Deckers Outdoor beat the September-quarter numbers and still got punished for it. The Hoka and Ugg owner posted revenue of $1.43 billion and EPS of $1.82 for the quarter ended Sept. 30—both ahead of expectations—yet shares fell double digits after management’s full-year sales outlook underwhelmed. The selloff looks less like a verdict on brand health and more like a reaction to trade-policy math and a market that had come to expect perpetual upside. For long-term investors, that disconnect creates an opening.

Under the hood, the engine is still running hot. Hoka sales rose 11% to about $634 million, while Ugg climbed 10% to roughly $760 million. Gross margin expanded and operating income advanced, helped by cleaner inventory and disciplined wholesale. International remains the swing factor: overseas revenue surged while the U.S. softened modestly—evidence that Hoka’s run-specialty roots are translating abroad even as U.S. consumers balk at cumulative price hikes.

So why the market verdict? Guidance. Deckers now pegs fiscal-year sales around $5.35 billion, with Hoka growing in the low teens and Ugg in the low-to-mid single digits. Management also flagged tariff headwinds tied to Vietnam manufacturing; even after selective pricing and factory cost-sharing, only about half of the estimated tariff bill can be offset this year. Investors extrapolated a slower second half and pressed the sell button.

Tariffs make for ugly optics because they compress what had been one of the best profit-ascension stories in footwear. But they don’t rewrite the structural thesis. Hoka remains in the early innings of global penetration, with share gains in U.S. running that are beginning to rhyme in Europe and China. Product cadence—max-cushion everyday trainers, speed-oriented updates, and an outdoor crossover line that borrows credibility from trail—continues to feed a widening top of funnel. Ugg, the cash cow many thought was late-cycle, again defied gravity with double-digit growth and tight channel control into the all-important holiday quarter. The mix of a scale comfort brand throwing off cash and a performance brand compounding abroad is still intact, even if the slope of the line has flattened for a spell.

Valuation is the hinge. At roughly $103 a share—about a $15.2 billion market cap—the stock now trades near 16× forward earnings and, more importantly, at an implied free-cash-flow yield around 5%–6% using trailing FCF in the $0.86–$0.97 billion range. That is a far cry from the sub-3% FCF yields investors were willing to accept when everything broke Deckers’ way, and it builds in a sizable cushion against further tariff noise. Put differently: even if Hoka’s growth cruises in the teens instead of the twenties for a year and Ugg merely holds serve, the cash return on today’s price is no longer theoretical.

There are risks. A deeper U.S. consumer slowdown could pressure full-price sell-through, especially if competitors lean into promotions. Tariff policy remains a wild card, and Deckers’ guide for operating margin (just north of 21%) leaves less room for error than in the boom years. But the company’s balance sheet is clean, inventory discipline is proven, and its DTC and wholesale levers give it flexibility to protect gross margin if demand wobbles. Management has also been pragmatic about pacing growth—protecting brand equity at the expense of a quarter’s sell-in rarely wins the day on Wall Street but tends to pay off over a cycle.

The market’s message this week was that perfection is no longer the baseline. That’s fine. Deckers doesn’t need perfection to work from here; it needs steady Hoka international adoption, a resilient Ugg holiday, and a tariff path that’s painful but manageable. On those counts, the evidence is still encouraging. At this valuation and free-cash-flow yield, the post-print air pocket looks less like a trap and more like an invitation. For investors willing to own quality brands through policy noise, the drop is a buy.