Why Deckers Outdoor Could Outperform Yeti in 2026

The Case Against Yeti’s Momentum

Yeti Holdings managed to squeeze out an 18% return in 2025, barely keeping pace with the S&P 500, but persistent revenue headwinds suggest this momentum may not hold. The outdoor gear manufacturer’s lackluster top-line growth tells a cautionary tale—shares have nosedived 35% over five years, signaling deeper structural challenges than temporary market weakness. While the brand maintains loyalty in its core segments, the company’s growth trajectory lacks the sparkle needed to outperform in 2026.

The Valuation Disconnect

Here’s where things get interesting: Deckers Outdoor faces an entirely different narrative. After losing nearly half its value in 2025 following an overzealous 2024, the stock has become divorced from its fundamentals.

Trading at a 15.4 price-to-earnings ratio, Deckers appears undervalued relative to its growth profile. Both Hoka and Ugg posted double-digit year-over-year sales growth in Q2 of fiscal 2026, while net income climbed 11% compared to the prior year. The company maintained nearly 20% net profit margins during the period.

Compare this to Nike, which commands a 36 P/E despite reporting declining revenue and earnings growth—a clear indication that the market has mispriced Deckers. Even more telling, Yeti trades at a premium P/E valuation despite posting inferior growth metrics and thinner profit margins. This creates a compelling asymmetry: investors pay more for Yeti’s slower growth while getting less profitability.

International Expansion as the Hidden Engine

While domestic sales slipped 1.7% year-over-year in Q2 FY26, Deckers compensated with an impressive 29.3% surge in international revenue. This isn’t a one-off—international markets are becoming an increasingly significant revenue driver for the company, now representing a material portion of total sales.

This geographic diversification provides meaningful downside protection while offering substantial upside if domestic conditions normalize. Tariff pressures have weighed on U.S. consumer spending, but should trade tensions ease, Deckers stands positioned to accelerate domestic growth alongside its already-robust global expansion.

By contrast, Yeti’s international operations represent a smaller percentage of overall revenue and contributed 14% year-over-year growth—a respectable figure, but one that lacks the magnitude of Deckers’ global penetration.

The Comeback Narrative

Deckers Outdoor has all the ingredients for a meaningful recovery: undervalued equities, dual-engine growth (international momentum + domestic recovery potential), stronger profitability than direct competitors, and proven brand strength with Hoka gaining considerable market share. Historical precedent matters too—the stock has more than doubled over five years when market sentiment shifts.

Yeti may stabilize in 2026, but Deckers Outdoor appears positioned for a more compelling rebound as the market recalibrates its valuation assumptions.