Title: Friday POW! — Pick of the Week + A Major Announcement: Deckers Outdoor (DECK) Source: Haymaker — Friday POW! Author: David Hay (The Haymaker Team, featuring Daniel Bustamante) Date: 2026-MAR-06 (post dated MAR 06, 2026) URL: https://haymaker.substack.com/p/friday-pow-0de Length: written post (PAID), no timestamps Note: Verbatim article text below (written newsletter — no spoken fillers to strip). Includes the special announcement of new contributor Dan Bustamante. Embedded images (not saved): a 10-year DECK P/S and P/E chart and a 5-year DECK price chart with broken downtrend lines + 200-day MA, plus the image-only "Recommended List" table whose tickers are NOT text-readable (so portfolio.json is unchanged). The Recommended-List footnote names LNC (a $0.25 cost revision) and WDOFF (out of sequence, "should appear just ahead of XAR") — text references only, not write-ups. ================================================================ "I'd be a bum on the street with a tin cup if the markets were always efficient." -Warren Buffett ***Special Announcement*** Team Haymaker is both pleased and proud to announce that we have a new contributor to our never-ending search for money-making investments. His name is Dan Bustamante and he's run a successful hedge fund since 2020 focusing on turnarounds and value situations. The elderly Haymaker has tracked his stock picks for many years and has been most impressed. In addition to his appraisal of the fundamental story behind new buy ideas, he is a believer in overlaying traditional research with technical analysis. That, of course, is what Team Haymaker (TH) has done for years. This is particularly the case when it comes to our relentless hunt for stocks and commodities that have broken out from multi-year trading ranges (the longer the better). Dan shares an affinity for such situations and has developed a knack for spotting those that are close to making new three-year highs and, even better, all-time highs (ATHs). Yet, like with TH, he's willing to buy into companies whose shares have been hard hit but are beginning to revive. This week's POW is a good example of that. Fortunately, unlike so many stocks these days, where most of us have no clue what the company in question does, in this case we are all familiar with their products. Not only has it been cut in half from where it was trading a bit over a year ago, it's also corrected about 12% since Israel's and the USA's attack on Iran. Accordingly, it's obviously an even better value than it was two weeks ago. We're excited about being able to share more opportunities from Dan with you in the near future. However, rest assured TH will continue to be on the hunt for other situations where we find the risk/reward to be compelling. Like Warren Buffett, we're believers that the stock market is far from efficient and, as we wrote on Monday, it's becoming progressively less so. Accordingly, we might be witnessing the terminal phase of no-think "investing". It's about time. Now, let's get to what we have on deck for this week… Key Points: - Tariff overhang is at least partially mitigated, causing a re-rating on the POW!'s multiple - It has record-breaking revenue - Its margins are back at the 59% level guidance and helping its… - … active $1.8B share buyback program - Has steady free cash flow (FCF) and NO DEBT And the Pick of the Week is… Deckers Outdoor (DECK) Deckers Outdoor Corporation, the parent company behind popular footwear brands UGG and HOKA, among others, has demonstrated resilient growth in a challenging consumer discretionary environment. Moreover, the "tariff uncertainty overhang" saw the name down nearly -50% in 2025 but that's since changed. Despite this significant pullback in its stock price during 2025, largely in part due to tariff-related costs — the stock was down -15% in one day on the announcement — DECK's share price is in recovery mode. (Please see the Technical Analysis section.) The bull case centers on a shift in brand and earnings momentum, driven by the recent, record-breaking earnings beat, international expansion, and their ability to navigate the recent tariff costs. These coping efforts slashed the net impact to only $25 million — a ~77% reduction from the worst-case scenario previously baked in; this has materially improved the valuation of the company's shares (by raising the "E" in the P/E). Strong Financial Performance and Earnings Momentum Deckers recently beat expectations in a big way, driven by record-breaking quarterly results. In Q3 FY2026 (ended December 2025), the company reported revenue of $1.96 billion, surpassing estimates, and GAAP EPS of $3.33, beating consensus by a wide margin. This led to an upward revision in full-year guidance: FY2026 revenue is now projected at up to $5.425 billion, with EPS expected between $6.80 and $6.85. Trailing 12-month EPS stands at $7.04, with net income at $1.04 billion and a healthy profit margin of 19.35%. Here is what really matters: Deckers slashed its expected net tariff impact for FY2026 to just $25 million (from prior estimates of $75M - $110M unmitigated; i.e., this is a big deal). It resulted from successful pricing actions (passed on to consumers without material demand impact and discussed in the prior earnings call), supply-chain adjustments, and overall resilience — directly addressing the biggest 2025 overhang that had hammered the stock. The stock reacted very well post-earnings to re-price this once-expected overhang, but we still believe there's upside ahead, particularly after the recent Iran war-related correction. Growth Drivers: Brand Strength and Market Expansion The core of the bull case lies in Deckers' powerhouse brands. HOKA — known for its running, trail, and lifestyle shoes — has been a standout, delivering double-digit growth through strong wholesale demand and international momentum. The brand is expected to grow revenue at a low-teens rate in FY2026, fueled by surging sales and high sell-through rates. UGG complements this with premium footwear and apparel, maintaining enduring popularity and contributing to reliable sales growth. International expansion and athleisure trends provide additional tailwinds, with market-share gains and operating leverage enhancing margins. A long-term scenario could see EPS compound annual growth rate (CAGR) near 12% if Deckers successfully launches a third major brand. Attractive Valuation & Active Buybacks At a current price around $105 (up from recent lows near $83), Deckers trades at a forward P/E in the mid-teens (based on fiscal year 2027 estimates), near the low end of historical ranges. Per the following chart, DECK has rarely traded this inexpensively on both of these key metrics. Its P/E of 14.7 is particularly alluring. [Image: 10-Year Chart of DECK's Price-to-Sales (P/S) and P/E ratio — Bloomberg] There is also an aggressive share buyback program: $813M+ repurchased in the last nine months, with expectations to exceed $1B for the full year. Encouragingly, $1.8 billion currently remains from their authorized repurchase commitment which we expect to see implemented based on their abundant free cash flow and zero debt on the balance sheet. In fact, DECK has $1.74 billion in net cash. This makes the valuation case yet more attractive. Backing that cash position out of its market capitalization of $15 billion, lowers the effective P/E to a mere 13.25. Free cash flow is around $1 billion, approximately equivalent to after-tax income. The raised FY2026 EPS guidance ($6.80-$6.85) now incorporates the expected impact from these planned Q4 repurchases and tariff mitigation which has caused the current re-rating we're seeing in the multiple. (Fiscal year 2027 begins on April 1st.) Technicals Zooming out to a long-term chart we can see the destruction the tariffs caused in the share price in 2025 and with those tariff costs being mitigated by the Company the stock is showing strength on the price chart as of the recent earnings. With that tariff discount removed, the chart indicates the stock looks ready to run: it gapped up over +10% on the prior earnings and has held above the moving average since, notwithstanding the recent pull-back. We believe there is a case for a strong move into the mid $150's into the next earnings and the correction over the last few weeks present a better entry opportunity. Also, per the chart below, the steep downtrend line from the end of 2024 peak has clearly been broken. This is true regardless of whether you draw it to the apex of the brief rally in early 2025 or the second recovery high hit last summer (illustrated by the two-diagonal lines). Additionally, as noted above, for the first time since its cliff dive began over a year ago, it has risen above its 200-day moving average (the yellow line). [Image: Five-Year Price Chart for DECK with broken downtrend lines + 200-day MA — Bloomberg] Conclusion What are we really buying here? Brand loyalty with the Hoka line? A margin improvement story? A strong balance sheet? We'd like to think we're getting all three, then some! And when we look around the industry, which is highly competitive, it's hard to find a comparable company, especially one which has done such an excellent job mitigating tariff costs, and at a bargain price. Forget the large share buyback, which is being done when shares are depressed (kudos to management), the recent sales numbers, alone, and technicals have us excited about what we think is a stellar profit-making opportunity over the next two to four quarters! The Haymaker Team, featuring Daniel Bustamante Note Given the significant appreciation many of our names have experienced — combined with the worsening backdrop from war, soaring oil prices, spreading private credit dislocations, and a weakening jobs market — please pay special attention to our Trim recommendations. We brought recently up the idea of broad exposure reduction. Based on what has transpired from a big-picture standpoint since then, we feel this remains prudent guidance. You may even want to pare back on some of the Hold-rated securities, particularly if these have become larger positions. Raising cash right now could produce substantial benefits should macro conditions further deteriorate. Please realize this is not to say to halt all buying. However, if you do add new names, like DECK, we'd suggest funding those by reducing some existing holdings. Recommended List — SB: Strong Buy | B: Buy | H: Hold | T: Trim | S: Sell (Note: LNC cost figure revised by $0.25 to reflect its exact closing price on date of recommendation. Also, WDOFF is out of sequence. It should appear just ahead of XAR. We regret the error.) [Recommended List renders as an image — tickers not text-readable; portfolio.json unchanged.]