Deckers' Strong Capital Position & Buybacks Strengthen Growth Outlook

Deckers Outdoor Corporation DECK continues to showcase strong capital strength, backed by a highly liquid balance sheet and robust cash generation. As highlighted in its third-quarter fiscal 2026 results, the company ended the period with $2.1 billion in cash and cash equivalents, while maintaining zero outstanding borrowings, underscoring exceptional financial flexibility and a resilient capital structure.

Operational strength remains a major driver of this capital position. DECK’s strong profitability, led by continued momentum in HOKA and UGG, supported record quarterly earnings and healthy cash flow generation. The company’s disciplined marketplace management, high levels of full-price selling and best-in-class margins continue to enhance its ability to generate internal funds and support long-term growth initiatives.

The company has also continued to deploy capital efficiently toward shareholder returns. In the fiscal third quarter alone, DECK repurchased $348.5 million worth of shares at an average price of $92.36. Over the first nine months of fiscal 2026, total repurchases reached nearly $1 billion, representing more than 5% of shares outstanding at the beginning of the fiscal year. As of Dec. 31, 2025, the company still had $1.8 billion remaining under its share repurchase authorization, reflecting management’s confidence in the long-term business outlook.

Looking ahead, management remains optimistic about sustained capital strength. Supported by strong brand demand, healthy operating margins and disciplined cost controls, DECK raised its fiscal 2026 outlook and expects continued profitable growth. The company also indicated that share repurchases are expected to exceed $1 billion for fiscal 2026. This aggressive buyback strategy is expected to contribute more than 20 cents to earnings per share, reflecting both strong cash generation and management’s confidence in the long-term business outlook.

This solid financial foundation positions the company well to fund future expansion, absorb macroeconomic headwinds and drive long-term shareholder value creation.

DECK’s Price Performance, Valuation & Estimates

Shares of Deckers have lost 4.6% in the past three months compared with the industry’s decline of 14%.

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From a valuation standpoint, DECK trades at a forward price-to-earnings ratio of 13.43X, below the industry’s average of 15.04X. It has a Value Score of A.

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The Zacks Consensus Estimate for Deckers’ current fiscal-year sales and EPS implies growth of 8.9% and 8.5%, respectively, from the year-ago period’s actuals. For the next fiscal year, the consensus estimate indicates an 7.5% rise in sales and 6.3% growth in earnings. The consensus estimate for EPS for the current and next fiscal years has been unchanged over the past 30 days.

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DECK currently carries a Zacks Rank #2 (Buy).

Other Key Picks

Some other top-ranked stocks are FIGS Inc. FIGS, Tapestry, Inc. TPR and Abercrombie & Fitch Co. ANF.

FIGS is a direct-to-consumer healthcare apparel and lifestyle brand, and it currently sports a Zacks Rank of 1 (Strong Buy). The company delivered a trailing four-quarter earnings surprise of 187.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for FIGS’ current financial-year sales and earnings indicates growth of 11.7% and 15.8%, respectively, from the year-ago reported numbers.

Tapestry, which was formerly known as Coach, Inc., is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. It currently flaunts a Zacks Rank #2.

The Zacks Consensus Estimate for Tapestry’s current fiscal-year earnings and sales implies growth of 26.5% and 11.2%, respectively, from the year-ago actuals. TPR delivered a trailing four-quarter average earnings surprise of 12.8%.

Abercrombie & Fitch operates as a specialty retailer of premium, high-quality casual apparel for men, women and kids. It currently has a Zacks Rank of 2.

The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal year earnings and sales implies growth of 8.6% and 4.3%, respectively, from the year-ago actuals. ANF delivered a trailing four-quarter average earnings surprise of 8.4%.

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Abercrombie & Fitch Company (ANF): Free Stock Analysis Report

Deckers Outdoor Corporation (DECK): Free Stock Analysis Report

Tapestry, Inc. (TPR): Free Stock Analysis Report

FIGS, Inc. (FIGS): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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