Deckers Outdoor crashed Friday as the footwear maker reported slowing Hoka brand sales growth and guided lower due to tariff uncertainties. Deckers stock plunged.
The maker of Hoka sneakers and Ugg boots said it won't offer regular guidance, but said it expects earnings per share of 62-67 cents a share in the June-ended fiscal first quarter. That's below the consensus estimate of 68 cents in FactSet's survey.
Deckers also forecast quarterly sales of $890 million to $910 million, roughly in line with the consensus estimate of $901.5 million.
Chief Financial Officer Steve Fasching said in a call with analysts that based on current tariffs, the company expects up to $150 million in additional costs of goods sold for the fiscal year, and a yet-undetermined impact on demand.
Fasching, according to a transcript from FactSet, added that the company faces other headwinds. Those include higher levels of promotions vs. exceptionally low levels, higher costs from upgraded materials and higher ocean freight rates.
"We believe these headwinds can be fractionally offset by selective and staggered price increases in the U.S. and partial cost sharing with factory partners," Fasching said.
Deckers Stock Fells Even As Earnings Top
Deckers' fiscal Q4 sales rose 6.5% to $1.022 billion, while earnings increased 22% to $1 per share. Both were above FactSet estimates. By brand, Hoka sales rose 10% year over year and Ugg 3.6%. But other brands' sales fell 6.3%.
Telsey Advisory downgraded Deckers stock to market perform from outperform and slashed the price target to 120 from 240. Analyst Dana Telsey said growth in the Hoka brand slowed faster than expected, a summary from TheFly.com says.
Barclays, Wells Fargo, Raymond James and other analysts cut their price targets on Deckers stock. UBS, however, raised its price target to 169 from 158, reports said.
Deckers Gaps Down
Deckers stock gapped down 19.8% to 101.10 on Friday.
At session low of 96.10, Deckers was headed for its worst one-day loss since April 27, 2012, when they fell 25.4%, according to Dow Jones Market Data.
Friday was the second straight time that Deckers sold off after an earnings report. On Jan. 31, the stock plunged 20.5% in huge volume after management issued light sales guidance. Shares gapped below the 50-day moving average and have trended lower since then. Just before that earnings report, DECK stock hit a record 223.98.
Deckers stock's Composite Rating was a bullish 98 until that report, but has fallen to 68 today.
Meanwhile, rival On Holding continued to hold up well. The stock fell as much as 5% at Friday's open but closed down 0.7%. The stock is forming a handle with a 60.42 buy point. Its Composite Rating is 93.
