Deckers(DECK) The Motley Fool·2025-01-31 19:55Core Viewpoint - Deckers Outdoor's stock experienced a significant decline following the release of its fiscal Q3 2025 financial results, despite reporting strong sales and earnings growth, indicating that market expectations were overly high [1][2][4]. Financial Performance - Deckers reported Q3 net sales of over 3, which is a 19% increase compared to the previous year and also exceeded estimates [2]. Guidance Updates - For fiscal 2025, Deckers raised its full-year net sales growth expectation from 12% to 15% and increased its gross margin guidance from a best-case scenario of 55.5% to a worst-case scenario of 57% [3]. - Despite these positive adjustments, analysts had anticipated even more substantial increases in guidance, contributing to the stock's decline [4]. Market Context - Prior to the Q3 report, Deckers' stock was trading at an all-time high and had increased over 70% in the past year, with a valuation of more than 7 times its trailing sales, marking it as one of the most expensive shoe stocks [5]. - The elevated expectations from analysts and investors likely led to the stock's cooling off, despite the strong financial results being encouraging for long-term shareholders [6].