Footwear and apparel conglomerate Deckers (NYSE:DECK) announced better-than-expected revenue in Q2 CY2025, with sales up 16.9% year on year to $964.5 million. On the other hand, next quarter’s revenue guidance of $1.4 million was less impressive, coming in 99.9% below analysts’ estimates. Its GAAP profit of $0.93 per share was 36.6% above analysts’ consensus estimates.
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Deckers (DECK) Q2 CY2025 Highlights:
- Revenue: $964.5 million vs analyst estimates of $899.8 million (16.9% year-on-year growth, 7.2% beat)
- EPS (GAAP): $0.93 vs analyst estimates of $0.68 (36.6% beat)
- Revenue Guidance for Q3 CY2025 is $1.4 million at the midpoint, below analyst estimates of $1.40 billion
- EPS (GAAP) guidance for Q3 CY2025 is $1.53 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 17.1%, up from 16.1% in the same quarter last year
- Constant Currency Revenue rose 16.3% year on year (23% in the same quarter last year)
- Market Capitalization: $16.15 billion
“HOKA and UGG outperformed our first quarter expectations, with robust growth delivering solid results to begin fiscal year 2026,” said Stefano Caroti, President and Chief Executive Officer.
Company Overview
Established in 1973, Deckers (NYSE:DECK) is a footwear and apparel conglomerate with a portfolio of lifestyle and performance brands.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Deckers grew its sales at a solid 19.1% compounded annual growth rate. Its growth beat the average consumer discretionary company and shows its offerings resonate with customers, a helpful starting point for our analysis.
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Deckers’s annualized revenue growth of 17.9% over the last two years is below its five-year trend, but we still think the results were respectable. 
Deckers also reports sales performance excluding currency movements, which are outside the company’s control and not indicative of demand. Over the last two years, its constant currency sales averaged 18% year-on-year growth. Because this number aligns with its normal revenue growth, we can see that Deckers has properly hedged its foreign currency exposure. 
This quarter, Deckers reported year-on-year revenue growth of 16.9%, and its $964.5 million of revenue exceeded Wall Street’s estimates by 7.2%. Company management is currently guiding for a 99.9% year-on-year decline in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 6.7% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will see some demand headwinds. At least the company is tracking well in other measures of financial health.
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Operating Margin
Deckers’s operating margin has been trending up over the last 12 months and averaged 23.2% over the last two years. On top of that, its profitability was elite for a consumer discretionary business, showing it’s a well-oiled machine with an efficient cost structure that benefits from operating leverage as it scales.
In Q2, Deckers generated an operating margin profit margin of 17.1%, up 1 percentage points year on year. This increase was a welcome development and shows it was more efficient.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Deckers’s EPS grew at an astounding 31% compounded annual growth rate over the last five years, higher than its 19.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
In Q2, Deckers reported EPS at $0.93, up from $0.75 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Deckers’s full-year EPS of $6.52 to shrink by 6.2%.
Key Takeaways from Deckers’s Q2 Results
We were impressed by how significantly Deckers blew past analysts’ constant currency revenue expectations this quarter. This led to convincing revenue outperformance in the quarter. We were also excited its EPS outperformed Wall Street’s estimates by a wide margin driven in part by higher margins this quarter than in the same period last year. On the other hand, its revenue guidance for next quarter missed. Overall, this print had some key positives. The stock traded up 8.3% to $113.71 immediately following the results.
Deckers may have had a good quarter, but does that mean you should invest right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.