Deckers Outdoor Corp "Why We See 57% Price Target Upside and Continue to..."

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Deckers Outdoor Corp "Why We See 57% Price Target Upside and Continue to..."

Deckers Outdoor Corp UBS Research

UBS Research THESIS MAP Thesisa guideMapto our thinking and what´s where in this report

Pivotal Questions Q: How much can the global footwear industry grow?

We expect it to rise at a 3% to 4% CAGR, highly skewed to sports footwear. Athleisure should

continue driving this category at a compelling mid- to high-single-digit annual pace, underpinned by

leading industry players like Nike pushing for innovation and prevailing themes like casualization and

healthy lifestyles. Deckers should benefit from this trend as athleisure covers sports (i.e. HOKA brand)

and comfort shoes (i.e. UGG).

Q: Can Hoka return to delivering +DD% direct-to-consumer (DTC) channel sales growth?

Yes. While choppiness in the transition from the Bondi 9/Clifton 10 franchises in the US and price

increases related to new US tariff policies weighed on US DTC sales growth in FY26, we believe Hoka

DTC sales growth rate will accelerate in FY27 to the +LDD% range as Hoka expands further into the

training, lifestyle, and apparel categories, and continues to expand its global retail footprint. This

+LDD% rate reflects +MSD% growth in the US and greater than +20% growth in international

markets, led by very robust growth in APAC.

Q: Can DECK continue to deliver industry-leading operating margins?

Yes. We expect EBIT margins hover in the 22% range through FY30E. DECK's margins should benefit

from a mix shift to DTC given higher digital sales and SG&A leverage in the medium term as HOKA

gains scale, partially offset by tariff-related headwinds.

UBS VIEW We rate DECK Buy. We think Deckers' sales and EPS outlook justify a high valuation. We estimate its