2 Growth Stocks Down 50% to Buy Right Now

Deckers reported fiscal Q3 2026 revenue of $1.96B, up 7% year over year, with EPS of $3.33 beating the $2.76 consensus by more than 20%, and it raised full-year revenue guidance to $5.4B-$5.425B and EPS to $6.80-$6.85. Lululemon posted fiscal 2026 revenue of $11.1B, up 5%, with China Mainland revenue up 28% in Q4 and international revenue up about 20% in constant currency, but the stock remains pressured by CEO turnover, a proxy fight, and tariff headwinds. Overall tone is constructive on long-term fundamentals, but both names face near-term tariff, governance, and consumer-demand risks.

Analysis

The market is still pricing these as broken brands, but the setup is more nuanced: this is a duration trade on premium consumer franchises with temporary P&L compression from tariffs, category rotation, and governance overhangs. That matters because both businesses have enough gross margin and brand equity to absorb short-term friction without impairing unit economics, which makes the selloff more about positioning than fundamentals. In that sense, the main second-order effect is not just re-rating, but forced re-entry by growth managers once the next guide-up or stable comp print removes the bearish narrative.

DECK looks cleaner than LULU as a catalyst-driven long because the near-term event risk is asymmetric: a beat-and-raise into an already depressed multiple can trigger a fast unwind of discretionary underownership. The bigger hidden winner is likely DECK’s international channel and wholesale partners, who benefit from Hoka’s scarcity/heat and can leverage the brand’s momentum while Ugg continues to smooth seasonality. The main loser on the supply-chain side is any vendor or importer dependent on Southeast Asia footwear flows; tariffs may compress not just DECK’s reported margin but also competitor pricing power, which could widen share for the best brands over the next 2-3 quarters.

LULU is messier, but that mess is partly why the asymmetry exists. The market is extrapolating U.S. softness and governance noise into a permanent growth slowdown, while underweighting how much the China/international mix can offset domestic weakness if product cadence stays intact. If the CEO process drags or the proxy fight intensifies, that is a months-long overhang; but if the board resolves quickly, the stock can rerate on the combination of international comp durability and margin recovery leverage. The contrarian miss is that premium athletic apparel is not a zero-sum domestic category anymore; global brand breadth increasingly matters more than U.S. traffic trends.

Key Decisions for Investors

• Go long DECK into the next earnings catalyst with a 4-8 week horizon; use the depressed multiple and guide-up potential for a 20-30% upside scenario if management confirms no tariff-driven demand deterioration.
• Buy DECK calls or call spreads instead of equity if you want defined risk: the stock can gap meaningfully on a clean print, while downside is largely tied to macro rather than idiosyncratic failure.
• Initiate a relative-value long DECK / short a weaker discretionary footwear or apparel basket over 1-3 months to isolate brand-share gains from macro beta.
• Start a smaller staged long in LULU on weakness with a 6-12 month horizon; the thesis depends on international growth reaccelerating and governance noise fading, so size for volatility.
• Avoid shorting LULU outright unless you have a catalyst to break the brand thesis; instead, consider a put spread only if the CEO search or proxy fight worsens materially over the next 1-2 quarters.