Why Deckers Outdoor Stock Crashed Today

Deckers Outdoor (NYSE: DECK) stock tumbled 12.6% through 2:10 p.m. ET Friday despite crushing on its earnings report last night.

Heading into the report, analysts forecast Deckers would earn only $1.58 per share on $1.4 billion in sales in its fiscal second quarter 2026. In fact, Deckers reported profits of $1.82 per share on those same revenues.

Image source: Deckers Outdoor.

Deckers Q2 earnings

Deckers grew Q2 2026 revenue 9% year over year, and its earnings surged 14%. HOKA and UGG brands both delivered double-digit sales growth (11% and 10%, respectively), and CEO Stefano Caroti expressed confidence that Deckers will "achieve our fiscal year 2026 outlook."

Gross margin inched up 30 basis points to 56.2%. Selling, general, and administrative expenses (SGA) rose faster than sales growth (up 11%). Still, Deckers found a way to make the numbers work and keep overall net profit growing faster than sales.

Is Deckers stock a buy?

Where Deckers seems to have disappointed investors is on guidance. Management forecast only 56% gross margins through the end of the year, less than in Q2. Worse, Deckers plans to spend 34.5% of sales on SGA this year -- up from the 33.3% spent in Q2. This will weigh on profits, and so management said earnings will probably range from $6.30 to $6.39 this year.

Strangely, though, that still works out to about $6.35 at the midpoint -- more than the $6.32 per share that analysts were forecasting for this year's profit.

So why the sell-off? Well, $6.35 would be less than 1% earnings growth from the $6.33 per share Deckers earned last year. For a stock trading for 14 times trailing earnings, investors presumably wanted to see Deckers promise more earnings growth.

Deckers didn't do that -- and so investors are selling Deckers stock.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Deckers Outdoor. The Motley Fool has a disclosure policy.