Business
Deckers Brands stock sinks 15% after soft outlook raises concerns about Hoka, Ugg growth
Hoka shoes are seen in a store in Krakow, Poland on February 1, 2023.
Jakub Porzycki | Nurphoto | Getty Images
Shares of footwear maker Deckers Brands plunged 15% Friday after the company trimmed its sales guidance for Hoka and Ugg — the two brands driving its growth — over concerns that tariffs are leading to a slide in demand.
Hoka, an up-and-coming running shoe brand, is now expected to grow by a low-teens percentage in fiscal 2026 after growing 24% in the year-ago period, while Boots brand Ugg is expected to grow in the range of a low to mid single-digit percentage, after growing 13% in the year-ago period.
In May, the company said Hoka and Ugg were expected to grow in the mid-teens and mid-single digits, respectively, in fiscal 2026 but it caveated that forecast by saying it was conceived prior to the introduction of President Donald Trump’s tariffs. At the time, it quantified the expected impact to its costs but said it remained to be determined what kind of impact the new duties could have on demand.
When reporting fiscal second-quarter earnings on Thursday, finance chief Steven Fasching said the impacts tariffs and higher prices are having on demand are now more clear.
“Part of the framework that we gave at the beginning of the year really said if tariffs did not have an impact on consumers, how we saw kind of certain growth, and we still believe that, right? But we do know and we are more currently seeing some impacts on the U.S. consumer,” Fasching told analysts on the company’s conference call. “So as U.S. consumers are beginning to see some price increases. It is impacting their purchase behavior within the consumer discretionary space.”
He added the guidance isn’t far off from what the company originally thought but acknowledged there is a “little bit of a reduction” in its forecast.
The slower pace of growth for Deckers’ two top-performing lines, along with the trim to their sales guidance, signals the two brands could be losing momentum after years of outperformance. Together, Hoka and Ugg account for the vast majority of Deckers’ revenue and have been critical in offsetting weaknesses in other categories.
CEO Dave Powers, however, downplayed fears of a long-term slowdown, telling investors that both brands remain strong among core consumers.
“We’re confident in the long-term trajectory of our portfolio,” Powers said. “While tariffs and inflation are creating near-term pressure, Hoka and Ugg continue to lead in brand heat and market share gains across their categories.”
Beyond Hoka and Ugg, Deckers’ full-year revenue guidance came in lower than analysts’ expectations. In fiscal 2026, the company expects revenue of about $5.35 billion, shy of Wall Street’s $5.45 billion forecast, according to LSEG. It expects earnings per share to be between $6.30 and $6.39, roughly in line with the $6.32 per share estimate, according to LSEG.
In the company’s call with analysts, Fasching warned that tariff costs could total about $150 million this fiscal year. Executives said they expect to offset roughly half of those costs through price adjustments and cost-sharing with factory partners.
Deckers’ shares have dropped more than 55% year to date, leaving investors on edge about any signs of decelerating demand.
Interest rates are widely expected to remain at 3.75% as Bank of England policymakers prioritise curbing above-target inflation while also monitoring economic growth, according to expert analysis.
The Bank’s Monetary Policy Committee (MPC) is anticipated to leave borrowing costs unchanged when it announces its latest decision on Thursday, marking its first interest rate setting meeting of the year.
This follows a rate cut delivered before Christmas, which was the fourth such reduction.
At the time, Governor Andrew Bailey noted that the UK had “passed the recent peak in inflation and it has continued to fall”, enabling the MPC to ease borrowing costs. However, he cautioned that any further cuts would be a “closer call”.
Since that decision, official data has revealed that inflation unexpectedly rebounded in December, rising for the first time in five months.
The Consumer Prices Index (CPI) inflation rate reached 3.4% for the month, an increase from 3.2% in November, with factors such as tobacco duties and airfares contributing to the upward pressure on prices.
Economists suggest this inflation uptick is likely to reinforce the MPC’s inclination to keep rates steady this month.
Philip Shaw, an analyst for Investec, stated: “The principal reason to hold off from easing again is that at 3.4% in December, inflation remains well above the 2% target.”
He added: “But with the stance of policy less restrictive than previously, there are greater risks that further easing is unwarranted.”
Shaw also highlighted other data points the MPC would consider, including gross domestic product (GDP), which saw a return to growth of 0.3% in November – a potentially encouraging sign for policymakers.
Matt Swannell, chief economic advisor to the EY ITEM Club, affirmed: “Keeping bank rate unchanged at 3.75% at next week’s meeting looks a near-certainty.”
He noted that while some MPC members who favoured a cut in December still have concerns about persistent wage growth and inflation, recent data has not been compelling enough to prompt back-to-back reductions.
Edward Allenby, senior economic advisor at Oxford Economics, forecasts the next rate cut to occur in April.
He explained: “The MPC will continue to face a delicate balancing act between supporting growth and preventing inflation from becoming entrenched, with forthcoming data on pay settlements likely to play a decisive role in shaping the next policy move.”
The Bank’s policymakers have consistently voiced concerns regarding the pace of wage increases in the UK, which can fuel overall inflation.
India’s budget focuses on infrastructure and defence spending and tax breaks for data-centre investments.
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New Income Tax Act 2025 to come into effect from April 1, key reliefs announced in Budget 2026
New Delhi: Finance Minister Nirmala Sitharaman on Sunday said that the Income Tax Act 2025 will come into effect from April 1, 2026, and the I-T forms have been redesigned such that ordinary citizens can comply without difficulty for ease of living.
The new measures include exemption on insurance interest awards, nil deduction certificates for small taxpayers, and extension of the ITR filing deadline for non-audit cases to August 31.
Individuals with ITR 1 and ITR 2 will continue to file I-T returns till July 31.
“In July 2024, I announced a comprehensive review of the Income Tax Act 1961. This was completed in record time, and the Income Tax Act 2025 will come into effect from April 1, 2026. The forms have been redesigned such that ordinary citizens can comply without difficulty, for) ease of living,” she said while presenting the Budget 2026-27
In a move that directly eases cash-flow pressure on individuals making overseas payments, the Union Budget announced lower tax collection at source across key categories.
“I propose to reduce the TCS rate on the sale of overseas tour programme packages from the current 5 per cent and 20 per cent to 2 per cent without any stipulation of amount. I propose to reduce the TCS rate for pursuing education and for medical purposes from 5 per cent to 2 per cent,” said Sitharaman.
She clarified withholding on services, adding that “supply of manpower services is proposed to be specifically brought within the ambit of payment contractors for the purpose of TDS to avoid ambiguity”.
“Thus, TDS on these services will be at the rate of either 1 per cent or 2 per cent only,” she mentioned during her Budget speech.
The Budget also proposes a tax holiday for foreign cloud companies using data centres in India till 2047.
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