Hoka Shoes seen in store on February 1, 2023 in Krakow, Poland.
Jakub Porzycki | Null Photo | Getty Images
shoe manufacturer stocks deckers brand Shares plunged 15% on Friday after the company lowered its sales outlook for Hoka and Ugu, two of its growth brands, over concerns that tariffs were leading to a decline in demand.
Up-and-coming running shoe brand Hoka is expected to grow in the low teens in fiscal 2026, following 24% growth in the same period last year. Meanwhile, boot brand Ugg is expected to grow in the low to mid-single digits, following 13% growth in the same period last year.
The company said in May that it expected fiscal year 2026 growth for Hoka and Ag to be in the mid-teens and mid-single digits, respectively, but it denied that forecast, saying it was made before President Donald Trump’s tariffs. At the time, the company quantified the expected cost impact, but said it had not yet been determined how the new tariffs might affect demand.
The impact of tariffs and price hikes on demand was now clearer, Finance Director Stephen Fassing said in reporting second-quarter results on Thursday.
“Part of the framework that we put out earlier this year was actually how we would see some growth if the tariffs didn’t impact consumers, and we still believe that, right? But we know and we’re now seeing some impact on U.S. consumers,” Fassing told analysts on the company’s conference call. “So U.S. consumers are starting to see price increases. That’s impacting their purchasing behavior within the consumer’s discretion.”
He added that the guidance is not a huge departure from what the company originally thought, but acknowledged there has been “some downgrade” to expectations.
The slowing pace of growth and lower sales outlook for Deckers’ two top-performing lines suggests the two brands may be losing the momentum they’ve had over the years. Hoka and Ugg together account for the majority of Deckers’ revenue and have played a key role in offsetting weaknesses in other categories.
But CEO Dave Powers downplayed concerns about a long-term economic slowdown, telling investors that both brands continue to do well among core consumers.
“We are confident in the long-term trajectory of our portfolio,” Powers said. “While tariffs and inflation are a near-term pressure, Hoka and Ugg continue to lead in brand popularity and market share gains across categories.”
Excluding Hoka and Agu, Deckers’ full-year earnings outlook was below analysts’ expectations. LSEG said the company’s revenue for fiscal 2026 is expected to be about $5.35 billion, falling short of Wall Street’s forecast of $5.45 billion. LSEG said it expects earnings per share to be between $6.30 and $6.39, roughly in line with its $6.32 per share forecast.
Fassing warned on a conference call with analysts that tariff costs could total about $150 million this year. Executives said they expect to offset about half of those costs through price adjustments and cost-sharing with factory partners.
Deckers’ stock price has fallen more than 55% since the beginning of the year, with investors nervous about signs of slowing demand.
