Deckers Brands, the parent company of popular footwear lines Hoka and Ugg, saw its stock tumble 15% on Friday after the company lowered growth forecasts for its two leading brands. The revised outlook highlights rising tariff costs and shifting consumer spending patterns that are beginning to impact demand.

Q2 Performance: Earnings Beat, Sales Guidance Falls Short

In fiscal second-quarter results, Deckers reported earnings of $1.82 per share, exceeding analysts’ expectations. However, its full-year revenue guidance of $5.35 billion fell short of Wall Street’s $5.45 billion forecast, signaling potential headwinds for the year ahead. Expected earnings per share of $6.30 to $6.39 came in roughly in line with the consensus of $6.32.

While Ugg boots outperformed forecasts in Q2, Hoka running shoes showed a slowdown, fueling investor concerns about Deckers’ flagship growth drivers. Together, Hoka and Ugg generate the majority of Deckers’ revenue, making their performance critical to the company’s overall health.

Hoka and Ugg Growth: Slower Momentum

The company now expects Hoka to grow in the low-teens percentage range for fiscal 2026, down from 24% growth in the prior year. Meanwhile, Ugg is projected to grow low to mid single digits, a decline from 13% growth last year.

Earlier in May, Deckers had forecast mid-teens growth for Hoka and mid-single digits for Ugg, prior to the introduction of U.S. tariffs under President Trump. At the time, the company had flagged potential cost impacts but could not predict the effect on consumer demand.

Finance chief Steven Fasching noted on the earnings call that tariff-driven price increases are now visibly affecting U.S. consumers. “As U.S. consumers face higher prices, we are seeing changes in their purchasing behavior, particularly in discretionary categories,” he said.

Tariffs and Inflation: Cost Pressures Mount

Deckers executives warned that tariffs could cost the company around $150 million this fiscal year. The company expects to offset approximately half of this impact through price adjustments and cost-sharing with manufacturing partners.

Despite these challenges, CEO Dave Powers emphasized the resilience of Deckers’ core brands. “While tariffs and inflation are creating near-term pressure, Hoka and Ugg continue to lead in brand heat and market share gains,” Powers said, signaling confidence in their long-term trajectory.

Investor Concerns and Stock Performance

Deckers’ stock has fallen more than 55% year-to-date, and the trimmed sales guidance has heightened investor concerns about slowing momentum for its top brands. Analysts note that any continued softness in Hoka and Ugg could put additional pressure on the company’s overall growth profile.

As the footwear giant navigates tariffs, inflation, and shifting consumer behavior, all eyes will remain on its ability to maintain market share while balancing cost pressures, pricing strategies, and long-term brand strength.