Deckers Outdoor Corporation (DECK), the footwear company behind iconic brands like UGG and HOKA, saw its stock plummet 15.99% in pre-market trading on Friday, January 31, 2025, despite reporting record third-quarter results.

For the third quarter of fiscal 2025, Deckers posted a 17% year-over-year increase in revenue to $1.83 billion, beating analyst estimates. Earnings per share (EPS) jumped 19% to $3.00, also surpassing expectations. The strong performance was driven by continued momentum in the company's UGG and HOKA brands, which have been resonating well with consumers globally.

However, Deckers' updated guidance for the full fiscal year 2025 appeared to disappoint investors. The company raised its revenue growth forecast to approximately 15% to $4.9 billion, up from its previous guidance of around 12% growth but slightly below Wall Street's expectations of 14.9% growth. Additionally, Deckers raised its full-year EPS guidance to a range of $5.75 to $5.80, which was higher than its previous forecast but fell short of analysts' consensus estimate of $5.56.

Management attributed the relatively muted guidance for the fourth quarter to factors such as timing differences between the UGG and HOKA brands, the need to maintain a "scarcity model" to drive demand, and inventory limitations for the UGG brand after strong third-quarter sales pulled forward some demand.

While analysts acknowledged that Deckers' guidance was conservative, they maintained a positive outlook on the company's long-term growth story. Analysts at TD Cowen and Truist Securities slashed their price targets but reiterated their Buy ratings, advising investors to use the weakness as a buying opportunity.