The growth rate returned to 18.5% in the third quarter. Has HOKA broken the "slowdown curse"?

As sneaker and apparel brands collectively enter a cyclical game of "destocking" and "adjusting expectations," Deckers, which owns HOKA and UGG, seems to be maintaining its own rhythm.

Deckers recently released its financial performance for the third quarter of fiscal year 2026 (ending December 31, 2025). During the three months covering the entire traditional consumer peak season in Europe and America, the company achieved net sales of $1.958 billion, a year-on-year increase of 7.1%.

Among them, UGG showed stable performance, with net sales of $1.305 billion this quarter, up 4.9% year-on-year.

Meanwhile, HOKA, which has continuously dominated the growth engine in recent years, achieved net sales of $628.9 million, with a year-on-year growth rate rebounding to 18.5%.

Compared to the previous quarter's growth rate of 11.1%, HOKA's unexpected rebound is largely attributed to growth in the DTC (direct-to-consumer) channel and international markets.

This quarter, Deckers' growth in international markets reached 15%, far exceeding the 2.7% growth in the U.S. domestic market.

According to Deckers' previous meeting minutes, China has become the core driving force behind HOKA's international business growth.

Unlike the early days when it relied solely on "hardcore running shoes" to attract fans, HOKA is now deeply penetrating the new middle-class consumers in China through a "combination of light and heavy" channel strategy.

According to previous disclosures from management, the sales achievement rate at HOKA's partner stores in China far exceeded expectations, providing solid data support for subsequent expansion of store density.

At the same time, the brand has successfully maintained a very high full-price sales rate by opening flagship stores in core business districts and conducting frequent offline community activities.

In 2025, HOKA will continue to strengthen its strategic layout through direct-operated stores, focusing on the four core cities of Shanghai, Beijing, Chengdu, and Shenzhen, while radiating to the East China, North China, Southwest, and South China regional markets.

Currently, the number of HOKA stores in China has surpassed that of any other market globally.

The performance on the profit side also confirms the success of this strategy.

Although gross margin slightly decreased to 59.8% due to exchange rate and product mix impacts, diluted earnings per share still rose from $3 in the same period last year to $3.33.

This profit elasticity is largely attributed to the continuous increase in the proportion of DTC. This quarter, Deckers' DTC proportion has surpassed 55%, indicating that the brand's control over terminal pricing power and inventory has reached a historical high.

The market had previously been extremely concerned about the impact of tariffs, but CFO Steve Fasching revealed that due to the time lag in inventory turnover and the hedging of pricing strategies, the actual negative impact of tariffs this quarter was lower than expected.

Therefore, Deckers updated its performance guidance for fiscal year 2026 in its financial report, expecting full-year net sales to reach $5.4 billion to $5.425 billion, with HOKA's full-year growth expectation raised to around 15%.

On the flip side of growth, cautious signals still lurk.

As competitors like On engage in "close combat" in China's first-tier cities, the professional running shoe sector where HOKA operates is becoming increasingly crowded Deckers' inventory level this season increased by 10% year-on-year. Although management explained that this is mainly due to accrued tariffs and logistics reserves, balancing "high-end tone" with "scale expansion" amid the fluctuations in the global trade environment and the stratification of domestic consumption will continue to test the management's refined operational capabilities