Adidas, Puma Shares Fall as Deckers' Cautious Guidance Sparks Sector-Wide Concern

Shares of Adidas and Puma declined on Friday after U.S. competitor Deckers Outdoor Corp. disappointed investors with a minimal increase to its full-year guidance, signaling potential headwinds for the broader athletic footwear market. The negative reaction came despite Deckers reporting first-quarter results that surpassed analyst expectations.

Deckers' Strong Quarter, Weak Outlook

Deckers, the parent company of Hoka and UGG, reported first-quarter earnings of 94 cents per share, beating the consensus estimate of 87 cents. Revenue for the quarter rose 5.7% year-over-year to $1.02 billion, which was broadly in line with forecasts. The company also saw its gross margin improve to 56.4% from 55.8% a year earlier, aided by an 8.4% increase in higher-margin direct-to-consumer sales.

Despite these solid results, investors focused on the company's conservative forecast. Deckers raised its fiscal 2027 earnings guidance by only 5 cents at the midpoint, to a new range of $7.35 to $7.50 per share. It left its annual sales forecast unchanged and warned that margins in the current quarter will face pressure from tariffs and rising freight costs.

Signs of Slowing Momentum

The results also pointed to a deceleration in growth for its key brands. The company's overall sales growth slowed from 9.6% in the prior period. Growth in its popular Hoka running shoe brand moderated to 7.7%, a notable slowdown from the double-digit gains seen in recent quarters, while UGG's growth also softened.

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This moderation is a key concern for a stock that has been a market leader, gaining share from larger rivals like Nike. The cooling momentum, combined with the cautious guidance, prompted a sell-off as investors recalibrated their high expectations for the company.

Market Impact

The disappointment in Deckers' outlook created a ripple effect across the sportswear sector. In U.S. premarket trading, Deckers shares fell 2.6%. In Europe, shares of Adidas slid 2.3%, while Puma's stock also fell initially before reversing its losses.

The market reaction suggests that investors view Deckers' performance as a bellwether for consumer demand in the athletic apparel and footwear industry. The cautious tone has raised concerns that similar growth and margin pressures could affect its European peers.