cash equivalents of $2.087bn and inventories amounting to $633.5m, reflecting incremental tariffs' impact. The company maintained its position of having no outstanding borrowings.
Regarding capital allocation strategy during the third fiscal quarter, Deckers Brands repurchased approximately 3.8m shares of its common stock for a total expenditure of $348.5m at an average price of $92.36 per share. Over the initial nine months of fiscal year 2026, the company bought back around eight million shares for a cumulative sum of $813.5m at an average price of $101.44 per share.
For its full fiscal year ending 31 March 2026, Deckers Brands released an updated financial outlook projecting net sales between $5.400bn and $5.425bn, with anticipated mid-teens percentage growth for HOKA and mid-single-digit increases for UGG compared to last year’s figures.
During the earnings call, Stefano Caroti, CEO of Deckers Brands, attributed these positive results to strategic initiatives and effective marketplace management that bolstered both HOKA and UGG brands’ performances in US and international markets, a growth he described as particularly significant for HOKA.
Caroti said: “Our strategic marketplace management fuelled balanced growth in DTC and wholesale, inclusive of continued international momentum as well as healthy growth in the US across both channels. UGG and HOKA each delivered high levels of full-price selling, resulting in strong gross margins. We are on track to deliver another incredible year, with profitable growth at two premium and differentiated brands that operate in expanding segments of the global marketplace.”
CFO Steven J. Fasching discussed Deckers Brands' focus on balancing wholesale and direct-to-consumer channels to drive sustainable growth while emphasising the importance of managing inventory strategically and leveraging DTC business operations to enhance consumer engagement and maintain high levels of full-price selling.
FY26 outlook
Looking ahead into FY2026, Fasching acknowledged potential challenges such as macroeconomic conditions including consumer confidence fluctuations, discretionary spending variations, inflationary pressures and foreign currency changes but expressed confidence in continuing momentum through robust pricing strategies that mitigate tariffs' impact and ensure a strong operating margin.
The company’s effective tax rate is expected to remain at approximately 23%, with operating margin projected at around 22.5%. Diluted earnings per share are forecasted between $6.80 and $6.85 for FY2026. These figures include anticipated impacts from further share repurchases in the fourth quarter.
Overall, Deckers Brands anticipates exceeding $1bn in share repurchases by the end of fiscal year 2026 as part of its ongoing capital return strategy aimed at enhancing shareholder value amidst challenging economic landscapes globally.
