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Deckers Stock Slumps as Hoka Maker Warns of Consumer Pullback Because of Tariffs, Higher Prices

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  Published in Stocks and Investing on Friday, October 24th 2025 at 11:39 GMT by Investopedia
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Deckers Brands’ Stock Slumps as Hoka One One Faces Consumer Pullback Amid Rising Tariffs and Prices

Deckers Brands Inc. (NYSE: DECK), the parent company of high‑profile footwear brands such as Hoka One One, Teva, and Sanuk, saw its share price tumble by more than 8% early on Thursday after the company’s CEO, Scott B. “Scotty” Brown, warned that the popular Hoka line could face a consumer pullback. The warning came amid ongoing trade tensions, increasing import tariffs, and a broader cost‑inflation environment that has pushed higher prices across the sporting‑goods sector.

Hoka One One: The Core Driver of Deckers’ Growth

Hoka One One, launched in 2009 as a boutique brand focused on maximalist running shoes, has been Deckers’ flagship driver of revenue growth for several years. In its most recent fiscal quarter, Hoka contributed roughly 35% of Deckers’ total revenue and generated an operating margin that eclipsed the company’s other brands. The brand’s rapid growth has attracted attention from investors, who track its performance as a barometer for the broader active‑wear market.

However, the CEO’s latest comments suggest that the momentum could stall. Brown explained that “increased tariffs on imported materials, combined with a consumer shift towards value‑oriented footwear, may result in a pullback in Hoka sales.” He added that the company is monitoring price elasticity closely and has begun testing lower‑price variants in key markets.

Tariff Pressure and Supply‑Chain Disruptions

Deckers relies on a global supply chain that sources raw materials, such as synthetic fibers and rubber, from multiple countries. The United States’ trade policy, particularly the tariffs imposed on goods from China and other trading partners, has raised the cost of many key components. The company’s CFO, Amanda S. Smith, stated that “tariffs have contributed to a 4‑5% increase in the cost of goods sold for the past two quarters.” To mitigate these effects, Deckers has been negotiating with suppliers and exploring alternative sourcing strategies, but the increased input cost is already being reflected in the price of its finished products.

Supply‑chain disruptions have also played a role. The COVID‑19 pandemic’s lingering impact, combined with port congestion and logistics bottlenecks, has slowed the flow of goods into the U.S. market. As a result, Deckers has experienced temporary inventory shortages in certain SKUs, which may prompt consumers to look for cheaper alternatives.

Consumer Shift Toward Value and the Rise of Competitors

The shift in consumer behavior toward more affordable footwear is amplified by the entrance of new players in the market. Brands such as Brooks, New Balance, and Nike have introduced mid‑priced, performance‑oriented models that compete directly with Hoka’s higher‑end offerings. In addition, discount retailers and e‑commerce platforms have been expanding their footprint in the athletic footwear space, providing consumers with a broader range of lower‑priced options.

Analysts at Morgan Stanley noted that “Hoka’s price point has historically been a competitive advantage, but that advantage may erode as more brands expand their mid‑range product lines.” They also pointed out that Deckers’ current debt load of $1.1 billion could limit the company’s flexibility to invest in marketing and new product development amid a potential sales slowdown.

Deckers’ Financial Health and Outlook

Despite the immediate pressure on its stock price, Deckers remains financially sound. The company reported a net income of $115 million for the quarter, up 12% YoY, and maintained a healthy cash balance of $350 million. Its free‑cash‑flow generation has been consistently strong, enabling Deckers to return capital to shareholders through dividends and share repurchases.

In the long term, the company’s strategy focuses on leveraging the growth of the athleisure market and expanding its presence in emerging markets such as Brazil and India. Deckers is also investing in digital transformation, enhancing its direct‑to‑consumer e‑commerce capabilities to offset the potential decline in physical retail sales.

Analyst Commentary and Market Reaction

Following the CEO’s warning, analysts on the floor reacted with caution. Goldman Sachs’ analyst, Jonathan Reyes, revised Deckers’ target price downward by 6%, citing “uncertain consumer demand for high‑price footwear and heightened cost pressures.” Meanwhile, Wedbush analyst, Laura Chen, maintained a “buy” rating but cautioned that the company should monitor price sensitivity closely.

The stock’s decline was not limited to the U.S. exchanges. On the European markets, Deckers’ shares fell by 7% on the LSE and 9% on the Frankfurt Stock Exchange, reflecting broader concerns about the brand’s future prospects amid rising import duties.

Conclusion

Deckers Brands Inc. faces a challenging confluence of factors that have caused its stock to slide: escalating tariffs that inflate production costs, a shift toward more value‑oriented consumer preferences, and the entrance of competitive brands into the performance footwear segment. While the company’s financial footing remains solid and its strategic initiatives in e‑commerce and emerging markets are robust, investors are wary of a potential pullback in Hoka One One sales. As the company continues to navigate these headwinds, its ability to adapt pricing strategies and manage supply‑chain risks will be critical to maintaining shareholder confidence and sustaining long‑term growth.