11:24 AM EDT, 05/23/2025 (MT Newswires) -- Deckers Outdoor's ( DECK ) strong fiscal fourth-quarter results were overshadowed by sales growth deceleration at its Hoka sneaker brand and potential demand weakness from price increases, prompting KeyBanc Capital Markets to downgrade the footwear and apparel company's stock.

The company late Thursday reported earnings of $1 a share for the March quarter, up from $0.82 the year before, while sales rose 6.5% to $1.02 billion. Both metrics topped market expectations.

Within its brands, Hoka recorded revenue of $586.1 million, representing a year-over-year gain of 10%. However, Hoka's annual pace of growth has slowed down since the second quarter of the company's fiscal 2025, according to the KeyBanc report emailed Friday.

"Hoka quarter sales were slightly below our expectations, and growth into (the first quarter) marks a clear deceleration within the brand, as headwinds like slower customer acquisition and macro pressure materialize," according to the brokerage. "The Hoka brand no longer feels as competitively positioned (versus) other disruptive running brands that continue to outperform, raising concerns it may be losing mindshare."

KeyBanc lowered its rating on Deckers' stock to sector weight from overweight. Shares of the company sank 20% in Friday trade.

Deckers continues to assess actions to offset impacts from changes to tariff policies, "including, but not limited to, flexing the pricing power of our brands," Chief Financial Officer Steve Fasching said during a Thursday earnings call with analysts, according to a FactSet transcript.

"Although, even with these mitigation efforts, we expect to absorb a portion of the tariff impact, as we do not anticipate that these actions will fully offset incremental costs in fiscal year 2026," Fasching told analysts. "We also believe there is potential to see demand erosion associated with the combination of price increases and general softness in the consumer spending environment."

US President Donald Trump on Friday recommended a 50% tariff rate on the European Union, effective June 1, saying that trade discussions with the bloc were "going nowhere."

After announcing sweeping new import tariffs in early April, Trump declared a 90-day pause on certain duties for non-retaliating countries. Recently, the US and China agreed to suspend most levies on each other's goods for 90 days, while Washington reached a trade deal with the UK.

For the ongoing quarter, Deckers expects EPS of $0.62 to $0.67 and sales between $890 million and $910 million. The current consensus on FactSet is for GAAP EPS of $0.68 and sales of $901.5 million.

KeyBanc slashed its first-quarter EPS estimate to $0.65 from $0.81 for Deckers, while seeing revenue at $893.5 million, down from $934.6 million previously expected.

"Given the macroeconomic uncertainty related to evolving global trade policies, the company will not be providing full year guidance for fiscal year 2026 at this time," Deckers said on Thursday.

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