For nearly a decade, Deckers Outdoor could do no wrong. The company behind the Hoka running phenomenon and UGG's cultural resurgence delivered nine consecutive years of stock gains, turning a niche footwear maker into a Wall Street darling worth nearly $30 billion at its peak.

Then came 2025, and the streak ended with brutal finality.

Deckers shares have crashed 53% this year, making it the worst-performing stock in the entire S&P 500. The collapse erased nearly $15 billion in market value and left investors wondering whether the company's best days are behind it—or whether this represents a buying opportunity of generational proportions.

The Tariff Shock

Deckers' troubles began in earnest in May, when the company withdrew its full-year guidance citing "uncertainty" from President Trump's tariff policies. The news sent shares plummeting more than 23% in a single day.

The problem is structural: Deckers manufactures almost all of its footwear in China and Vietnam, making it acutely vulnerable to trade policy changes. Unlike some competitors that have diversified production or can absorb tariff costs, Deckers' margins are directly exposed to import duties.

Things worsened in October when the company cut sales guidance for both Hoka and UGG, citing tariff-related demand softness. Shares dropped another 15% on that news.

"Deckers built an incredible brand portfolio, but the supply chain concentration in Asia has become an existential vulnerability. Until there's clarity on trade policy, the stock will remain under pressure."

— Sam Poser, Footwear Analyst at Williams Trading

Growth Deceleration

Beyond tariffs, Deckers faces a more fundamental challenge: the growth engine is slowing.

Hoka, which powered much of Deckers' expansion over the past five years, is now expected to grow in the low-teens percentage range in fiscal 2026—down from 24% growth in the prior year. For a stock that was priced for continued explosive growth, this deceleration alone would have been painful.

UGG's growth has slowed even more dramatically, with guidance calling for low to mid-single-digit gains after 13% growth in the prior year. The brand's comeback, fueled by fashion trends and celebrity endorsements, appears to be losing momentum.

Consumer Weakness

Deckers' challenges mirror broader problems in the consumer discretionary sector. Spending on non-essential items has come under pressure as:

  • Pandemic-era savings have been depleted
  • Credit card debt has reached record highs
  • Inflation has squeezed household budgets
  • Consumer confidence has cratered to multi-year lows

Premium footwear—where both Hoka and UGG compete—is particularly vulnerable. When households tighten belts, $170 running shoes and $200 boots are among the first purchases to be delayed or eliminated.

Competition Intensifies

Hoka's success has attracted competition. On Running, backed by Roger Federer, has captured significant market share in the performance running category. Traditional players like Nike, Asics, and New Balance have responded with their own maximalist cushioned designs.

While Hoka retains strong brand loyalty among its core customers, the competitive moat appears narrower than it did two years ago. Premium pricing becomes harder to sustain when alternatives proliferate.

The Bull Case: Value Emerging

After a 53% collapse, Deckers' valuation has reset dramatically. The stock now trades at approximately 14 times forward earnings—down from peak multiples exceeding 30 times. For a company that remains profitable, cash-generative, and owns two powerful brands, this may represent compelling value.

Bulls argue that:

  • Brand strength persists: Hoka and UGG retain strong consumer loyalty and brand awareness
  • Tariff clarity may come: Trade policy could stabilize, removing the key overhang
  • Margin opportunity: Price increases and efficiency improvements could protect profitability
  • International growth: Both brands have significant expansion potential outside the U.S.

What Management Is Doing

Deckers' leadership has taken several steps to address the challenges:

Supply chain diversification: The company is exploring manufacturing options outside China and Vietnam, though this is a multi-year process.

Price adjustments: Both Hoka and UGG have implemented selective price increases to offset tariff costs, testing consumer price sensitivity.

Product innovation: Hoka continues to launch new models and expand into adjacent categories like trail running and hiking.

Cost discipline: Operating expenses are being scrutinized to protect margins during the demand slowdown.

Peer Comparison

Deckers is not alone in its struggles. The broader athletic footwear and apparel sector has faced headwinds:

  • Nike: Down 19% in 2025, facing its own turnaround challenges
  • Lululemon: Down 45% for a second consecutive year of double-digit losses
  • Under Armour: Still struggling to regain relevance after years of market share losses

The sector-wide weakness suggests that Deckers' problems are partly cyclical rather than entirely company-specific.

The Bottom Line

Deckers Outdoor's 2025 collapse represents one of the most dramatic reversals of fortune in consumer discretionary stocks this year. A company that seemed invincible now faces genuine questions about its growth trajectory and competitive position.

For long-term investors, the question is whether the current valuation adequately reflects these risks—or whether the market has overreacted, creating an opportunity to buy excellent brands at distressed prices.

There are no easy answers. Trade policy remains uncertain, consumer spending is under pressure, and competition is intensifying. But at 14 times earnings, much of this bad news may already be priced in.

What happens next will depend on factors largely outside management's control: tariff negotiations, consumer confidence, and the broader economic cycle. For investors willing to accept these uncertainties, Deckers may offer asymmetric upside. For those who prefer clarity, plenty of other opportunities exist.