While you consider a number of the finest shares of the final technology, tech giants like these within the “Magnificent Seven” probably come to thoughts, however you is likely to be stunned to study that Deckers (NYSE: DECK), the maker of footwear manufacturers like HOKA and UGG, additionally deserves a spot on that checklist.
Since its IPO in 1993, the sneaker inventory is up 9,660%, greater than double the positive aspects of Nike throughout that point.
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Deckers owns smaller manufacturers, comparable to Teva, however Hoka and Ugg have carried out the closely lifting right here. Administration acquired each manufacturers of their infancy and constructed them into prime world footwear manufacturers via savvy design, advertising and marketing, and distribution, leading to monster returns for many who have held the inventory lengthy sufficient.
Nevertheless, extra just lately, the inventory has struggled. Like different attire shares, Deckers has confronted twin pressures from tariffs and weak client discretionary spending within the U.S. as customers deal with inflation and a weak labor market.
In consequence, Deckers is down 46% during the last yr, however the inventory soared on its third-quarter earnings report on Friday because the footwear maker stunned Wall Road, simply beating estimates on the highest and backside traces and elevating its steerage for the fiscal yr, sending the fill up 19%.
Picture supply: Deckers.
In a troublesome setting, Deckers simply topped Wall Road estimates in its third-quarter report, reporting income development of seven.1% to $1.96 billion, which in comparison with the consensus at $1.87 billion. Hoka gross sales soared, up 18.5% to $628.9 million, and Ugg was stable as properly, climbing 4.9% to $1.31 billion within the seasonally strongest quarter for the sheepskin boot model.
Margins remained robust with working earnings rising 8.3% to $614.4 million, giving it an working margin of 31%, and earnings per share rose 11% to $3.33, forward of expectations at $2.76.
Development was balanced throughout wholesale and direct-to-consumer channels, exhibiting an enchancment within the e-commerce enterprise, whereas home gross sales improved from a decline within the earlier quarter to 2.7% development, and worldwide gross sales have been up 15%. The weakest components of Deckers’ enterprise considerably improved, which is a brilliant signal for the long run.
Total, clients responded to newness in its product line, together with its line of Quill ballet sneakers and slip-ons from Ugg.
The robust outcomes led administration to boost steerage for the fiscal yr, projecting $5.4 billion-$5.425 billion in income with Hoka up by a mid-teens share and Ugg up by a mid-single-digit share.
It additionally referred to as earnings per share of $6.80-$6.85, up from earlier steerage of $6.30-$6.39, which compares to EPS of $6.33 in fiscal 2026.
Deckers’ inventory plunged a yr in the past after the corporate raised its steerage, however nonetheless disenchanted the market with its outlook. Since then, whereas its development price has slowed, the sentiment towards the inventory has been excessively destructive. Because the chart under reveals, Deckers has breezed previous earnings estimates in every of its final 4 quarters.
Quarter
Estimated EPS
Precise EPS
Shock
This fall 2025
$0.61
$1.00
65.1%
Q1 2026
$0.68
$0.93
36.6%
Q2 2026
$1.58
$1.82
15.1%
Q3 2026
$2.76
$3.33
20.5%
Information supply: Yahoo! Finance
As you may see, Deckers has made a behavior of crushing the analyst consensus as the corporate has crushed estimates by 26% during the last 4 quarters.
That sample appears more likely to proceed as analysts at the moment are calling for EPS within the present quarter to fall from $1 to $0.82 regardless of double-digit development from Hoka.
Moreover, Deckers stays very moderately priced, buying and selling at a price-to-earnings ratio of 17, particularly given its observe file of development and the S&P 500’s P/E ratio of round 28.
Looking forward to fiscal 2027, the robust Q3 outcomes bode properly for a stable yr and presumably an acceleration in development. Moreover, the corporate will profit from the $110 million headwind it confronted from tariffs rolling off within the comparability, and the profitable new product launches like Quill ought to repay into subsequent yr as properly.
Total, Deckers is executing successfully in a difficult setting, and the inventory trades at a pointy low cost to the broad market. It seems like a wise purchase.
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Jeremy Bowman has positions in Nike. The Motley Idiot has positions in and recommends Deckers Outside and Nike. The Motley Idiot has a disclosure coverage.
