What Happened?
A number of stocks jumped in the afternoon session after the major indices rebounded (Nasdaq +2.0%, S&P 500 +1.5%) as President Trump postponed the planned 50% tariff on European Union imports, shifting the start date to July 9, 2025.
Companies with substantial business ties to Europe likely had some relief as the delay reduced near-term cost pressures and preserved cross-border demand.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Casino Operator company Red Rock Resorts (NASDAQ:RRR) jumped 5.8%. Is now the time to buy Red Rock Resorts? Access our full analysis report here, it’s free.
- Consumer Electronics company Sonos (NASDAQ:SONO) jumped 5.7%. Is now the time to buy Sonos? Access our full analysis report here, it’s free.
- Footwear company Deckers (NYSE:DECK) jumped 7%. Is now the time to buy Deckers? Access our full analysis report here, it’s free.
- Home Furnishings company Lovesac (NASDAQ:LOVE) jumped 6.8%. Is now the time to buy Lovesac? Access our full analysis report here, it’s free.
- Travel and Vacation Providers company Royal Caribbean (NYSE:RCL) jumped 6.5%. Is now the time to buy Royal Caribbean? Access our full analysis report here, it’s free.
Zooming In On Deckers (DECK)
Deckers’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock dropped 19.9% on the news that the company reported weak first quarter 2025 results: both revenue and EPS guidance for the next quarter missed.
The miss was largely due to macro uncertainty tied to global trade policies and softer-than-expected domestic demand, with management calling out the lack of visibility and stepping away from providing full-year guidance altogether.
Still, the just-ended fourth quarter told a brighter story. Constant currency revenue rose 7.5%, led by a 10% jump in HOKA sales and a 3.6% gain in UGG, while EPS beat expectations handily. This strength was fueled by solid international growth and stable margins.
Zooming out, we think this was a mixed quarter, and the weak guidance likely weighed on shares. Following the mixed performance, Evercore downgraded the stock from Buy to Neutral, adding, "Once a well-loved story with strong growth momentum and margin expansion, we think DECK might be entering a new phase of lower growth profile as we see signs of deceleration across its two key brand growth engines – UGG and HOKA."
Deckers is down 47.4% since the beginning of the year, and at $107.66 per share, it is trading 51.7% below its 52-week high of $223.11 from January 2025. Investors who bought $1,000 worth of Deckers’s shares 5 years ago would now be looking at an investment worth $3,308.
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