Deckers is a very interesting US based company owning 2 strong brands, UGG and Hoka. Stock has had a poor run recently, due to market s cautiousness on UGG top line growth. At around 80$ when we pushed the trade, this risk seemed well taken into account in the share price. Not surprisingly, stock is back to 100$+ (in 1 month).

1. Deckers (DECK US) vs Nike (NKE US)
- Big valuation discount of DECK to NKE
- Higher growth and strong brands
- Recent underperformance of DECK due to possibly overcautious H2
guidance
- NKE turnaround is a long story
Oct 2025
Mathias Lascar
mlascar@makorsecurities.com
+44 207 290 57 77

2. Spread past 5 years

3. Investment case
• DECK US drew our attention as it owns UGG and HOKA
• 2 strong brands. HOKA is in a technical niche, UGG is young women’s
must have
• Past top line growth has been impressive and size of addressable
market leaves a lot of room
• We think DECK’s share price fall post Q2 is due to weak H2 2026
guidance but the company is used to guiding low …
• NKE US will be a long turnaround story and it s expensive even
on forward looking x
• Risk on companies is similar we think
• Same US / North Am exposure
• Same risk on tariff increase (both manufacture in SE Asia)

4. Risk / reward
• Due to relative valuation, we don t see much downside to the
spread.
• On a worst case scenario, if Deckers disappoints, it s PE could
go to 10x in 2027 implying a 22% downside on the spread
(taking into account NKE doesnt disappoint either)
• On the other hand, we think Decker’s cautiousness for rest of
FY 2026e despite a good H1 is what implied the share price fall
on its last publication
• Should company’s growth model continues, we don t see why
it shouldn’t trade 20x PE in 2027 (56% upside from here)

5. Valuation table
Price Earnings Ratio (P/E) BEst P/E Next Year Price / Earnings - 5 Year Average Free Cash Flow Yield Gross Margin
PE_RATIO BEST_PE_NXT_YR FIVE_YR_AVG_PRICE_EARNINGS FREE_CASH_FLOW_YIELD GROSS_MARGIN
DECK US Equity 12.94039981 12.81035239 22.6329842 6.619645823 57.87981496
NKE US Equity 34.57948734 26.86454183 30.60881579 3.01397386 42.73467361
EPS 2025 EPS 2026e EPS 2027e
DECK US 5.926 6.404 6.839
NKE US 2.162 1.676 2.51
PE 2025 PE 2026 PE 2027
DECK US 14.75 13.65 12.78
NKE US 31.06 40.07 26.75

6. PE evolution DECK and NKE

7. DECK disappointed on its H2 guidance but …
• DECKERS disappointed on its FY 2026 guidance but we think they re
beeing very cautious
• As shown in table above, company is guiding to -0.7% growth for UGG in H2
and 8.7% for HOKA in H2
• For Q2 2026, company guided low and delivered well above:
• Company says it has inventory to meet demand if sales are higher in H2
than guidance
UGG HOKA
Guidance 2026e 2632.24 2500.96
H1 2026 1024.7 1287.2
Implied H2 1607.54 1213.76
H2 Yoy Growth implied -0.7% 8.7%
Q2 company guidance Q2 actually delivered
Revenue 1.38-1.42bn$ 1.43bn$
Gross Margin 53.5%-54% 56.2%
EPS 1.50$-1.55$ 1.59$

8. Verbatim on H2 guidance
• The following comments from the CFO at the Q2 call make me
think company will do better than guidance in H2, and if not
well peers won’t either
• On pricing:

9. NKE turnaround not very easy and will be long
• Nike has shown a small operational recovery in its latest quarterly
• Sales beat but margins lower (-320 bps gross margin in Q1 2026)
• China still disappointing (-9% in Q1 2026) due to i) local competition (Anta, Li Ning)
and newer competitors (ON, HOKA)
• China is a major region for growth for competitors
• Direct sales not returning to growth this FY; wholesale will grow modestly
• Could further impact negatively gross margins
• Converse brand (3.6% of Nike revenues) still suffering, down 18% in FY 2025,
down 27% again in Q1 2026
• On the « win now » plan, progress on North Am, Running and Wholesale
• But China and direct sales (-4% in Q1) taking time to fix
• Nike is tring to reorganize into a « Sport Offense » model aiming a tmore
innovation and customer relevance (aimed at regaining technicity in the products)

10. Deckers sales split
Brand FY-2025 Revenue (company) Estimated Domestic (63.9%) Estimated International(36.1%)
UGG $2,531,351 $1,617,992 (63.9%) $913,359 (36.1%)
HOKA $2,233,090 $1,427,349 (63.9%) $805,741 (36.1%)
Other $221,171 $141,368 (63.9%) $79,803 (36.1%)
Total $4,985,612 $3,186,709 $1,798,903
Brand Wholesale (~57.3%) DTC (~42.7%) Notes on adjustment
HOKA 65% wholesale → ~US$1,450 million 35% DTC → ~US$783 million
HOKA heavier wholesale given global retail
expansion
UGG 50% wholesale → ~US$1,265 million 50% DTC → ~US$1,266 million UGG balanced, slightly stronger DTC than HOKA
Other brands 57.3% wholesale → ~US$127 million 42.7% DTC → ~US$94 million Long Term target is 50/50 split

11. Nike sales split
Region 2023 2024 2025
North America ~44.4% ~43.4% ~43.8% (~$19.57 billion of $46.31B)
Europe, Middle East & Africa (EMEA) ~27.6% ~27.6% ~27.4% (~$12.26 billion)
Greater China ~14.9% ~15.3% ~14.7% (~$6.59 billion)
Asia Pacific & Latin America (APLA) ~13.2% ~13.7% ~14.0% (~$6.25 billion)
FiscalYear Total Revenue Footwear Apparel “Product & Service, Other” % Footwear % Apparel % Other
2023~$51.22 bn ~$35.29 bn ~$15.69 bn ~$0.24 bn ~68.9% ~30.6% ~0.47%
2024~$51.36 bn ~$35.23 bn ~$15.98 bn ~$0.155 bn ~68.6% ~31.1% ~0.3%
2025~$46.31 bn ~$30.97 bn ~$15.27 bn ~$0.074 bn ~66.9% ~33.0% ~0.16%

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