DECK

Cyclical

Deckers Brands

Price Chart

Market Data

Financials

XBRL · SEC EDGAR

2008–2025(17yr)

Revenue

Net Income

Free CF

Metric	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$689.4M	$813.2M	$1.0B	$1.4B	$1.4B	$1.6B	$1.8B	$1.9B	$1.8B	$1.9B	$2.0B	$2.1B	$2.5B	$3.2B	$3.6B	$4.3B	$5.0B	+16.3%
Gross Profit	$305.3M	$371.1M	$502.9M	$679.0M	$632.2M	$736.5M	$878.1M	$846.7M	$835.2M	$931.6M	$1.0B	$1.1B	$1.4B	$1.6B	$1.8B	$2.4B	$2.9B	+21.0%
Gross Margin	44.3%	45.6%	50.2%	49.3%	44.7%	47.3%	48.3%	45.2%	46.7%	48.9%	51.5%	51.8%	54.0%	51.0%	50.3%	55.6%	57.9%	+2.2pp
Operating Income	$116.9M	$181.2M	$249.1M	$284.8M	$186.9M	$207.9M	$224.4M	$162.1M	-$1.9M	$222.6M	$327.3M	$338.1M	$504.2M	$564.7M	$652.8M	$927.5M	$1.2B	+27.1%
Operating Margin	17.0%	22.3%	24.9%	20.7%	13.2%	13.4%	12.4%	8.6%	-0.1%	11.7%	16.2%	15.9%	19.8%	17.9%	18.0%	21.6%	23.6%	+2.0pp
Net Income	$73.9M	$116.8M	$158.2M	$201.9M	$129.0M	$145.7M	$161.8M	$122.3M	$5.7M	$114.4M	$264.3M	$276.1M	$382.6M	$451.9M	$516.8M	$759.6M	$966.1M	+27.2%
Net Margin	10.7%	14.4%	15.8%	14.7%	9.1%	9.4%	8.9%	6.5%	0.3%	6.0%	13.1%	12.9%	15.0%	14.3%	14.2%	17.7%	19.4%	+1.7pp
Free Cash Flow	$31.1M	$171.8M	$117.4M	—	—	—	—	$60.5M	$154.8M	$292.5M	$330.4M	$253.9M	$564.0M	$121.3M	$456.4M	$943.8M	$958.4M	+1.5%
FCF Margin	4.5%	21.1%	11.7%	—	—	—	—	3.2%	8.6%	15.4%	16.4%	11.9%	22.2%	3.9%	12.6%	22.0%	19.2%	-2.8pp
EPS (Diluted)	$1.87	$2.96	$4.03	$5.07	$3.45	$4.18	$4.66	$3.70	$0.18	$3.58	$8.84	$9.62	$13.47	$16.26	$19.37	$29.16	$6.33	-78.3%

Cash & Equiv.$1.9B

3 min read

1. THE BIG PICTURE

Deckers Brands has successfully evolved from a niche player into a high-margin powerhouse by pairing the rapid scaling of HOKA with the "highly resilient" UGG brand (10-K Item 1). Its financial profile—characterized by the highest operating and free cash flow margins among its peers—reveals a business model that is currently extracting maximum value from the premium footwear segment despite broader retail headwinds.

2. WHERE THE RISKS HIT HARDEST

Deckers Brands’s "omni-channel integration" and retail expansion (10-K Item 1) are directly threatened by "rapid changes in fashion tastes" (10-K Item 1A). If HOKA or UGG lose their status as "lifestyle and fashion market leaders," the fixed costs of company-owned e-commerce and retail stores could quickly turn from a loyalty-building asset into a margin-eroding liability. Furthermore, the "substantial regional presence" in Southeast Asia (10-K Item 1) is a double-edged sword; while it ensures "predictability of material availability," the concentration of production in Vietnam (10-K Item 1A) means any local labor or geopolitical disruption would immediately halt the supply of the premium products that drive its 58.5% gross margins (XBRL).

3. WHAT THE NUMBERS SAY TOGETHER

While Deckers Brands maintains a 16.3% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth rate—the highest in its peer group—the most recent quarter showed a deceleration to 7.1% (8-K). This divergence is largely a result of the strategic "brand-focused resource allocation," which includes the deliberate phase-out of the Koolaburra brand, where sales fell 55.5% (8-K). Despite this shift, Deckers Brands maintains a 27.1% operating margin, far exceeding Nike’s 8.1% (XBRL). Deckers Brands converts 33.8% of its revenue into free cash flow, providing the capital for a 5.6% buyback yield, which is the second-highest among its peers (XBRL). Short interest remains low at 3.8% of the float, suggesting that market sentiment is not currently betting on a significant fashion-driven reversal (Yahoo Finance).

4. IS IT WORTH IT AT THIS PRICE?

At 14.4x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, Deckers Brands is "attractively valued," trading at a 37% discount to the peer median of 22.7x (XBRL). The market is currently pricing in approximately 4.0% long-term growth (CAPM analysis). This appears conservative given that Deckers Brands is delivering 16.3% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth and expects HOKA to continue growing in the "mid-teens" through fiscal 2026 (8-K). The primary risk that could justify this discount is "economic sensitivity," as recessionary concerns or inflation could force Deckers Brands to use "margin-eroding markdowns" to move premium-priced inventory (10-K Item 1A). However, the current valuation does not seem to fully account for Deckers Brands's superior cash generation and its $1.7 billion net cash position (XBRL).

5. WHAT WOULD CHANGE THIS VIEW?

Cautious if HOKA revenue growth falls below the "mid-teens" guidance (8-K), suggesting the brand has reached a saturation point or is losing market share to "newer market entrants" (10-K Item 1A).
Cautious if gross margins drop significantly below the projected 57% (8-K), indicating that "intense competition" is stripping Deckers Brands of its pricing power.
Constructive if the "brand-focused model" successfully scales "Other brands" like AHNU (10-K Item 1), diversifying the revenue base beyond the UGG/HOKA duopoly.

6. BOTTOM LINE

Structural Advantage: Deckers Brands maintains a dual-engine portfolio of "highly resilient" fashion (UGG) and high-performance innovation (HOKA), supported by an omni-channel DTC model that captures full retail margins. Bottom Line: Deckers Brands is a best-in-class operator trading at a significant discount to peers, offering superior growth and cash generation for a price that assumes a sharp deceleration.

Source: Synthesis · LLM Analysis

4 min read

1. Top 5 Material Risks

Consumer Preference Shifts: The footwear and apparel industry is subject to rapid changes in fashion tastes; if Deckers Brands fails to anticipate these trends or if new product models fail, Deckers Brands risks decreased revenues and a tarnished brand image (10-K Item 1A).
Economic Sensitivity: Sales of UGG and HOKA products are highly dependent on consumer confidence and discretionary spending; recessionary concerns, inflation, and unemployment can force Deckers Brands to reduce prices or increase promotional expenses to maintain demand (10-K Item 1A).
Intense Competition: Deckers Brands faces pressure from competitors with greater financial and technological resources, which can lead to pricing pressure and the need to dispose of excess inventory at reduced prices (10-K Item 1A).
Seasonality and Inventory Management: The extended design and manufacturing cycle requires Deckers Brands to make production decisions months in advance; overestimating demand leads to significant markdowns, while underestimating demand results in lost sales and strained customer relationships (10-K Item 1A).
Supply Chain and Manufacturing Concentration: Most production is outsourced to independent manufacturers in Southeast Asia, primarily Vietnam; any disruption due to natural disasters, geopolitical tensions, or labor issues prevents Deckers Brands from filling orders and harms customer relationships (10-K Item 1A).

2. Company-Specific Risks

Sheepskin Dependency: A significant portion of UGG products relies on sheepskin sourced from Australia and processed by two tanneries in China; any supply shortage or legal/social impediment to using animal products could materially harm the business (10-K Item 1A).
Customer Concentration: While no single customer accounted for 10% or more of total net sales in fiscal year 2025, the top ten customers represented 23.7% of total net sales, and one customer accounted for 13.6% of trade accounts receivable, net (10-K Item 1A).
Geographic Location of Headquarters: The location of the domestic headquarters in Goleta, California, makes it difficult to attract qualified talent compared to more prominent commercial centers (10-K Item 1A).
Warehouse Management Systems: Deckers Brands relies on complex warehouse management systems in Moreno Valley, California, and Mooresville, Indiana; failure of these systems or disruptions in the transition of international 3PL partners could result in shipment delays and lost sales (10-K Item 1A).

3. Regulatory/Legal Risks

Intellectual Property Challenges: Deckers Brands faces ongoing litigation regarding the "UGG" trademark; while successful in the US, China, and other regions, a loss in Australia demonstrates the risk of trademark invalidation, which could lead to intensified competition and reduced sales (10-K Item 1A).
Data Privacy Compliance: Deckers Brands is subject to various global privacy laws, including the California Consumer Privacy Act, the EU’s General Data Protection Regulation, and China’s Personal Information Protection Law; violations could result in civil or criminal penalties (10-K Item 1A).
Global Tax Regulations: The adoption of the 15% global minimum tax under the OECD’s Pillar Two rules may adversely affect income tax expense and capital allocation, though it did not have a material impact on the fiscal year 2025 consolidated financial statements (10-K Item 1A).

4. Financial Impact Map

Consumer Preference Shifts → Net Sales → Revenue decrease if products fail to gain market acceptance. Economic Sensitivity → Operating Performance → Reduced profitability due to increased marketing and promotional expenses. Intense Competition → Gross Margin → Pressure to reduce product pricing to compete with excess inventory disposals by competitors. Seasonality and Inventory Management → Gross Margin → Significant markdowns and reduced margins if demand is overestimated. Customer Concentration → Trade Accounts Receivable, Net → Risk of inability to timely collect amounts owed from the customer representing 13.6% of the balance.

Source: 10-K Item 1A · LLM Analysis