Deckers Outdoor (DECK): Net Margin Rises to 19.4%, Reinforcing Strong Profit Narrative

Deckers Outdoor (DECK) delivered annual earnings growth of 16% over the past year, coming in below its robust five-year average of 23.5%. Current net profit margins have ticked up to 19.4%, an improvement from 18.8% last year, highlighting consistent profitability. With Deckers trading at $81.5 per share, well below the estimated fair value of $106.42, and a peer-beating price-to-earnings ratio of 11.7x, investors are eyeing the company’s combination of strong past profit growth and improved margins as a positive signal, even as forward growth forecasts remain muted compared to the broader US market.

See our full analysis for Deckers Outdoor.

The next section will see how these results compare to the dominant narratives shaping expectations for Deckers, highlighting which market beliefs are supported and where surprises might emerge.

See what the community is saying about Deckers Outdoor

Strong Brands Expand Margins Abroad

• UGG and HOKA are fueling revenue growth, with international sales, especially in APAC and Europe, expanding the company’s reach and increasing direct-to-consumer margins.
• Analysts’ consensus view links margin gains to
  • recent brand expansion and innovative product launches, which have reduced dependency on wholesale channels and driven higher-margin direct sales,
  • yet highlights risks around foreign currency swings and supply chain disruptions that could pressure future margins and earnings even as brands expand globally.

Analyst Price Target Sits 37% Above Market

• The current share price of $81.50 is well below analysts’ price target of $111.97, a discount that stands out against both peer and broader luxury sector valuations.
• Analysts’ consensus view points out
  • valuation appeal is underpinned by Deckers’ robust historical profit growth (23.5% per year over five years),
  • while ongoing improvements in net profit margins and significant brand strength justify a higher multiple compared to peers, supporting potential upside toward the consensus target.

Profit Margins Expected to Tighten

• Consensus forecasts have profit margins narrowing from 19.3% now to 17.4% over the next three years, despite management’s margin-enhancing initiatives.
• Analysts’ consensus view underscores
  • that future earnings growth is expected to trail the broader market (Deckers 3% vs. US market’s 16.1%),
  • and some forecasters warn that winding down the Koolaburra brand and a more promotional sales environment could weigh on near-term margin performance.

If you want to see the full range of perspectives driving these consensus expectations and what they mean for Deckers' stock, read the complete narrative breakdown for deeper insights. 📊 Read the full Deckers Outdoor Consensus Narrative.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Deckers Outdoor on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Spot a new angle in the data? Share your take and craft your own narrative in just a few minutes. Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Deckers Outdoor.

See What Else Is Out There

While Deckers Outdoor has delivered consistent profit growth and margin improvement, consensus forecasts point to significantly slower earnings expansion and margin compression ahead, especially relative to the broader US market.

If you want exposure to companies that are better positioned for reliable revenue and earnings gains, check out stable growth stocks screener (2087 results) to find businesses consistently outperforming in both good times and bad.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com