This month, we stumbled upon a fascinating case of a company firing on all cylinders – and yet facing brutal market backlash. Deckers Outdoor Corporation (DECK), the powerhouse behind billion-dollar brands HOKA and UGG, announced a massive $2.25 billion boost to its share repurchase program, which was approximately 12% of its market cap at announcement. With $2 billion in cash and zero debt (we are excluding capital leases in our calculation of debt), this is a textbook example of a well-capitalized, well-run business. Together, HOKA and UGG generate over 90% of Deckers’ revenue. However, despite strong earnings and margin expansion, the stock plummeted by more than 20%.
Why? Tariff fears. The company, heavily reliant on Vietnam for manufacturing, was blindsided by escalating trade tensions and withdrew its fiscal 2026 guidance, citing $150 million in potential tariff costs. The market didn’t take kindly to the uncertainty. When a business this well-run trades at a sudden discount, it’s time to dig in and ask: Are the fears overblown?