The insight: Deckers and Puma are proceeding with caution as tariffs complicate US operations and consumer sentiment.

• Deckers declined to provide FY guidance, citing trade and macroeconomic uncertainty—despite beating expectations for the most recent quarter.
• Puma slashed its FY forecast following a difficult Q2: It now expects a low double-digit decline in sales, a sharp reversal from its prior expectation for low- to mid-single digit growth. The company also expects to lose money this year, after previously projecting profits between €445 million ($481.5 million) and €525 million ($568 million).

Puma falls behind: The situation is vastly more difficult for Puma, whose brand lacks the momentum of Deckers’ Ugg and Hoka.

• The company is struggling to stay relevant in North America, where sales sank 9.1% YoY in Q2.
• Puma’s decision to frontload inventory to the US to avoid tariffs has only compounded the problem; the lack of demand means that the brand is now being forced to heavily discount products to get them out the door.
• The company has adjusted its Q4 inventory orders accordingly, but it also plans to raise prices starting in October to offset tariffs—a move that could hurt demand heading into the holiday season.

Deckers under pressure: Puma’s losses have in some ways been Deckers’ gain, with the latter’s Hoka brand taking over retailers’ shelves while the former’s wholesale business shrinks. But even Hoka and sister brand Ugg are facing headwinds in the US, a testament to how thoroughly tariffs and uncertainty have upended the retail landscape.

• Deckers is “navigating a choppy US consumer environment” due to soft sentiment and a shift in favor of in-person retail experiences, leading to a 2.8% YoY decline in domestic net sales for the quarter ended June 30.
• Nearly all of Deckers’ growth in the past quarter came from strength in its wholesale business—which could reflect an urgency among retailers to stock up before the full reciprocal tariffs go into effect.
• By contrast, D2C sales were muted, rising just 0.5% YoY on a net basis, while comparable D2C sales fell by 2.2%.

Our take: Of the two companies, Deckers is better equipped to manage the uncertain environment. It has considerably more pricing power than Puma, giving it more room to offset tariff costs. It also has significantly more runway to grow outside the US: International revenues surged 50% in Q1, while Puma is facing weakness in Asia and Europe in addition to North America.

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