(Reuters) -Shares of Deckers Outdoor slumped close to 12% in premarket trading on Friday after the footwear maker’s downbeat annual sales forecast, as economic uncertainty and tariff costs dent demand for its shoes in the U.S.

The maker of Hoka sneakers and UGG boots is feeling the pinch of President Donald Trump’s tariffs, which have weighed on discretionary spending among inflation-hit, budget-conscious U.S. consumers.

“The results and outlook are disappointing, and we are incrementally concerned about UGG,” Truist analyst Joseph Civello pointed out, adding that peak growth for its sneakers and boots might be over and increasing competition amid tight consumer pockets indicate a downside.

Similar to its industry peers, Deckers has implemented selective price hikes to shield itself from U.S. tariffs imposed on Vietnamese imports and goods rerouted through Vietnam, where it sources most of its goods.

“For FY27, we see tariffs continuing to exert pressure, but we also see partial offsets from more price increases (given consumer acceptance to price hikes thus far),” Raymond James analysts said.

Last month, peer Nike also warned of tariff pressures and weakness in the Chinese market, despite a surprise profit beat.

Deckers expects annual sales to be about $5.35 billion, compared with estimates of $5.45 billion as per data compiled by LSEG.

The company said on Thursday it expects a more cautious consumer as the impact of tariffs and price increases will be felt in the U.S. in the second half of the year.

For the second quarter, Deckers posted sales of $1.43 billion, above estimates of $1.42 billion, and earned a profit of $1.82 per share, beating estimates of $1.58 apiece.

Its 12-month forward earnings multiple, a common benchmark for valuing stocks, is 15.37, trailing Nike’s 34.61. Shares of Deckers are down 50% so far this year.

(Reporting by Prerna Bedi and Kanchana Chakravarty in Bengaluru; Editing by Krishna Chandra Eluri)