By Emily Dattilo

Shares of Deckers Outdoor were trading sharply lower Friday after light guidance overshadowed a strong quarter from the maker of Hoka sneakers and Ugg boots.

Deckers stock fell 13% to $193.49 in premarket trading Friday. Over the last 12 months, shares have gained 52%.

For its third fiscal quarter ended Dec. 31, the company reported earnings of $3 per share, beating Wall Street's call for $2.58, according to FactSet. Net sales soared 17% to $1.83 billion and beat the consensus call for $1.73 billion.

"UGG continued to experience incredible global momentum, with the brand's iconic franchises capturing strong full price consumer demand across all regions," said CEO Stefano Caroti in the earnings release. "At the same time, Hoka delivered impressive results consistent with our strategy, remaining focused on scaling through innovative performance products."

For fiscal 2025 ending March 31, Deckers raised its financial outlook. The company now forecasts net sales increasing about 15% to $4.9 billion and earnings between $5.75 and $5.80 a share. Analysts had penciled in sales of $4.9 billion and earnings of $5.56, respectively.

TD Cowen analysts John Kernan and Krista Zuber weighed in on the guidance, cut their price target to $199 from $244, and reiterated a Buy rating, noting how the sales guidance indicates a year-over-year decline of 2.5% in the fourth quarter.

"Management asserted on the call that the Q4 outlook isn't reflective of any change in demand for either Hoka or UGG but rather a function of some timing factors unique to each brand, the desire to maintain a scarcity model to keep a pull market," they wrote.

Truist Securities analysts led by Joseph Civello shared a similar optimistic perspective, slashed their price target to $225 from $235, and maintained a Buy rating. The team advises using the weakness to snap up shares because guidance was conservative and the growth story remains strong.

Write to Emily Dattilo at emily.dattilo@dowjones.com

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January 31, 2025 07:55 ET (12:55 GMT)

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