Deckers' Hoka: Can the Running Shoe Giant Stay Ahead of the Pack?

Deckers Outdoor Corporation (DECK) has long been synonymous with two powerhouse brands: UGG and HOKA. But as investors, we're here to talk about the latter—because HOKA's recent slowdown has sent ripples through the stock, and we need to know if this is a pothole or a canyon. Let's dive in.

The Growth Engine Sputters—But Is It Out of Gas?

HOKA's full fiscal year 2025 sales soared 23.6% to $2.23 billion, fueled by international expansion (39% growth) and a U.S. market still loving its cushioned kicks. But here's the hitch: Q4 sales grew just 10%, down from 34% the year before. That's a red flag. The culprit? A 3% drop in U.S. Direct-to-Consumer (DTC) sales, as shoppers “opted for in-store exploration” amid macroeconomic jitters. Meanwhile, rival On Holding is charging ahead with 40% growth, eating into HOKA's premium running shoe crown.

Why the Slowdown? Three Words: Saturation, Competition, Caution

1. U.S. Market Maturity: HOKA's U.S. awareness hit 50% in 2025—up from 25% just a year ago. That's great, but it also means fewer untapped customers. The brand is now competing for shelf space and wallets in a crowded $10 billion running shoe market.
2. The On Effect: On's lighter, Swiss-engineered shoes are siphoning off tech-savvy runners. Their 40% growth isn't just a blip—it's a sign HOKA's “maximum cushion” edge is under threat.
3. Tariffs and Trade Tensions: Deckers warned tariffs could cost up to $150 million in 2026. Unlike peers like Amer Sports (which provided guidance despite similar risks), Deckers refused to give 2026 forecasts. Result? Investors panicked, and shares tanked 20% pre-market.

Deckers' Playbook: Double Down on Global Dominance

The company isn't sitting idle. Here's how they're fighting back:
- Expand in EMEA and China: HOKA's international revenue now accounts for 34% of sales, up from 30%. A new Shanghai flagship store and deeper wholesale partnerships in Europe are key.
- Innovation Overload: Launches like the Bondi 9 (slimmer, faster) and Clifton 10 (ultra-comfort) aim to keep runners loyal.
- Cash Is King: With $1.9 billion on the books and a $2.5 billion buyback authorization, Deckers can weather near-term storms.

The Bottom Line: Buy the Dip—or Bail?

Near-Term Risks:
- U.S. DTC weakness could linger if inflation bites.
- Tariffs and geopolitical noise (e.g., China trade policies) are wildcards.

Long-Term Bet:
- HOKA's global ambitions are credible. EMEA and China's 39% growth prove there's still room to scale.
- The brand's 50% U.S. awareness and 30% international awareness are still below saturation levels.

Action Plan:
- Bullish: Buy DECK if it dips below $300 (a 20% pullback from current levels), with a $250 stop-loss.
- Hold for Dividends: Deckers' stock isn't a high-yield play (yield ~0.5%), but consistent buybacks signal confidence.
- Wait for Clarity: Avoid until Deckers' next earnings report (Q3 2026) clarifies tariff impacts and guidance.

Final Take: HOKA Isn't Dead—But It's Running on Empty

HOKA's slowdown isn't a death knell. It's a speed bump in a marathon. The brand's global moat, cash reserves, and product pipeline give it legs to outpace On long-term—if it can navigate these headwinds. For now, this is a “watch and wait” call. When DECK's stock gets clobbered by fear, that's the time to pounce.

Stay tuned, and always keep your powder dry until the smoke clears!