Outdoor Apparel Giant Deckers Has Fallen Behind Rival Puma in Sales Figures
Deckers Outdoor Corporation Outperforms Puma in Q1 2025
Deckers Outdoor Corporation has reported a strong start to its new fiscal year, with CEO Stefano Caroti calling it a "solid start". The company's shares have jumped over 13 percent in pre-market US trading, despite losing almost half of their value since the beginning of the year.
The increase in cost of goods sold is due to new 20 percent tariffs on Vietnam imports. To address this, Deckers Outdoor Corporation plans to implement strategic price increases.
The US market for Deckers declined by 2.8 percent, but the company's international net sales increased by nearly 50 percent. Brands HOKA and UGG were particularly popular in Europe and China, regions where Deckers was previously underrepresented and where Puma is experiencing weakness.
Deckers' international revenues surged by 50 percent, indicating strong growth outside the US. The company reported total sales of nearly $5 billion in fiscal 2025, with an operating margin close to 24 percent, showing strong profitability and consistent double-digit sales growth driven by Ugg (51 percent of sales) and Hoka (45 percent).
Puma, on the other hand, is facing significant challenges. The company has lowered its full-year 2025 forecast, now expecting a low-double-digit percentage decline in currency-adjusted sales due to tariffs and weak demand. Puma’s Q2 revenue was below analyst estimates, reflecting ongoing struggles. The company foresees a significant gross profit hit from tariffs and expects an operating loss for 2025.
Puma's wholesale business is shrinking, while Deckers' brands are gaining traction and retailer shelf space. This, coupled with Deckers' strong brand equity and successful international expansion, especially in Europe and China, are driving its outperformance over Puma.
Morningstar analyst David Swartz emphasized the international growth potential for brands HOKA and UGG. Some strategic price increases have already been implemented by Deckers Outdoor Corporation. The company expects revenue between $1.38 and $1.42 million for the second quarter, slightly below the consensus forecast of $1.55. Deckers' earnings per share are expected to be between $1.50 and $1.55 for the second quarter.
Despite Deckers' strong performance, the stock is not currently a recommendation of AKTIONÄR. Some analysts consider the current sell-off in Puma to be exaggerated. However, Deckers Outdoor Corporation was forced to lower its annual guidance in May due to macroeconomic uncertainties. The earnings per share came in at $0.93.
In contrast to Puma's Q1 2025 struggles, Deckers Outdoor Corporation demonstrated a robust start, with solid growth in international sales and increased brand popularity in Europe and China retail markets. This growth is attributed to Deckers' strategic business decisions and expansion in the finance and retail industry. Puma, on the other hand, is grappling with decline in currency-adjusted sales, tariff implications, and weak demand in the industry, highlighting Deckers' outsized performance.
