Deckers Outdoor Q2 2027: A Tariff Refund Masked the Real Story
As seen on the 24/7 Wall St. homepage on October 22, 2026.
The 29% earnings beat leaned on a one-time IEEPA tariff refund, and traders saw through it immediately. Revenue missed expectations and direct-to-consumer comparable sales fell, even as management raised full-year EPS guidance to $7.80 to $7.95.
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The fiscal second-quarter 2027 earnings beat is thinner than it looks: a one-time IEEPA tariff refund contributed roughly $0.28 per share and lifted both gross and operating margins. Diluted EPS of $2.31 came in above the consensus estimate. Strip the refund out and the beat looks far more modest.
Profit strength is not coming from demand: net sales of $1.48 billion missed expectations, and the direct-to-consumer channel declined 1.8%. Domestic sales slipped while international markets carried what growth there was.
The mix is shifting toward wholesale as the direct business weakens, with HOKA net sales of $677.2 million leading brand growth. Gross margin expanded year over year, though the tariff refund was a meaningful driver of that improvement.
Management raised full-year fiscal 2027 diluted EPS guidance to a range of $7.80 to $7.95, a figure that includes an approximate $0.52 cumulative benefit from IEEPA tariff refunds received through October 8, 2026. The outlook does not assume any further tariff refund collections beyond what has already been received, so the earnings support that refunds provided this quarter will not repeat.
Deckers repurchased approximately 3.2 million shares for $299.3 million in the quarter and expects total repurchases of $1.0 billion for the full fiscal year. CEO Stefano Caroti said the company is taking deliberate actions to strengthen consumer connections and sharpen execution in the back half of the year, with confidence in long-term growth opportunities for both HOKA and UGG.
Mentioned: DECK