Deckers Outdoor (DECK) PT Lowered to $105 at Telsey

Telsey analyst Dana Telsey lowered the price target on Deckers Outdoor (NYSE: DECK) to $105.00 (from $120.00) while maintaining a Market Perform rating.

The analyst commented: "Overall, DECK delivered better than expected results in the fiscal second quarter with better-than-expected sales and gross margin along with in-line expense deleverage delivering the earnings upside. Within the topline, both HOKA and UGG sequentially decelerated in the quarter, though UGG outperformed market expectations, while HOKA was in-line. By channel, DTC comps declined, with overall DTC sales falling for just the second time in the last five and a half years, while sales domestically contracted for the third consecutive quarter, highlighting the challenges to the US business in the current operating environment. Below the topline, gross margin came in well ahead of expectations driven by price increases, favorable mix, and beneficial FX, partially offset by tariffs and channel mix pressure. Due to efforts to bring in inventory earlier ahead of tariff increases, the pressure in F2Q was less than expected, though the expectations for the back half remain unchanged. In all, management moderated its total unmitigated tariff impact on COGS to $150MM (from $185MM prior), though the company now expects to offset $75MM-$95MM of this (from $75MM prior) through price increases and cost-sharing efforts with factory partners. Encouragingly, DECK reverted back to its pre-FY26 practice of issuing guidance on an annual basis. That said, the full year sales guide came in below expectations, and, while the FY26 EPS outlook brackets the prior consensus, this implies a softer back half given the ~$0.30 beat (at the midpoint of guide) in F2Q. Therefore, given the softer implied 2H guide, a still lagging DTC channel, and slowing HOKA growth as well as margin pressure from tariffs and promotions in a still uncertain macro-operating environment, we maintain our Market Perform rating. Given the more cautious near-term expectations, we are moderating our price target to $105 from $120, which assumes a 14.5x multiple on our two-year forward EPS estimate of $7.26 vs. the recent NTM multiple of 15.0x."

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