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What changed in Deckers Brands's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Deckers Brands's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+429 added−480 removedSource: 10-K (2025-05-23) vs 10-K (2024-05-24)

Top changes in Deckers Brands's 2025 10-K

429 paragraphs added · 480 removed · 322 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

72 edited+19 added−47 removed23 unchanged
Biggest changeRefer to the subsection titled “Contractual Obligations” under the section “Liquidity” within Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 7, “Commitments and Contingencies,” of our consolidated financial statements in Part IV within this Annual Report for further information on our minimum purchase commitments. 6 Table of Contents We require our independent manufacturers and designated suppliers, including our partners and licensees, to adopt our Ethical Supply Chain Supplier Code of Conduct (Supplier Code of Conduct), which specifies that they must comply with all local laws and regulations governing human rights, working conditions, anti-corruption, restricted substances, and environmental compliance, including animal welfare and conflict minerals, before we are willing to conduct business with them.
Biggest changeWe require our independent manufacturers and designated suppliers to adopt our Ethical Supply Chain Supplier Code of Conduct (Supplier Code of Conduct), which requires them to comply with all local laws and regulations governing human rights, working conditions, anti-corruption, restricted substances, and environmental compliance, including animal welfare and conflict minerals, before we are willing to conduct business with them.
TRADEMARKS AND PATENTS We utilize trademarks for virtually all of our products and believe having distinctive marks that are readily identifiable is an important factor in creating a market for our products, promoting our brands, and distinguishing our products from the products of others.
TRADEMARKS AND PATENTS We utilize trademarks for virtually all our products, and we believe having distinctive marks that are readily identifiable is an important factor in creating a market for our products, promoting our brands, and distinguishing our products from the products of others.
Through our open-door policy and culture, employees are encouraged to approach their managers if they believe violations of standards or policies have occurred and are also able to make confidential and anonymous reports using a 24/7 online or telephone hotline hosted by an independent third-party provider. At Deckers, we believe our culture makes us unique.
Through our open-door policy and culture, employees are encouraged to approach their managers if they believe violations of standards or policies have occurred and are able to make confidential and anonymous reports using a 24/7 online or telephone hotline hosted by an independent third-party provider. At Deckers, we believe our culture makes us unique.
Refer to the “Environmental, Social, and Governance” section below for further information. INVENTORY MANAGEMENT AND PRODUCT RETURNS We have an extended design and manufacturing process, which involves the initial design of our products, the purchase of raw and other materials, the accumulation of inventories, the subsequent sale of the inventories, and the collection of the resulting accounts receivable.
Refer to the section titled “Environmental, Social, and Governance” below for further information. INVENTORY MANAGEMENT AND PRODUCT RETURNS We have an extended design and manufacturing process, which involves the initial design of our products, the purchase of raw and other materials, the accumulation of inventories, the subsequent sale of the inventories, and the collection of the resulting accounts receivable.
The Board of Directors considers whether the ESG program adequately identifies material risks in a timely fashion, implements appropriate responsive risk management strategies, and transmits necessary information with respect to material risks within the organization. Our Chief Administrative Officer (CAO) is responsible for the day-to-day management of our ESG program.
The Board considers whether the ESG program adequately identifies material risks in a timely fashion, implements appropriate responsive risk management strategies, and transmits necessary information with respect to material risks within the organization. Our Chief Administrative Officer (CAO) is responsible for the day-to-day management of our ESG program.
Further, our executive leadership team and Board of Directors commit substantial time to succession planning, evaluating the bench strength of our leadership and supporting their career development while improving organizational performance. We are proud to offer a wide range of programs intended to support global employee development and retention.
Further, our executive leadership team and Board commit substantial time to succession planning, evaluating the bench strength of our leadership and supporting their career development while improving organizational performance. We are proud to offer a wide range of programs intended to support global employee development and retention.
We currently hold trademark registrations for “UGG,” “Teva,” “Sanuk,” “HOKA,” “Koolaburra by UGG,” “AHNU,” and other marks in the US, and for certain of the marks in many other countries, including Canada, China, the United Kingdom (UK), various countries in the European Union (EU), Japan, and Korea.
We currently hold trademark registrations for “UGG,” “HOKA,” “Teva,” “AHNU,” “Koolaburra by UGG,” and other marks in the US, and for certain of the marks in many other countries, including Canada, China, the United Kingdom (UK), various countries in the European Union (EU), Japan, and Korea.
We offer affordable, innovative, comprehensive, and competitive benefits package that range from health insurance, retirement plan, life insurance, disability, accident coverage, paid time off, paid and unpaid leave including parental leave, mental health benefits, and other voluntary benefits such as health savings accounts and our recently adopted solar and electric car reimbursement program.
We offer affordable, innovative, comprehensive, and competitive benefits package that range from health insurance, retirement plan, life insurance, disability, accident coverage, paid time off, paid and unpaid leave including parental leave, mental health benefits, and other voluntary benefits such as health savings accounts and our recently adopted solar and electric car reimbursement program. Employee Health and Safety .
Further, we engage an independent compensation consultant, FW Cook, which provides us with information to evaluate the effectiveness of our executive compensation program, including competitive pay practices and trends in our industry, the design and structure of our executive compensation program, as well as the formulation of and benchmarking against our peers within our industry. Employee Wellness .
Further, we engage an independent compensation consultant, FW Cook, which provides us with information to evaluate the effectiveness of our executive compensation program, including competitive pay practices and trends in our industry, the design and structure of our executive compensation program, and the formulation of and benchmarking against our peers within our industry. Employee Wellness .
We generally purchase products from our manufacturers on the basis of individual purchase orders, rather than maintaining long-term purchase commitments, which provides us greater flexibility to adapt to changing consumer preferences, changes in international trade relations, and evolving inventory management requirements.
We generally purchase products from independent manufacturers on the basis of individual purchase orders, rather than maintaining long-term purchase commitments, which provides us greater flexibility to adapt to changing consumer preferences, changes in international trade relations, and evolving inventory management requirements.
We also have detailed ethics and compliance policies that support our commitment to ethical behavior and legal compliance across our Company.
We also have detailed policies that support our commitment to ethical behavior and legal compliance across our Company.
Talent Development and Retention . The ability to attract, develop, and retain employees is critical to our long-term success. We focus on our employees’ growth, creating experiences that align with our strategic priorities and promote inclusion, performance, connection, and opportunities for development.
The ability to attract, develop, and retain employees is critical to our long-term success. We focus on our employees’ growth, creating experiences that align with our strategic priorities and promote inclusion, performance, connection, and opportunities for development.
ITEM 1. BUSINESS GENERAL We are a global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories developed for both everyday casual lifestyle use and high-performance activities. We market our products primarily under six proprietary brands: UGG, HOKA, Teva, Sanuk, Koolaburra, and AHNU. Our brands compete across the fashion and casual lifestyle, performance, running, and outdoor markets.
ITEM 1. BUSINESS GENERAL We are a global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories developed for both everyday casual lifestyle use and high-performance activities. We market our products primarily under five proprietary brands: UGG, HOKA, Teva, AHNU, and Koolaburra. Our brands compete across the fashion and casual lifestyle, performance, running, and outdoor markets.
The program’s execution is driven by our leadership team and various cross-functional teams including our ethical sourcing, facilities, DCs, brands, innovation, materials, and supply chain teams. Our ESG program aligns our internal teams with our Sustainable Development Goals (SDGs), detailed below, and establishes policies to encourage our partners and suppliers to employ sustainable business practices.
The program’s execution is driven by our leadership team and various cross-functional teams including our ethical sourcing, facilities, warehouses and DCs, brands, innovation, materials, and supply chain teams. Our ESG program aligns our internal teams with our Sustainable Development Goals (SDGs), and establishes policies to encourage our partners and suppliers to employ sustainable business practices.
For example, consumers may feel or try on products in our retail stores and then place an order online later. Conversely, they may initially research products online, and then view inventory availability by store location and make a purchase in store.
For example, consumers may feel or try on products in our retail stores and then place an order online later. Conversely, they may initially research products online and then view inventory availability by store location and make a purchase in store. E-Commerce Websites.
We continue to open retail stores in key markets to further grow our brand presence and appeal to a broader consumer base. Our Company-owned mono-branded retail stores are predominantly UGG brand concept and outlet stores, as well as HOKA brand concept stores, which we continue to launch in strategic locations.
Our Company-owned mono-branded retail stores are predominantly UGG brand concept and outlet stores, as well as HOKA brand concept stores, which we continue to open in key markets to further grow our brand presence and appeal to a broader consumer base.
Our stakeholder outreach program is led by a cross-functional team that includes members of our investor relations, compliance, sustainability, diversity, equity, and inclusion (DEI), and legal teams. Additionally, we actively engage with our employees to obtain valuable feedback and track progress, including through regular employee engagement surveys. Sustainable Development Goals.
Our stakeholder outreach program is led by a cross-functional team that includes members of our investor relations, compliance, sustainability, and legal teams. Additionally, we actively engage with our employees to obtain valuable feedback and track progress, including through regular employee engagement surveys. Sustainable Development Goals.
In particular, and in part due to the popularity of our UGG brand and HOKA brand products, we face increasing competition from a significant number of domestic and international competitors selling products designed to compete directly or indirectly with our products.
In particular, and in part due to the popularity of our UGG brand and HOKA brand products, we face increasing competition from a significant number of domestic and international 10 Table of Contents competitors selling products designed to compete directly or indirectly with our products.
We annually assess risks related to ESG issues as part of our overall enterprise risk management approach. In addition, our internal audit team provides periodic targeted reviews of our ESG-related policies and procedures to the Audit Committee. ESG Education .
We annually assess risks related to ESG issues as part of our overall enterprise risk management approach. In addition, our internal audit team provides periodic targeted reviews of our ESG-related policies and procedures to the Audit Committee. Stakeholder Engagement .
Our annual Creating Change Report for the year ended March 31, 2024, which will be published under the “Responsibility” tab of our website located at ir.deckers.com , will provide more information regarding our fiscal year 2024 ESG achievements with a focus on the SDGs discussed below.
Our annual Creating Change Report for the year ended March 31, 2025, which will be published in calendar year 2025 under the “Responsibility” tab of our website located at ir.deckers.com , will provide more information regarding our fiscal year 2025 ESG achievements with a focus on the SDGs discussed below.
The information contained on or accessed through our website does not constitute part of this Annual Report, and references to our website address within this Annual Report are inactive textual references only.
The information contained on or accessed through our website does not constitute part of this Annual Report, and references to our website address within this Annual Report are inactive textual references only. 11 Table of Contents
We seek to differentiate our brands and products by offering diverse lines that emphasize fashion, authenticity, functionality, quality, and comfort, and products tailored to a variety of activities, seasons, and demographic groups. Independent third-party contractors manufacture all of our products (independent manufacturers).
We seek to differentiate our brands and products by offering diverse lines that emphasize fashion, authenticity, functionality, quality, and comfort, and products tailored to a variety of activities, seasons, and demographic groups. Independent third-party contractors manufacture all of our products (independent manufacturers). RECENT DEVELOPMENTS Koolaburra Brand.
We have comprehensive safety training programs to help ensure our employees know how to do their jobs safely and in compliance with laws and regulations. We prioritize the safety of our facilities and work to ensure they are modern and efficient.
The health and safety of our employees is our highest priority. We have comprehensive safety training programs to help ensure our employees know how to do their jobs safely and in compliance with laws and regulations. We prioritize the safety of our facilities and work to ensure they are modern and efficient.
Authentic employees create an authentic company. • Better together. The power of independent spirit, united for a common goal. • Commit to create. Curiosity fuels creativity, which in turn fuels innovation. • Own it. We set high targets and hit them and take accountability when we don’t. • Do good and do great.
The power of independent spirit, united for a common goal. • Commit to create. Curiosity fuels creativity, which in turn fuels innovation. • Own it. We set high targets and hit them and take accountability when we don’t. • Do good and do great.
In our wholesale channel, we sell our products in the US through sales representatives, who are organized by account type or geographically and by brand. Our sales force is organized by brand, as each brand generally has certain specialty customers that expect a dedicated sales team with specialized knowledge of the brand’s product offerings.
In our wholesale channel, we sell our products in the US through sales representatives, organized by brand and either geography or account type, as each brand generally has certain specialty customers that expect a dedicated sales team with specialized knowledge of the brand’s product offerings.
We seek to manage our inventory levels by considering existing orders, forecasted sales and budgets for both our wholesale and DTC channels, and the delivery requirements of our customers.
We seek to manage our inventory levels by considering existing orders, as well as forecasted sales and budgets by brand for both the wholesale and DTC channels, including consideration of the delivery requirements of our customers.
Our Corporate Responsibility, Sustainability & Governance Committee (Corporate Governance Committee) is comprised of four independent members of our Board of Directors who oversee our ESG strategy and have ultimate oversight over all sustainability initiatives, strategies, and programs, including economic, social, and environmental risks.
Our Corporate Responsibility, Sustainability & Governance Committee (Corporate Governance Committee) is comprised of four independent members of our Board of Directors (Board) who oversee our ESG strategy and have ultimate oversight over all sustainability initiatives, strategies, and programs, including economic, social, and environmental risks. The Corporate Governance Committee and Board regularly receive updates on the status of our ESG program.
We sell our UGG brand products primarily through fashion lifestyle retailers, higher-end department stores, streetwear and sports style partners, and online retailers. As the retail marketplace continues to evolve to reflect changing consumer preferences, we continually review and evaluate our UGG wholesale distribution and product segmentation approach.
As the retail marketplace continues to evolve to reflect changing consumer preferences, we continually review and evaluate our UGG wholesale distribution and product segmentation approach. We sell our HOKA brand products primarily through full-service specialty retailers, outdoor and sporting goods retailers, select online retailers, fashion lifestyle retailers, sports style partners, and higher-end department stores.
Achieving measurable sustainability success is critical to our future economic and business growth, and we work to establish SDGs that we believe are the most relevant to our business, our operations, our stockholders, and the communities in which we operate. We are a member of the United Nations Global Compact (UNGC), the world’s largest voluntary corporate sustainability initiative.
We work to establish SDGs that we believe are the most relevant to our business, our operations, our stockholders, and the communities in which we operate. We are a member of the United Nations Global Compact (UNGC), the world’s largest voluntary corporate sustainability initiative.
We believe the progress of our corporate responsibility efforts is evidenced by disclosing goals and relevant metrics and, to that end, we have aligned the reporting standards included in our Creating Change Report with the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures (commonly referred to as TCFD), Global Reporting Initiative’s (commonly referred to as GRI) Core Standards, and Sustainability Accounting Standards Board’s (commonly referred to as SASB), and now part of the International Finance Reporting Standard (or IFRS) Foundation Consumer Goods Sector Apparel, Accessories and Footwear Index.
The content of our website, including our Creating Change Report, is not incorporated by reference into this Annual Report or in any other report or document we file with the SEC. 8 Table of Contents We believe the progress of our corporate responsibility efforts is evidenced by disclosing goals and relevant metrics and, to that end, we have aligned the reporting standards included in our Creating Change Report with the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures (commonly referred to as TCFD), Global Reporting Initiative’s (commonly referred to as GRI) Core Standards, and Sustainability Accounting Standards Board’s (commonly referred to as SASB), and now part of the International Finance Reporting Standard (or IFRS) Foundation Consumer Goods Sector Apparel, Accessories and Footwear Index.
In addition to our wholesale channel, we sell products directly to consumers through our DTC business and fulfill online orders through our DCs and retail stores. We currently distribute products sold in the US through our DCs in Moreno Valley, California, and Mooresville, Indiana.
In addition to our wholesale channel, we sell products directly to consumers through our DTC channel and fulfill online orders through our warehouses, DCs, and retail stores. We currently distribute products sold in the US through our DCs in Moreno Valley, California, and Mooresville, Indiana. We also distribute products to our wholesale channel customers through a DC bypass program.
We regularly conduct employee surveys to understand our employee’s experiences on a variety of topics focused on employee engagement. Our latest survey completed in February 2024 had a participation rate of 89%. Of those employees who completed the survey, 88% noted they were proud to work for Deckers. Promoting Diversity, Equity, and Inclusion .
We regularly conduct employee surveys to understand our employees’ experiences on a variety of topics focused on employee engagement. Our latest survey completed in February 2025 had a participation rate of 91.5%. Of those employees who completed the survey, 89% noted they were proud to work for Deckers.
We also make the following material corporate governance and responsibility documents available through our website: Ethical Supply Chain Supplier Code of Conduct, Audit & Risk Management Committee Charter, Talent & Compensation Committee Charter, Corporate Responsibility, Sustainability, & Governance Committee Charter, Code of Ethics, Creating Change Report, Accounting and Finance Code of Ethics, EEO-1 Report, Corporate Governance Guidelines, and Insider Trading Policy.
We also make certain corporate governance and responsibility documents available through our website at ir.deckers.com/governance and ir.deckers.com/responsibility/policies , respectively, including Ethical Supply Chain Supplier Code of Conduct, Audit & Risk Management Committee Charter, Talent & Compensation Committee Charter, Corporate Responsibility, Sustainability, & Governance Committee Charter, Code of Ethics, Creating Change Report, Accounting and Finance Code of Ethics, EEO-1 Report, and Corporate Governance Guidelines.
We believe our products are distinctive and appeal to a broad demographic. We sell our products through quality domestic and international retailers, international distributors, and directly to our global consumers through our DTC business, which is comprised of our Company-owned e-commerce websites and retail stores.
We believe our products are distinctive and appeal to a broad demographic. Our brands sell our products through quality domestic and international retailers, international distributors, and directly to global consumers through our Direct-to-Consumer (DTC) channel, which is comprised of an e‑commerce and retail store presence.
The Corporate Governance Committee and Board of Directors regularly receive updates on the status of our ESG program. In addition, the Audit & Risk Management Committee (Audit Committee) of the Board periodically assesses risk management, including climate-related risks and policies, to ensure a consistent corporate strategy.
In addition, the Audit & Risk Management Committee (Audit Committee) of the Board periodically assesses risk management, including climate-related risks and policies, to ensure a consistent corporate strategy.
We also continued our Art of Kindness events, where employees volunteer during a week-long event in our local communities multiple times during the fiscal year. Our employees volunteered approximately 19,000 hours during fiscal year 2024. Our strategic giving and community-engagement efforts continued to be aligned with our SDGs, including DEI, the environment, uplifting youth, education, and community support.
We also continued our Art of Kindness events, where employees volunteer during a week-long event in our local communities multiple times during the fiscal year. Our employees volunteered approximately 24,000 hours during fiscal year 2025. Our strategic giving and community-engagement efforts continued to be aligned with our SDGs. 9 Table of Contents Talent Development and Retention .
Refer to the sections titled “Trends and Uncertainties Impacting Our Business and Industry” and “Liquidity” within Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” within this Annual Report for further information on our supply chain infrastructure capabilities, working capital and operating requirements, and purchase obligations for product.
Refer to the sections titled “Trends and Uncertainties Impacting Our Business and Industry” and “Liquidity” within Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” within this Annual Report for further information on our supply chain infrastructure capabilities, working capital and operating requirements, and purchase obligations for product. 7 Table of Contents ENVIRONMENTAL, SOCIAL, AND GOVERNANCE As a global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories, our worldwide reach and impact is significant.
Our systems and processes are designed to improve our product forecasting, inventory control and supply chain management capabilities, and we are making investments in a new end-to-end planning system to further support our scaling business, including our Company-owned e-commerce websites.
Our systems and processes are designed to improve our product planning and forecasting, inventory control and supply chain management capabilities, including our Company-owned e-commerce websites.
With loyal consumers around the world, the UGG brand has proven to be a highly resilient line of premium footwear, apparel, and accessories with expanded product offerings that appeal to a growing global audience and a broad demographic. The UGG brand is sold globally, including in the US, Canada, Europe, Asia-Pacific, and Latin America. HOKA .
With loyal consumers around the world, the UGG brand has proven to be a highly resilient consumer-focused line of premium footwear, apparel, and accessories with year-round product offerings that appeal to a growing global audience and a broad demographic. HOKA .
Through our outlet stores, we sell certain discontinued styles from prior seasons, full price in-line products, and products made specifically for the outlet stores.
Outlet stores are Company-owned stores designed to sell certain discontinued styles from prior seasons, full price in-line products, and products made specifically for the outlet stores. GEOGRAPHIC DISTRIBUTION US Distribution.
Expanded marketing and strategic marketplace presence have fueled both domestic and international sales growth of the HOKA brand, which has quickly become a leading brand within run and outdoor specialty wholesale accounts and is growing across its ecosystem of access points.
Expanded marketing and strategic marketplace presence have fueled both domestic and international sales growth of the HOKA brand, which has quickly become a leading brand within run and outdoor specialty wholesale accounts and is growing across its global marketplace. The HOKA brand’s product line includes running, trail, hiking, fitness, and lifestyle footwear offerings, as well as select apparel and accessories.
HUMAN CAPITAL - OUR PEOPLE AND OUR CULTURE Employees . As of March 31, 2024, we employed approximately 4,800 employees, reflecting an increase of 14.3% compared to the fiscal year ended March 31, 2023 (the prior period) in North America, Europe, and Asia. This includes approximately 1,700 employees in our retail stores, which excludes temporary and seasonal employees. Culture .
HUMAN CAPITAL - OUR PEOPLE AND OUR CULTURE Employees . As of March 31, 2025, we employed approximately 5,500 employees, reflecting an increase of 14.6%, compared to March 31, 2024, in North America, Europe, and Asia. This includes approximately 2,000 employees in our retail stores but excludes temporary and seasonal employees. Culture .
We also sell products internationally, particularly in China, through partner retail stores, which are branded stores that are wholly owned and operated by third parties. In addition, in certain countries we sell products through our DTC business. For our wholesale and DTC businesses, we distribute our products through a number of DCs managed by 3PLs in certain international locations.
We sell our products internationally in our wholesale channel through wholly owned subsidiaries and independent distributors, some of which operate partner retail stores. In addition, in certain countries we sell products through our DTC channel. For our wholesale and DTC channels, we distribute our products through a number of warehouses and DCs managed by 3PLs in certain international locations.
We strive to positively impact the world by uniting purposeful brands with diverse people driven to succeed and create change. Our key values, which guide our journey onward together to improve our business and create a better world around us, help hold us accountable to deliver on this purpose, are as follows: • Come as you are.
Our key values, which guide our journey onward together to improve our business and create a better world around us, and help hold us accountable to deliver on this purpose, are as follows: • Come as you are. Authentic employees create an authentic company. • Better together.
Our retail stores enable us to expose consumers to a curated selection of products, directly influence our consumers’ experience with our brands, and sell our products at retail prices; thereby generating larger gross profit as a percentage of net sales (gross margin).
Retail Stores. Retail stores enable us to expose consumers to a curated selection of products and directly influence our consumers’ experience with our brands.
As a result of our efforts, during fiscal year 2024, we have been recognized as one of Barron’s 100 Most Sustainable Companies, by Investor’s Business Daily as one of the Best ESG Companies, by U.S.
As a result of our efforts, during fiscal year 2025, we have been recognized as one of Barron’s 100 Most Sustainable Companies, by TIME as one of the Most Sustainable Companies, by Forbes as one of America’s Best Companies, by Newsweek as one of America’s Most Responsible Companies and as one of America’s Greenest Companies. ESG Oversight.
For example, we offer a week fully dedicated to employee learning, connection, and development across the globe (Explore Week), quarterly global employee gatherings dedicated to peer sharing and learning about different parts of the organization and careers in each space (Biz Breaks), and two global leadership development programs for leaders at varying levels (Trailblazers and Ascent).
For example, we offer a week fully dedicated to employee learning, connection, and development across the globe (Explore Week), and three global leadership development programs for leaders at varying levels (Trailblazers, Navigator, and Ascent).
Our DCs feature a warehouse management system that enables us to efficiently pick and pack products for direct shipment to customers and consumers. International Distribution. We sell our products internationally in our wholesale channel through independent distributors and our wholly owned subsidiaries, including in Canada, Europe, Asia-Pacific, and Latin America.
Our warehouses and DCs feature a warehouse management system that enables us to efficiently pick and pack products for direct shipment to customers and consumers. 5 Table of Contents International Distribution. Collectively, our brands are sold internationally in Canada, Europe, Asia, and Latin America.
Excluding sheepskin, UGGplush, sugarcane-derived EVA, and certain branded materials for materials like outsoles, we believe that substantially all raw materials and components used to manufacture our products, including virgin wool, rubber, leather, and nylon webbing, are generally available from multiple sources at competitive prices.
Excluding sheepskin, UGGplush, and sugarcane-derived EVA, we believe that substantially all raw materials and components used to manufacture our products are generally available from multiple sources at competitive prices. We believe current supplies are sufficient to meet our anticipated demand for the next 12 months.
REPORTABLE OPERATING SEGMENTS AND GEOGRAPHIC AREAS Our six reportable operating segments include the worldwide wholesale operations of the UGG brand, HOKA brand, Teva brand, Sanuk brand, and Other brands, as well as DTC (collectively, our reportable operating segments). UGG Wholesale.
As of March 31, 2025, our three reportable operating segments include the worldwide operations of the UGG brand, HOKA brand, and Other brands (collectively, our reportable operating segments).
As of March 31, 2024, we hold 210 designs and inventions with corresponding design or utility patent registrations, plus 51 designs and inventions which are currently pending registration. These patents expire at various times.
As of March 31, 2025, we hold 232 designs and inventions with corresponding design or utility patent registrations, plus 64 designs and inventions which are currently pending registration. These patents expire at various times. We regard our proprietary rights as valuable assets and vigorously protect such rights against infringement by third parties.
We sell our Teva brand footwear primarily through outdoor and sporting goods retailers, fashion lifestyle retailers, large national retail chains, higher-end department stores, and online retailers. We continue to expand our Teva brand wholesale distribution in international markets, including through strategic partners in Japan. Sanuk Wholesale.
We continue to expand our HOKA brand wholesale distribution globally, including through additional mono-branded locations operated by partner retailers. 4 Table of Contents We sell our Teva brand products primarily through outdoor and sporting goods retailers, fashion lifestyle retailers, large national retail chains, higher-end department stores, and online retailers.
Also on February 1, 2024, we announced that Stefano Caroti, our Chief Commercial Officer, will be appointed as CEO and President, effective August 1, 2024. BRANDS UGG. The UGG brand is one of the most iconic and recognized footwear brands in our industry, which highlights our successful track record of building niche brands into lifestyle and fashion market leaders.
The UGG brand is one of the most iconic and recognized footwear brands in our industry, which highlights our successful track record of building niche brands into lifestyle and fashion market leaders.
The content of our website, including our annual EEO-1 filing, is not incorporated by reference into this Annual Report or in any other report or document we file with the SEC. Charitable Giving and Volunteering. Our charitable contributions, product donations, and employee volunteer efforts are an essential part of our culture.
We publish workforce metrics in our annual Equal Employment Opportunity filing (EEO-1) which is publicly available at deckers.com/responsibility/policies. The content of our website, including our annual EEO-1 filing, is not incorporated by reference into this Annual Report or in any other report or document we file with the SEC. Charitable Giving and Volunteering.
Production by our independent manufacturers is performed in accordance with our detailed product specifications and rigorous quality control and operating compliance standards. We maintain a buying office in Hong Kong, as well as on-site supervisory offices in China, Indonesia, and Vietnam, which collectively serve as a strong link to our independent manufacturers.
We maintain a buying office in Hong Kong, as well as on-site supervisory offices in Vietnam, China, and Indonesia, which collectively serve as a strong link to our independent manufacturers. We believe our substantial regional presence enhances our manufacturing processes by providing predictability of material availability and ensuring adherence to quality control standards and final design specifications.
Our DTC business encompasses all of our brands and is comprised of our Company-owned e-commerce websites and retail stores, which are intertwined and interdependent in an omni-channel marketplace as we believe many of our consumers interact with both before making purchasing decisions in store and online.
Our e-commerce websites and retail stores are intertwined and interdependent in an omni-channel marketplace, providing a fluid purchasing experience, which engenders brand loyalty while increasing product sales and improving our inventory productivity. In addition, we believe many of our consumers interact with both before making purchasing decisions in store and online.
Depending on the brand and product application, there may be multiple rounds of samples for fit, dynamic or athlete testing, and on occasion, we may contract with external laboratories for additional research needs. Our diverse product offering enables us to leverage learnings across each of our brands, enabling innovation and economies of scale.
Throughout the creation process there are multiple concept and design reviews to develop prototypes which are assembled through our independent manufacturers. Depending on the brand and product application, there may be multiple rounds of samples for fit, dynamic or athlete testing, and on occasion, we may contract with external laboratories for additional research needs.
We annually contribute to our local communities through monetary donations, volunteer efforts, and in-kind donations. During fiscal year 2024, we donated over $4,600 to various non-profit organizations around the globe, primarily to organizations focused on DEI initiatives, environmental impact mitigation, and community support.
Our charitable contributions, product donations, and employee volunteer efforts are an essential part of our culture. We annually contribute to our local communities through monetary donations, volunteer efforts, and in-kind donations. During fiscal year 2025, we donated over $6,000 to various non-profit organizations around the globe, primarily to organizations focused on uplifting youth, community, belonging, education, and the environment.
We regard our proprietary rights as valuable assets and vigorously protect such rights against infringement by third parties. 12 Table of Contents GOVERNMENT REGULATION Compliance with federal, state, and local environmental regulations has not had, and it is not expected to have, any material effect on our business, results of operations, financial condition, or competitive position based on information and circumstances known to us at this time.
Based on the information and circumstances known to us at this time, compliance with such applicable laws and regulations is not expected to have any material effect on our business, results of operations, financial condition, or competitive position.
Our sustainability policies and strategies are informed by our ongoing efforts with multi-stakeholder initiatives, which involve our stockholders, employees, suppliers, and customers, as well as other brands and non-governmental organizations. Through our holistic Environmental, Social, and Governance (ESG) program, which has been in existence since 2010, we are committed to advancing our sustainable business initiatives.
We believe consumers are increasingly buying brands that deliver quality products while striving for minimal environmental impact by employing sustainable business practices. Our sustainability policies and strategies are informed by our ongoing efforts with multi-stakeholder initiatives, which involve our stockholders, employees, suppliers, and customers, as well as other brands and non-governmental organizations.
Refer to Note 12, “Reportable Operating Segments,” and Note 13, “Concentration of Business,” of our consolidated financial statements in Part IV within this Annual Report for additional information regarding our reportable operating segments, as well as our geographic areas and concentration of related business risks, respectively. 5 Table of Contents PRODUCT DESIGN AND DEVELOPMENT Our design and development teams work closely with each brand’s product management teams to create seasonal product lines designed to meet and exceed consumer expectations.
Refer to Note 13, “Concentration of Business,” of our consolidated financial statements in Part IV within this Annual Report for additional information regarding geographic areas and concentration of related business risks.
Key materials and components include sheepskin, UGGplush, and sugarcane-derived ethylene vinyl acetate (sugarcane-derived EVA). Sheepskin is used to manufacture a significant portion of our UGG brand products, and, at our direction, our independent manufacturers purchase the majority of this sheepskin from designated suppliers, mainly two tanneries in China, which source their sheepskin primarily from Australia.
Sheepskin used to manufacture a significant portion of our UGG brand products and is sourced primarily from designated suppliers in Australia and processed by two tanneries in China. We enter into fixed purchasing contracts with designated suppliers of sheepskin and, at times, sugarcane-derived ethylene-vinyl acetate (sugarcane-derived EVA) to manage price volatility and ensure availability.
Throughout the entire design and development process we evaluate the availability and costs of raw materials, the capabilities and capacities of our independent manufacturers, and the target pricing of our products. MANUFACTURING AND SUPPLY CHAIN We outsource the production of our products to independent manufacturers, which are primarily located in Asia.
Our diverse product offering enables us to leverage learnings across each of our brands, enabling innovation and economies of scale. Throughout the entire design and development process we evaluate the availability and costs of raw materials, the capabilities and capacities of our independent manufacturers, and the target pricing of our products.
Currently, we sell our AHNU brand footwear through domestic streetwear and lifestyle boutiques and retailers. Direct-to-Consumer.
We sell our AHNU brand footwear through domestic streetwear and lifestyle boutiques and retailers. Direct-to-Consumer. Our DTC channel is comprised of our Company-owned e-commerce websites and retail stores where products are sold at retail prices.
Each brand follows a similar product creation path starting with consumer insights, including color, trend, material research, and in-depth market analysis. Throughout the creation process there are multiple concept and design reviews to develop prototypes which are assembled through our independent manufacturers.
PRODUCT DESIGN AND DEVELOPMENT Our design and development teams work closely with each brand’s product management teams to create seasonal product lines designed to meet and exceed consumer expectations. Each brand follows a similar product creation path starting with consumer insights, including engagement with key consumer segments, color, trend, material research, and in-depth market analysis.
Refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” within this Annual Report for further discussion of our DTC business, including the various retail store types and definitions.
Refer to the subsection titled “Contractual Obligations” under the section “Liquidity” within Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 7, “Commitments and Contingencies,” of our consolidated financial statements in Part IV within this Annual Report for further information on our minimum purchase commitments.
As of March 31, 2024, we operate Company-owned e-commerce websites in 56 different countries and have a total of 164 global retail stores (including 26 HOKA brand retail stores), which includes 83 concept stores and 81 outlet stores.
As of March 31, 2025, we have a total of 179 global Company-owned retail stores (including 137 UGG brand retail stores and 42 HOKA brand retail stores), which include 92 concept stores and 87 outlet stores. Retail store definitions are as follows: • Concept Stores.
However, as net sales of the HOKA brand continue to increase as a percentage of our aggregate net sales, we expect to continue to see the impact from seasonality decrease over time.
In addition, as the HOKA brand’s net sales, which generally occur more evenly throughout the fiscal year, continue to increase as a percentage of our aggregate net sales, we expect to reduce the impacts of seasonality in future periods.
The Koolaburra brand is a casual footwear fashion line that uses plush materials and is intended to target the value-oriented consumer to complement the UGG brand offering. The AHNU brand’s footwear products fuse high-performance technology with timeless style crafted for everyday wear. Our Other brands are primarily sold in the US and Canada. SALES AND DISTRIBUTION US Distribution.
Other Brands. Other brands consist primarily of the Teva brand, AHNU brand, and Koolaburra brand. The Teva brand’s products are built for a range of outdoor pursuits and include a variety of footwear options, from classic sandals and shoes to boots. The AHNU brand’s footwear products fuse high-performance technology with timeless style crafted for everyday wear.
We also have several flagship stores, which are Company-owned premium mono-branded concept stores in key global markets designed to showcase the UGG and HOKA brand products. Flagship stores provide broader product offerings and generate greater traffic that enhance our interaction with consumers and increase brand loyalty.
Premium mono-branded stores in key global markets, such as major tourist locations typically with above average square footage, designed to provide broader product offerings and generate greater traffic that enhances the consumer experience and increases brand loyalty. ◦ Shop-in-shop (SIS) Stores.
We believe including diverse perspectives and amplifying voices of underrepresented communities brings a unique set of experiences, opinions, and thoughts on critical issues that help enhance our business and drive better outcomes. As of March 31, 2024, our Board of Directors is comprised of a total of ten directors, 60% of whom are from underrepresented communities.
We believe an inclusive workplace that promotes belonging for everyone brings together those with a unique set of experiences, opinions, and thoughts on critical issues. In turn, these varied perspectives enhance our business and drive better outcomes. Our people are at the center of everything we do.
We sell HOKA brand products primarily through full-service specialty retailers, outdoor and sporting goods retailers, select online retailers, fashion lifestyle retailers, sports style partners, and higher-end department stores. We continue to expand our HOKA brand wholesale distribution in international markets, including through strategic partners in Europe and Japan. Teva Wholesale.
This approach enables us to expand market reach and leverage the scale and operational capabilities of its wholesale partners to serve a broad base of end consumers. We sell our UGG brand products primarily through fashion lifestyle retailers, higher-end department stores, streetwear and sports style partners, online retailers and partner retailers.
Removed
RECENT DEVELOPMENTS On February 1, 2024, Dave Powers announced his intention to retire from his position as Chief Executive Officer (CEO) and President of the Company, effective August 1, 2024. Following this date, we expect Mr. Powers will continue to serve as a member of our Board of Directors.
Added
During the third quarter of fiscal year 2025, we began taking steps to phase out our standalone operations for the Koolaburra brand in order to maintain focus on our most significant organic opportunities. We closed Koolaburra.com as of March 31, 2025, and plan to wind down the Koolaburra brand in the wholesale channel by the end of calendar year 2025.
Removed
The HOKA brand’s product line includes running, trail, hiking, fitness and lifestyle footwear offerings, as well as select apparel and accessories. The HOKA brand is sold globally, including in the US, Canada, Europe, Asia-Pacific, and Latin America. 3 Table of Contents Teva.
Added
Refer to the section titled “The Company,” in Note 1, “General,” of our consolidated financial statements in Part IV within this Annual Report for further information. 3 Table of Contents Sanuk Brand Asset Sale. We completed the sale of our Sanuk brand and certain related assets on August 15, 2024 (Sanuk Brand Sale Date).
Removed
The Teva brand, born in the depths of the Grand Canyon, has long been a favored brand among outdoor adventurers across the globe.
Added
Refer to the section titled “The Company,” in Note 1, “General,” of our consolidated financial statements in Part IV within this Annual Report for further information on the sale of Sanuk brand. Forward Stock Split and Authorized Share Increase. On September 13, 2024, we effected a stock split and an authorized share increase.
Removed
Today, building on its foundation as a leader in sport sandals and its authentic outdoor heritage, the Teva brand’s thoughtfully designed, and accessible products are built for a range of outdoor pursuits, connecting with a vibrant, diverse audience passionate about exploration.
Added
Our financial results included within this Annual Report have been retroactively adjusted to reflect the effectiveness of the stock split and the authorized share increase. Refer to the section titled “Basis of Presentation,” in Note 1, “General,” of our consolidated financial statements in Part IV within this Annual Report for further information. BRANDS UGG.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur international manufacturing operations are subject to numerous other risks and uncertainties, including the following: • tariffs, import and export controls, and other non-tariff barriers; • poor infrastructure and equipment shortages, which can disrupt transportation and utilities; • restrictions on the transfer of funds from foreign jurisdictions; • changes in governmental regulations, including with respect to intellectual property, labor, safety, and the environment; • the refusal of our partners to adopt or comply with our manufacturing policies; • customary business traditions in certain countries such as local holidays, which are traditionally accompanied by elevated levels of turnover in the factories; • decreased scrutiny by custom officials for counterfeit products; • practices involving corruption, extortion, bribery, pay-offs, theft, and other fraudulent activity; • use of unauthorized or prohibited materials or reclassification of materials; • health-related concerns that could result in a reduced workforce or scarcity of raw and other materials; and • adverse changes in consumer perception of goods sourced from certain countries. 22 Table of Contents While we have implemented measures to comply with applicable customs regulations and to properly calculate import duties, customs authorities may disagree with our claimed tariff treatment for certain products, resulting in unexpected costs that may not have been factored into the sales price of such products and our forecasted gross margin.
Biggest changeOur international operations and independent manufacturers are also subject to other risks and uncertainties, including: • poor infrastructure and equipment shortages, which can disrupt transportation and utilities; • restrictions on the transfer of funds from foreign jurisdictions or volatile foreign exchange rates; • customary business traditions in certain countries such as local holidays, which are traditionally accompanied by elevated levels of turnover in the factories; • decreased scrutiny by custom officials for counterfeit products; • social instability and corruption, extortion, bribery, pay-offs, theft, and other fraudulent activity; • use of unauthorized or prohibited materials or reclassification of materials; • health-related disruptions, such as disease outbreaks or raw material shortages, which could impact our workforce or scarcity of raw and other materials; and • adverse changes in consumer perception of goods sourced from certain countries.
Failure to gain market acceptance for new products could impede our ability to maintain or grow current revenue levels, reduce profits, adversely affect the image of our brands, erode our competitive position, and result in long-term harm to our business and financial results. Changes in economic conditions may adversely affect our financial condition and results of operations.
Failure to gain market acceptance for new products could impede our ability to maintain or grow current revenue levels, reduce profits, adversely affect the image of our brands, erode our competitive position, and result in long-term harm to our business and financial results. Changes to economic conditions may adversely affect our financial condition and results of operations.
Any disruption to these relationships may result in increased costs or loss of customers. In addition, there is no guarantee that a new customer will generate results that are more favorable than the terminated party.
Any disruption to these relationships may result in increased costs or loss of customers. In addition, there is no guarantee a new customer will generate results that are more favorable than the terminated party.
Flagship stores play a crucial role in brand market positioning, and are operated to have neutral operating profitability, are typically greater in size, and involve more extensive leasehold improvements and furniture and fixtures compared to our other concept retail stores.
Flagship stores play a crucial role in brand market positioning, are operated to have neutral operating profitability, are typically greater in size, and involve more extensive leasehold improvements and furniture and fixtures compared to our other concept retail stores.
Although we believe our tax estimates are reasonable as our tax filings are prepared in accordance with all applicable tax laws, the final determination with respect to any tax audits, and related litigation, could be materially different from our estimates or from our historical tax provisions and accruals, especially as there is continued economic and political pressures to increase tax revenues in jurisdictions in which we operate.
Although we believe our tax estimates are reasonable and our tax filings are prepared in accordance with all applicable tax laws, the final determination with respect to any tax audits, and related litigation, could be materially different from our estimates or from our historical tax provisions and accruals, especially as there is continued economic and political pressures to increase tax revenues in jurisdictions in which we operate.
We could face a significant disruption in our domestic DC operations if our warehouse management system does not perform as anticipated or ceases to function for an extended period of time, which could occur due to damage to the facility, failure of software or equipment, cyber-security incidents, power outages or similar problems.
We could face a significant disruption in our domestic warehouse and DC operations if our warehouse management system does not perform as anticipated or ceases to function for an extended period of time, which could occur due to damage to the facility, failure of software or equipment, cyber-security incidents, power outages or similar problems.
The footwear, apparel, and accessories industry is subject to rapid changes in consumer preferences and fashion tastes, which make it difficult to anticipate demand for our products and forecast our financial results. Our success is driven to some extent by brand loyalty, and there can be no assurance that consumers will continue to prefer our brands.
The footwear, apparel, and accessories industry is subject to rapid changes in consumer preferences and fashion tastes, which make it difficult to anticipate demand for our products and forecast our financial results. Our success is driven to some extent by brand loyalty, and there can be no assurance consumers will continue to prefer our brands.
Furthermore, our future growth also depends in part on our ability to effectively manage the profitability of our existing retail locations. For example, our failure to successfully identify and close underperforming stores in a timely manner could have a number of material adverse effects, such as impairments and a negative impact on our financial condition and results of operations.
Furthermore, our future growth depends in part on our ability to effectively manage the profitability of our existing retail locations. For example, our failure to successfully identify and close underperforming stores in a timely manner could have a number of material adverse effects, such as impairments and a negative impact on our financial condition and results of operations.
Our Certificate and Bylaws contain provisions that could have the effect of rendering more difficult hostile takeovers, change-in-control transactions, or changes in our Board of Directors or management. As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law, which may delay, deter, or prevent a change-in-control transaction.
Our Certificate and Bylaws contain provisions that could have the effect of rendering more difficult hostile takeovers, change-in-control transactions, or changes in our Board or management. As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law, which may delay, deter, or prevent a change-in-control transaction.
Much of our financial success is related to the ability of our customers, which include our retailer and distributor partners, to successfully market and sell our brands to consumers. If a customer fails to satisfy contractual obligations or otherwise meet our expectations, or experiences operational issues, it may be difficult to locate an acceptable alternative.
Much of our financial success is related to the ability of our customers, which include our retailer and distributor partners, to successfully market and sell our brands to consumers. If a customer fails to satisfy contractual obligations or meet our expectations, or experiences operational issues, it may be difficult to locate an acceptable alternative.
In particular, we believe that, as a result of the growth of the UGG and HOKA brands, certain competitors have entered the marketplace specifically in response to the success of our brands, and other competitors may do so in the future, particularly as access to offshore manufacturing and changes in technology make it easier and more cost effective to compete.
In particular, we believe that, as a result of the growth of the UGG and HOKA brands, competitors have entered the marketplace specifically in response to the success of our brands, and other competitors may do so in the future, particularly as access to offshore manufacturing and changes in technology make it easier and more cost effective to compete.
Further, if our manufacturers or suppliers violate US or foreign trade laws or regulations, we may be subject to extra duties, significant monetary penalties, the seizure, and forfeiture of products we are attempting to import, or the loss of our import privileges, which could have a negative effect on our results of operations.
Further, if our independent manufacturers or suppliers violate US or foreign trade laws or regulations, we may be subject to extra duties, significant monetary penalties, the seizure, and forfeiture of products we are attempting to import, or the loss of our import privileges, which could have a negative effect on our results of operations.
We use sheepskin to manufacture a significant portion of our products, and if we are unable to obtain a sufficient quantity of sheepskin at acceptable prices that meets our quality expectations, or if there are legal or social impediments to our ability to use sheepskin, it could have a material adverse effect on our business.
We use sheepskin to manufacture a significant portion of our products, and if we are unable to obtain sufficient sheepskin at acceptable prices that meets our quality expectations, or if there are legal or social impediments to our ability to use sheepskin, it could have a material adverse effect on our business.
Although we have undertaken expansive efforts to improve and implement our ESG initiatives, it is possible that stakeholders may not be satisfied with such disclosures, our ESG practices or the speed of their adoption.
Although we have undertaken expansive efforts to improve and implement our ESG initiatives, it is possible stakeholders may not be satisfied with such disclosures, or our ESG practices or the speed of their adoption.
Further, public health issues and related regulatory responses, including a pandemic, may reduce demand for certain products, deteriorate our ability, or the ability of our customers, to operate in affected regions, and result in the failure of key business partners to provide services for our efficient operations, including the inability of our manufacturers or third-party distributors to timely fulfill their obligations to us, any of which would adversely affect our business, results of operations and financial condition.
Further, public health issues and related regulatory responses may reduce demand for certain products, deteriorate our ability, or the ability of our customers, to operate in affected regions, and result in the failure of key business partners to provide services for our efficient operations, including the inability of our manufacturers or third-party distributors to timely fulfill their obligations to us, any of which would adversely affect our business, results of operations and financial condition.
Further, we may be required to issue equity securities to finance an acquisition, which would be dilutive to our stockholders, and the equity securities may have rights or preferences senior to those of our existing stockholders.
Further, we may be required to issue equity securities to finance an acquisition, which would be dilutive to our stockholders, and equity securities may have rights or preferences senior to those of our existing stockholders.
These risks have been exacerbated as our key customers are impacted by significant structural changes to the retail industry fueled by changing technology, consumer purchasing behavior, and economic conditions, as well as a shrinking retail footprint. These trends have been, and may in the future be, intensified by a pandemic or other public health emergency.
These risks have been exacerbated as our key customers are impacted by significant structural changes to the retail industry fueled by changing technology, consumer and wholesale partner purchasing behavior, and economic conditions, as well as a shrinking retail footprint. These trends have been, and may in the future be, intensified by a pandemic or other public health emergency.
From time to time, we communicate certain ESG initiatives and goals to market participants and our customers and business partners, including through our annual Creating Change Report.
From time to time, we communicate certain ESG initiatives to market participants and our customers and business partners, including through our annual Creating Change Report.
Our competitors’ greater resources may enable them to more effectively compete on the basis of price and production, develop new products more quickly or with superior technical capabilities, adapt to changes in technology, including the successful utilization of 14 Table of Contents data analytics, artificial intelligence, and machine learning, market their products and brands more successfully, identify or influence consumer preferences, increase their market share, withstand the effects of seasonality, and manage periodic downturns in the footwear, apparel, and accessories industry or in economic conditions.
Our competitors’ greater resources may enable them to more effectively compete on the basis of price and production, develop new products more quickly or with superior technical capabilities, adapt to changes in technology, including the successful utilization of data analytics, artificial intelligence, and machine learning, market their products and brands more successfully, identify or influence consumer preferences, increase their market share, withstand the effects of seasonality, and manage periodic downturns in the footwear, apparel, and accessories industry or in economic conditions.
We expect our recent domestic DC expansion to create long-term capacity for the domestic growth of the UGG and HOKA brands.
We expect our recent domestic warehouse and DC expansion to create long-term capacity for the domestic growth of the UGG and HOKA brands.
If any of these were to occur, we may not be able to timely source raw and other materials, manufacture product, or fill customer orders, or product delivered may not meet our quality standards, which would result in lost sales and harm to our relationships with customers.
If any of these were to occur, we may not be able to timely source raw and other materials, manufacture products, or fill customer orders, or products delivered may not meet our quality standards, which would result in lost sales and harm to our relationships with customers.
While we have experienced stable pricing in recent years, fluctuations in the price of sheepskin could occur as a result of any factors that increase the demand for, or decrease the supply of, sheepskin, including weather patterns, supply conditions, energy prices, work stoppages, increased logistics costs, government regulation, sanctions and policy, economic climates, market speculation, compliance with our standards, harvesting decisions, incidence of disease, the price of other commodities, such as wool and leather, the demand for our products and the products of our competitors, and global economic conditions, any of which would increase our manufacturing costs and reduce our gross margin.
While we have experienced stable pricing in recent years, fluctuations in the price of sheepskin could occur as a result of any factors that increase the demand for, or decrease the supply of, sheepskin, including weather 16 Table of Contents patterns, supply conditions, energy prices, work stoppages, increased logistics costs, government regulation, sanctions and policy, market speculation, compliance with our standards, harvesting decisions, incidence of disease, the price of other commodities, such as wool and leather, the demand for our products and the products of our competitors, and global economic conditions, any of which would increase our manufacturing costs and reduce our gross margin.
We could incur significant capital expenditures and other costs to improve the climate-related resiliency of our infrastructure and otherwise prepare for, respond to, and mitigate the effects of climate change, including compliance with evolving, and at times inconsistent, country specific laws and regulations.
We could incur significant capital expenditures and other costs to improve the climate-related resiliency of our infrastructure and otherwise prepare for, respond to, and mitigate the effects of climate change, including compliance with evolving, and at times inconsistent, laws and regulations.
This cycle requires us to incur significant expense relating to the design, manufacturing, and marketing of our products in advance of the realization of revenue from sales, and results in significant liquidity requirements and working capital fluctuations throughout our fiscal year.
This cycle requires us to incur significant expenses relating to the design, manufacturing, and marketing of our products in advance of the realization of revenue from sales, and results in significant liquidity requirements and working capital fluctuations throughout our fiscal year.
We also license the right to operate our brand retail stores to third parties through our partner retail program. Most of the partner retail stores are operated in international markets. We provide training to support these stores and set and monitor operational standards.
We also license the right to operate our brand retail stores to third parties through our partner retail program. All of the partner retail stores are operated in international markets. We provide training to support these stores and set and monitor operational standards.
Any provision of Delaware law, our Certificate, or our Bylaws, which has the effect of rendering more difficult, delaying, deterring, or preventing a change-in-control transaction could limit the opportunity for stockholders to receive a premium for their shares of our common stock, and could affect the price that investors are willing to pay for our common stock. 28 Table of Contents
Any provision of Delaware law, our Certificate, or our Bylaws, which has the effect of rendering more difficult, delaying, deterring, or preventing a change-in-control transaction could limit the opportunity for stockholders to receive a premium for their shares of our common stock, and could affect the price that investors are willing to pay for our common stock.
Sales of these products may be adversely affected by variable economic factors, including worsening economic conditions, consumer confidence in future economic conditions, changes to fuel, energy, labor, and healthcare costs, declines in income or asset values, and increases in consumer debt levels, inflation and interest rates, and unemployment rates.
Sales of these products may be adversely affected by variable economic factors, including worsening economic conditions, consumer confidence in future economic conditions, including recessionary concerns, changes to fuel, energy, labor, and healthcare costs, declines in income or asset values, and increases in consumer debt levels, inflation and interest rates, tariffs, and unemployment rates.
We expect these manufacturers to finance the production of goods ordered, maintain manufacturing capacity, comply with our policies, and store finished goods in a safe location pending shipment.
We expect our independent manufacturers to finance the production of goods ordered, maintain manufacturing capacity, comply with our policies, and store finished goods in a safe location pending shipment.
In that event, it is unlikely we would be able to adjust our product prices sufficiently to eliminate the effect on our gross margin and our financial results may suffer.
In that event, it is unlikely we will be able to adjust our product prices sufficiently to eliminate the effect on our gross margin and our financial results may suffer.
Sales to our customers are on an order-by-order basis and may be cancelled or rescheduled by our customers. We rely on purchase order delivery dates as a key factor to forecast our sales and earnings, and if our customers postpone, reduce, or discontinue purchases from us, we could fail to meet our forecasted results.
Sales to our customers are on an order-by-order basis and may be cancelled or rescheduled by our customers. We rely on purchase order delivery dates as a key factor in forecasting our sales and earnings, and if our customers postpone, reduce, or discontinue purchases from us, we could fail to meet our forecasted results.
In addition, if our domestic DC operations 15 Table of Contents and scaling efforts are impeded or delayed for any reason, it could result in shipment delays or the inability to deliver product at all, which would result in lost sales, strain our relationships with customers and consumers, and cause harm to our reputation, any of which could have a material adverse effect on our business.
In addition, if our domestic warehouse and DC operations and scaling efforts are impeded or delayed for any reason, it could result in shipment delays or the inability to deliver product at all, which would result in lost sales, strain our relationships with customers and consumers, and cause harm to our reputation, any of which could have a material adverse effect on our business.
Although we continue to invest in research and development to refine our materials and develop new properties for specific applications, if we fail to introduce technical innovation in our products or experience issues with the quality of our products or materials, consumer demand for our products could decline and we may experience reputational damage.
Although we continue to refine our materials and develop new properties for specific applications, if we fail to introduce technical innovation in our products or experience issues with the quality of our products or materials, consumer demand for our products could decline and we may experience reputational damage.
As a result, we believe our future success and growth depends, in part, on the ability of our key business processes and systems, including those utilizing artificial intelligence (AI) such as generative AI, to prevent the theft, loss, misuse, unauthorized disclosure, or unauthorized access of this information, and to respond quickly and effectively if data security incidents occur.
As a result, we believe our future success and growth depends, in part, on the ability of our systems, including those utilizing artificial intelligence (AI) such as generative AI, to prevent the theft, loss, misuse, or unauthorized access of this information, and to respond quickly and effectively if data security incidents occur.
Although we are aggressive in legal and other actions in pursuing those who infringe on our intellectual property rights, we cannot guarantee that 26 Table of Contents the actions we have taken will be adequate to protect our brands in the future, especially because some countries’ laws do not protect these rights to the same extent as US laws.
Although we are aggressive in legal and other actions in pursuing those who infringe on our intellectual property rights, we cannot guarantee that the actions we have taken will be adequate to protect our brands in the future, especially because some countries’ laws do not protect these rights to the same extent as US laws.
As we continue to increase our international operations, our sales and expenditures in foreign currencies are expected to become more material and subject to foreign currency exchange rate fluctuations. A significant portion of our international operating expenses are paid in local currencies and our foreign distributors typically sell our products in local currency, which affects the price to foreign consumers.
As we continue to expand our international operations, our sales and expenditures in foreign currencies are expected to become increasingly material and subject to foreign currency exchange rate fluctuations. A significant portion of our international operating expenses are paid in local currencies and our foreign distributors typically sell our products in local currency, which affects the price to foreign consumers.
The establishment of ESG criteria and key metrics, as well as the collection of relevant ESG data subject to developing internal controls and processes, can be costly, challenging, and time consuming, and is subject to evolving ESG reporting standards and regulations.
The establishment of ESG criteria and key metrics, as well as the collection of relevant data subject to evolving internal controls and processes, can be costly, complex, and time consuming, and is subject to evolving reporting standards and regulations.
If the sheepskin provided by these tanneries and the resulting products we produce do not conform to our quality or sustainability specifications or fail to meet consumer expectations, we could experience reduced demand for our products, a higher rate of customer returns, and negative effects on the image of our brands, any of which could have a material adverse effect on our business.
If this sheepskin and the resulting products we produce do not conform to our quality or sustainability specifications or fail to meet consumer expectations, we could experience reduced demand for our products, a higher rate of customer returns, and negative effects on the image of our brands, any of which could have a material adverse effect on our business.
We rely upon a broad network of warehouse and distribution facilities to store, sort, package and distribute our products.
We rely upon a broad network of warehouses and distribution facilities to store, sort, package and distribute our products.
We could also experience increased costs for energy, production, transportation, raw and other materials, as well as higher insurance premiums and deductibles, which could adversely affect our operations. Our insurance may not be sufficient to cover losses that we may sustain.
We could also experience increased costs for energy, 18 Table of Contents production, transportation, raw and other materials, as well as higher insurance premiums and deductibles, which could adversely affect our operations. Our insurance may not be sufficient to cover losses that we may sustain.
Our success also depends in part on the continued operation of our key business processes, including our IT and global communications systems. We rely on third-party IT service providers worldwide for many of our IT functions, including network, hardware, and software configuration.
Our success also depends in part on the continued operation of our key business processes, including our IT and global communications systems. We rely on third-party IT service providers for many of our worldwide IT functions, including network, hardware, and software configuration, and on internal networks to support business processes.
We rely upon independent manufacturers and their respective material suppliers for most of our production needs, the majority of which are located in China and Vietnam, and we do not have direct control over these manufacturers or their suppliers.
We rely upon independent manufacturers and their respective material suppliers for most of our production needs, the majority of which are located in Southeast Asia, predominately in Vietnam, and we do not have direct control over these manufacturers or their suppliers.
Further, as our brands transition to suppliers with preferred materials, we may be subject to increased costs or supply constraints, which could reduce our sales and profitability and have a material adverse effect on our financial condition and results of operations.
Further, as our brands transition to suppliers with recycled, renewable, regenerated, and certified/natural materials (preferred materials), we may be subject to increased costs or supply constraints, which could reduce our sales and profitability and have a material adverse effect on our financial condition and results of operations.
We face a risk that key customers may not increase their business with us as we expect or may significantly decrease their business with us or terminate our relationship. Although no single customer accounted for 10.0% or more of our total net sales during fiscal year 2024, our top ten customers made up 24.2% of total net sales.
We face a risk that key customers may not increase their business with us as we expect or may significantly decrease their business with us or terminate our relationship. Although no single customer accounted for 10.0% or more of our total net sales during fiscal year 2025, our top ten customers made up 23.7% of total net sales.
The trading price of our common stock could be affected by a number of factors, including, but not limited to the following: • changes in expectations of our future financial performance and results of operations; • changes in estimates of our performance by securities analysts and other market participants, or our failure to meet such estimates; • changes in our stockholder base or public actions taken by investors; • market research and opinions published by securities analysts and other market participants, and the response to such publications; • quarterly fluctuations in our sales, margins, expenses, financial position, and results of operations; • the financial stability of our customers, manufacturers, and suppliers; • legal proceedings, regulatory actions, and legislative changes; • the declaration of stock or cash dividends, share repurchases, or stock or reverse stock splits; • consumer confidence and discretionary spending levels; • broad market fluctuations in volume and price; • general market, political, and economic conditions, including recessionary conditions; and • a variety of risk factors, including the ones described herein and in our other SEC filings.
The trading price of our common stock could be affected by a number of factors, including, but not limited to the following: • changes in expectations regarding our future financial performance and results of operations; • changes in estimates of our performance by securities analysts and other market participants, or our failure to meet such estimates; • changes in our stockholder base or public actions taken by investors; • market research and opinions published by securities analysts and other market participants, and the response to such publications; 25 Table of Contents • third-party data sources estimating our intra-quarter financial performance; • quarterly fluctuations in our sales, margins, expenses, financial position, and results of operations; • the financial stability of our customers, manufacturers, and suppliers; • legal proceedings, regulatory actions, and legislative changes; • the declaration of stock or cash dividends, share repurchases, or stock or reverse stock splits; • consumer confidence and discretionary spending levels; • broad market fluctuations in volume and price; • general market, political, and economic conditions, including evolving international trade dynamics and recessionary conditions; and • a variety of risk factors, including the ones described herein and in our other SEC filings.
Further, to continue to develop new products and successfully operate and grow our key business processes, it is important for us to continue hiring and retaining personnel in highly skilled footwear, apparel and accessories design, marketing, merchandising, sourcing, technology, operations, including our DCs and retail stores, and support functions.
Further, to continue to develop new products and successfully operate and grow our key business processes, it is important for us to continue hiring and retaining talent in highly skilled footwear, apparel and accessories design, marketing, merchandising, sourcing, technology, operations, and support functions.
Our revolving credit facility agreements expose us to certain risks. From time to time, we have financed our liquidity needs in part from borrowings made under our revolving credit facilities. Our ability to borrow under our revolving credit facilities may be limited if the lenders believe there has been a material adverse change to our business.
From time to time, we have financed our liquidity needs in part from borrowings made under our revolving credit facilities. Our ability to borrow under our revolving credit facilities may be limited if the lenders believe there has been a material adverse change to our business.
We conduct business outside the US, which exposes us to foreign currency exchange rate risk, and could have a negative effect on our financial results. We operate on a global basis, with 33.2% of our total net sales for the year ended March 31, 2024, from operations outside the US.
We conduct business outside the US, which exposes us to foreign currency exchange rate risk, and could have a negative effect on our financial results. We operate on a global basis, with 36.1% of our total net sales for the year ended March 31, 2025, generated from operations outside the US.
If we are found to have violated laws concerning the privacy and security of consumers’ or other individuals’ personal information, we could be subject to civil or criminal penalties, which could increase our liabilities and harm our reputation or our business. There are a number of domestic and international laws protecting the privacy and security of personal information.
If we are found to have violated laws concerning the privacy and security of consumers’ or other individuals’ personal information, we could be subject to civil or criminal penalties, which could increase our liabilities and harm our reputation or our business.
We are subject to numerous data privacy and security risks, which may prevent us from maintaining the privacy of this information, result in the disruption of our business, and require us to expend significant resources attempting to secure and protect such information and respond to incidents, any of which could materially adversely affect our business, financial condition, or results of operations.
Data privacy and security incidents may prevent us from maintaining the privacy of this information, result in the disruption of our business, and require us to expend significant resources to secure such information and respond to incidents, any of which could materially adversely affect our business, financial condition, or results of operations.
As we manage product availability from supply chain or other disruptions, the timing of sales to our wholesale partners and consumers may be affected, which may result in increased risk of order cancellations.
As we manage product availability from disruptions, the timing of sales to our wholesale partners and consumers may be affected, which may result in an increased risk of order cancellations.
The purchase of these products is discretionary and is therefore highly dependent upon the level of consumer confidence and discretionary spending.
The purchase of these 12 Table of Contents products is discretionary and is therefore highly dependent upon the level of consumer confidence and discretionary spending.
These events could also adversely affect the supply of raw materials, including sheepskin and leather, which are key resources in the production of our products, disrupt the operation of our supply chain and the productivity of our contract manufacturers, increase our production costs, impose capacity restraints, and affect the types of products that consumers purchase.
These events could also adversely affect the supply of raw materials, including sheepskin and leather, disrupt the operation of our supply chain and the productivity of our contract manufacturers, increase our production costs, impose capacity restraints, and affect the types of products consumers purchase.
Any failure on our part to provide attractive, effective, reliable, secure, user-friendly e-commerce websites that offer a wide assortment of merchandise with rapid delivery options and that continually meet the changing expectations of online shoppers or any failure to provide attractive digital experiences to our customers could place us at a competitive disadvantage, result in the loss of e-commerce and other sales, harm our reputation with consumers, have an adverse effect on the growth of our e-commerce operations globally and have an adverse effect on our business and results of operations.
Any failure on our part to provide effective, reliable, secure, user-friendly e-commerce websites that offer a wide assortment of merchandise with rapid delivery options and that continually meet the changing expectations of consumers could place us at a competitive disadvantage, result in the loss of e-commerce and other sales, harm our reputation, have an adverse 23 Table of Contents effect on the growth of our e-commerce websites and have an adverse effect on our business and results of operations.
Because sheepskin is used to manufacture a significant portion of our UGG brand products, any legal or social impediments to the sale of sheepskin products, especially within our large target markets, could have a material adverse effect on our business, financial condition, and results of operations.
Because sheepskin is used to manufacture a significant portion of our UGG brand products, any legal or social impediments to the sale of sheepskin products, especially within our large target markets, could have a material adverse effect on our business, financial condition, and results of operations. We rely on technical innovation to compete in the market for our products.
The tax laws applicable to our business are complex, and changes in tax laws as well as audits by various taxing authorities could increase our worldwide tax rate and may subject us to additional tax liabilities which may materially affect our financial position and results of operations .
The tax laws applicable to our business are complex, and changes in tax laws or audits by taxing authorities could increase our worldwide tax rate and may subject us to additional tax liabilities, which may materially affect our financial position and results of operations . Changes in US and foreign tax laws, regulations, and treaties could materially affect our business.
Many of our consumers shop with us through our Company-owned e-commerce websites or through third party digital marketplaces on which we operate. Consumer expectations and related competitive pressures have increased and are expected to continue to increase relative to various aspects of our e-commerce operations, including speed of product delivery, shipping charges, return privileges, and other evolving expectations.
Many of our consumers shop with us through our Company-owned e-commerce websites or through third-party digital marketplaces. Consumer expectations and competitive pressures, including speed of product delivery, shipping charges, return privileges, and other evolving expectations, have increased and are expected to continue to increase.
A significant natural disaster or other event that disrupts our operations or those of our partners or customers could have a material adverse effect on our business, results of operations and financial condition.
Any event that disrupts our operations or those of our partners or customers could have a material adverse effect on our business, results of operations and financial condition.
The protection of this information is vitally important to us as the loss, theft, misuse, or unauthorized disclosure or access of such information could lead to significant reputation or competitive harm, result in litigation, expose us to regulatory proceedings, and cause us to incur substantial losses.
The loss, theft, misuse, or unauthorized disclosure or access to such information could lead to significant reputation or competitive harm, result in litigation, expose us to regulatory proceedings, and cause us to incur substantial losses.
Our future growth depends in part on our expansion efforts outside of North America (international growth strategy). For example, we have opened HOKA brand retail locations in international markets through Company-owned stores and through third-party partners, and we have expanded our international flagship store presence for the UGG and HOKA brands.
Our future growth depends in part on our expansion efforts outside of North America (international growth strategy). For example, we have opened UGG and HOKA brand retail locations in international markets through Company-owned stores and through third-party retailers.
Investor advocacy groups, certain institutional investors, investment funds, stockholders, customers, consumers, non-governmental organizations, and regulators, such as the SEC, are increasingly focused on corporate responsibility, specifically on the ESG practices of companies and the implications of the social and environmental costs of their investments.
Investor advocacy groups, certain institutional investors, investment funds, stockholders, customers, consumers, employees, non-governmental organizations, the media, including social media, and regulators, such as the SEC, are increasingly scrutinizing corporate responsibility, specifically related to ESG practices and disclosures of companies and the implications of the social and environmental costs of their investments.
If our stock price experiences volatility, it may adversely affect our ability to recruit, retain, and motivate qualified personnel and we may be unable to execute our growth plan or achieve our long-term strategic objectives, our results of operations may suffer, and it may damage our reputation as a preferred employer, which would challenge our ability to effectively compete across the global labor market.
If our stock price is volatile, it may adversely affect our ability to recruit and retain qualified talent and we may be unable to achieve our long-term strategic objectives, our results of operations may suffer, and it may damage our reputation as a preferred employer, which would challenge our ability to effectively compete across the global labor market.
Any court decision or settlement that invalidates or limits trademark protection of our brands, which allows a third-party to continue to sell products similar to our products, or that allows a manufacturer or distributor to continue to sell counterfeit products, could lead to intensified competition and a material reduction in our sales, and could have a material adverse effect on the value of our brands.
Any court decision or settlement that invalidates or limits trademark protection of our brands, which allows a third-party to continue to sell products similar to our products, or that allows a manufacturer or distributor to continue to sell counterfeit products, could lead to intensified competition and a material reduction in our sales, and could have a material adverse effect on the value of our brands. 24 Table of Contents Our revolving credit facility agreements expose us to certain risks.
In the US, we distribute products primarily through self-managed US DCs in Moreno Valley, California, and in Mooresville, Indiana (including the recent expansion to a second location that became operational in October 2023), which feature a complex warehouse management system that enables us to efficiently pack products for direct shipment to our customers and consumers.
In the US, we distribute products primarily through self-managed warehouses and DCs in Moreno Valley, California, and in Mooresville, Indiana, which feature a complex warehouse management system that enables us to efficiently pack products for direct shipment to our customers and consumers.
Competition for executive officers, key employees, and skilled personnel is intense within our industry and there continues to be upward pressure on the compensation paid to these professionals. Changes to our office environment, adoption of new work models, and our expectations about when or how often employees work on-site or remotely may not meet our employees’ expectations.
Competition for executive officers, key employees, and skilled talent is intense within our industry and there continues to be upward pressure on the compensation paid to these professionals. Changes to our office environment or work models may not meet our employees’ expectations.
Further, supply chain disruptions may drive higher inventory procurement positions that could negatively affect our gross margins as a result of selling excess quantities though close out channels.
Further, supply chain disruptions may drive higher inventory procurement positions that could negatively affect our 13 Table of Contents gross profit as a percentage of net sales (gross margin) as a result of selling excess quantities though close out channels.
RISKS RELATED TO TECHNOLOGY, DATA SECURITY AND PRIVACY A security breach or other disruption to our IT systems could result in the loss, theft, misuse, unauthorized disclosure, or unauthorized access of customer, supplier, or sensitive Company information or could disrupt our operations, which could damage our relationships with customers, suppliers or employees, expose us to litigation or regulatory proceedings, or harm our reputation, any of which could materially adversely affect our business, financial condition, or results of operations.
RISKS RELATED TO TECHNOLOGY, DATA SECURITY AND PRIVACY A security breach or disruption to our IT systems could materially harm our business, disrupt our operations, or result in unauthorized disclosure of sensitive information, which could damage our relationships, expose us to litigation or regulatory proceedings, or harm our reputation, any of which could materially adversely affect our business and results of operations.
Cyber-attacks or data incidents could remain undetected for some period, which could result in significant harm to our systems, as well as unauthorized access to the information stored on and transmitted by our systems. Further, despite our security efforts and training, our employees may purposefully or inadvertently cause security breaches.
Cyber-attacks or data incidents could remain undetected for some period, which could result in significant harm to our systems, as well as unauthorized access to the information stored on and transmitted by our systems.
These risks include: • foreign currency exchange rates fluctuations, most significantly, but not limited to, the Chinese Yuan, Great British Pound, and Euro, which affect the prices at which products are sold to international consumers; • limitations on our ability to move currency out of international markets; • burdens of complying with a variety of foreign laws and regulations, which may change unexpectedly, and the interpretation and application of such laws and regulations; • legal costs related to defending allegations of non-compliance with foreign laws; • inability to import products into a foreign country; • difficulties associated with promoting and marketing products in unfamiliar cultures; • political or economic uncertainty or instability, including the Russia-Ukraine and Israel-Hamas conflicts, which has disrupted the global economy and has the potential to reduce levels of consumer spending, which could have a material adverse effect on our business, particularly our UGG and HOKA brands’ net sales; • changes in unemployment rates and consumer spending; • anti-American sentiment in international markets in which we operate; • changes in diplomatic and trade relationships between the US and other countries; and 23 Table of Contents • general economic fluctuations in specific countries or markets.
These risks include: • foreign currency exchange rate fluctuations between the US dollar and primarily the currencies of Europe, Asia, Canada, and Latin America affect the prices at which products are sold to international consumers; • limitations on our ability to move currency out of international markets; • burdens of complying with a variety of foreign laws and regulations, which may change unexpectedly, and the interpretation and application of such laws and regulations; • legal costs related to defending allegations of non-compliance with foreign laws; • inability to import products into a foreign country; • supply chain logistics disruptions, such as shipping disruptions in the Red Sea; • heightened cybersecurity threats; • difficulties associated with promoting and marketing products in unfamiliar cultures; • political or economic uncertainty or instability, which has disrupted the global economy and has the potential to reduce levels of consumer spending, which could have a material adverse effect on our business, particularly our UGG and HOKA brands’ net sales; • changes in unemployment rates and consumer spending; • anti-American sentiment in international markets in which we operate; • changes in diplomatic and trade relationships between the US and other countries; and 21 Table of Contents • general economic fluctuations in specific countries or markets.
Any tightening of security procedures could worsen these delays and increase our costs. Our sales in international markets are subject to a variety of legal, regulatory, political, cultural, and economic risks that may adversely affect our results of operations in certain regions.
Our sales in international markets are subject to a variety of legal, regulatory, political, cultural, and economic risks that may adversely affect our results of operations in certain regions.
Further, as of March 31, 2024, we have two customers that represent 31.2% of trade accounts receivable, net. Trade accounts receivable, net are typically 16 Table of Contents unsecured and thus subject us to a risk that we will be unable to timely collect on amounts owed, which could affect our revenue and liquidity.
Further, as of March 31, 2025, we have one customer that represents 13.6% of trade accounts receivable, net. Trade accounts receivable, net are typically unsecured and thus subject us to a risk that we will be unable to timely collect on amounts owed, which could affect our revenue and liquidity.
Additionally, external events, such as the Russia-Ukraine and Israel-Hamas conflicts, can increase the likelihood of such incidents, and our risk and exposure to these matters remains heightened because of, among other things, the evolving nature of these threats, the current global economic and political environment, our prominent size and scale, the advances in computer capabilities and AI, and the interconnectivity and interdependence of third parties to our systems.
Our risk and exposure to these matters remains heightened because of, among other things, the evolving nature of these threats, the current global economic and political environment, our prominent size and scale, the advances in computer capabilities and AI, and the interconnectivity and interdependence of third parties to our systems.
In addition, if a cyber-attack or other data incident results in the loss, theft, misuse, unauthorized disclosure, or unauthorized access of personal, confidential, or sensitive information belonging to our customers, suppliers, or employees, it could put us at a competitive disadvantage, result in the deterioration of our customers’ confidence in our brands, cause our suppliers to reconsider their relationship with us or impose onerous contractual provisions, and subject us to litigation, liability, fines, and penalties.
In addition, a cyber-attack or other data incident could put us at a competitive disadvantage, result in the deterioration of our customers’ confidence in our brands, cause our suppliers to reconsider their relationship with us or impose onerous contractual provisions, and subject us to litigation, liability, fines, and penalties.
If our 3PLs fail to manage these responsibilities, or if their operations are disrupted as a result of factors outside of their control, such as sanctions that could in the future be imposed on China by the US government, our distribution operations could face significant disruption.
While we believe we conduct appropriate diligence before entering into service agreements with 3PLs, if our 3PLs fail to manage these responsibilities, or if their operations are disrupted as a result of factors outside of their control, such as sanctions that could in the future be imposed on other countries by the US government, our distribution operations could face significant disruption.
Although we maintain disaster recovery plans, such events could disrupt our operations or those of our independent manufacturers, suppliers and customers, including through the inability of personnel to work, destruction of facilities, loss of life, and adverse effects on supply chains, power, infrastructure and the integrity of IT systems, all of which could materially increase 19 Table of Contents our costs and expenses, delay or decrease sales, and disrupt our ability to maintain business continuity.
Although we maintain disaster recovery plans, such events could disrupt our operations, including through the inability of talent to work, loss of life, and adverse effects on supply chains, power, infrastructure and the integrity of IT systems, any of which could materially increase our costs and expenses, decrease sales, and disrupt our business continuity.
We may not succeed in implementing our growth strategies, including through identifying new retail store locations that meet our requirements, in which case we may not be able to take advantage of certain market opportunities and may become less competitive.
We may not succeed in implementing our growth strategies, in which case we may not be able to take advantage of certain market opportunities and may become less competitive.
We are increasingly using social media to interact with our consumers and as a means to enhance their shopping experience.
Consumers are increasingly using mobile platforms to shop with us and with our competitors, to do comparison shopping, and to engage with us and our competitors. We are increasingly using social media to interact with our consumers and as a means to enhance their shopping experience.
For example, during October 2023, we announced that we intend to divest the Sanuk brand. These transactions involve financial and operational risks, including diverting management and employee time and attention away from other aspects of our business, separating personnel and financial and other systems, impairments, and adversely affecting relationships with existing suppliers and customers.
These transactions involve financial and operational risks, including diverting management and employee time and attention away from other aspects of our business, separating personnel and financial and other systems, impairments, and adversely affecting relationships with existing suppliers and customers.
Our business involves the storage and transmission of a significant amount of personal, confidential, or sensitive information, including the personal information of our customers and employees, credit card information, and our proprietary financial, operational, and strategic information.
We store and transmit a significant amount of sensitive information, including the personal information of our customers and employees, credit card information, and our proprietary financial, operational, and strategic information.
Port congestion, temporary closures, and worker shortages may disrupt the operations of our independent manufacturers and 3PLs, as well as those of our DCs, and may increase the global lead-time for shipments of our products.
Port congestion, temporary closures, vessel availability and reliability, worker shortages, government-imposed restrictions, such as border closures and shipment restrictions, as well as trade policy changes, may disrupt the operations of our independent manufacturers and 3PLs, as well as those of our warehouses and DCs, and may increase the global lead-time for shipments of our products.
If we fail to continue to effectively scale and adapt our digital platforms to accommodate increased consumer demand, our business may be subject to interruptions, delays or failures and consumer demand for our products and digital experiences could decline.
In addition, as use of our digital platforms grows, we will need an increasing amount of technical infrastructure. If we fail to effectively scale and adapt our digital platforms to accommodate increased consumer demand, our business may be subject to interruptions, delays or failures and consumer demand for our products and digital experiences could decline.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+1 added−2 removed6 unchanged
Biggest changeThese updates cover various topics, such as efforts to 29 Table of Contents enhance our cybersecurity posture, operational and incident metrics, mitigation actions, and key performance indicators like cybersecurity maturity, program health, and audit and compliance activities. In addition to these regular updates, significant cybersecurity incidents and updates are escalated on an as-needed basis in accordance with our IRP.
Biggest changeOur CDDO and CISO, who head our cybersecurity and information security initiatives, provide quarterly updates to the Audit Committee, and annual updates to the full Board. These updates cover various topics, such as efforts to enhance our cybersecurity posture, operational and incident metrics, mitigation actions, and key performance indicators like cybersecurity maturity, program health, and audit and compliance activities.
Key components of our cybersecurity approach include, among other things: • establishing a dedicated action team, led by our CTO and CISO, to oversee and manage cybersecurity risks; • implementing a comprehensive cybersecurity risk assessment process and strategy based on industry standards and established frameworks such as the National Institute of Standards and Technology (NIST) Special Publication 800-61; • implementing a vendor risk management program, which includes cybersecurity and data privacy audits, evaluating vendor risk level, and monitoring risk mitigation efforts; • conducting penetration tests and security maturity assessments throughout the year; • periodically engaging independent third-party assessors to audit our cybersecurity and information system programs to evaluate their effectiveness; • implementing industry-standard technologies and processes to protect our system and data and to help detect potential suspicious activity; • maintaining access controls to safeguard data and systems; • providing annual trainings to employees on responsible information security, data security and cybersecurity practices including appropriate action to take against cybersecurity threats; • conducting periodic phishing simulations to our employees; • engaging in cybersecurity incident tabletop exercises and scenario planning exercises; • maintaining a cybersecurity and information security risk insurance policy, which insures for data incidents or breaches and other technology related exposures; and • periodically reviewing and updating our IRP, privacy policy, and other relevant policies/procedures.
Key components of our cybersecurity approach include, among other things: • establishing a dedicated action team, led by our CDDO and CISO, to oversee and manage cybersecurity risks; • implementing a comprehensive cybersecurity risk assessment process and strategy based on industry standards and established frameworks such as the National Institute of Standards and Technology (NIST) Special Publication 800-61; • implementing a vendor risk management program, which includes cybersecurity and data privacy audits, evaluating vendor risk level, and monitoring risk mitigation efforts; • conducting penetration tests and security maturity assessments throughout the year; • periodically engaging independent third-party assessors to audit our cybersecurity and information system programs to evaluate their effectiveness; • implementing industry-standard technologies and processes to protect our system and data and to help detect potential suspicious activity; • maintaining access controls to safeguard data and systems; • providing annual trainings to employees on responsible information security, data security and cybersecurity practices including appropriate action to take against cybersecurity threats; • conducting periodic phishing simulations to our employees; • engaging in cybersecurity incident tabletop exercises and scenario planning exercises; • maintaining a cybersecurity and information security risk insurance policy, which insures for data incidents or breaches and other technology related exposures; and • periodically reviewing and updating our IRP, privacy policy, and other relevant policies/procedures.
Refer to Part I, Item 1A, “Risk Factors - Risks Related to Technology, Data Security and Privacy” within this Annual Report for further information. CYBERSECURITY GOVERNANCE Our Board of Directors has delegated to the Audit Committee primary responsibility for oversight of risk assessment and risk management, including risks related to cybersecurity and information security issues.
Refer to Part I, Item 1A, “Risk Factors - Risks Related to Technology, Data Security and Privacy” within this Annual Report for further information. 27 Table of Contents CYBERSECURITY GOVERNANCE Our Board has delegated to the Audit Committee primary responsibility for oversight of risk assessment and risk management, including risks related to cybersecurity and information security issues.
Our management team works closely with our Chief Technology Officer (CTO) and Chief Information Security Officer (CISO), ensuring that our cybersecurity efforts align with our business objectives and operational needs.
Our management team works closely with our Chief Digital & Data Officer (CDDO) and Chief Information Security Officer (CISO), ensuring that our cybersecurity efforts align with our business objectives and operational needs.
In the three-year period ended March 31, 2024, our business strategy, results of operations and financial condition have not been materially affected by risks from cybersecurity threats or incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks and any future material threats or incidents.
In the three-year period ended March 31, 2025, our business strategy, results of operations and financial condition have not been materially affected by risks from cybersecurity threats, including as a result of any prior cybersecurity incidents experienced by either us or third parties, but we cannot provide assurance that they will not be materially affected in the future by such risks or any future material incidents.
Removed
Our CTO and CISO, who head our cybersecurity and information security initiatives, provide quarterly updates to the Audit Committee, and annual updates to the full Board of Directors.
Added
In addition to these regular updates, significant cybersecurity incidents and updates are escalated on an as-needed basis in accordance with our IRP. Our CDDO and CISO have extensive experience in cybersecurity. Our CDDO has served in his role since September 2024. He has over 15 years of experience in digital transformations, enterprise technology, artificial intelligence, and data management.
Removed
Our CTO and CISO have extensive experience in cybersecurity. Our CTO has served in his role since 2014. He has also served in various roles in Information Technology for over 25 years, including the oversight of Information Security for 15 years.

Item 2. Properties

Properties — owned and leased real estate

8 edited+0 added−0 removed1 unchanged
Biggest changeRefer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” within this Annual Report for further discussion and results of operations for our reportable operating segments.
Biggest changeRefer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for further discussion and results of operations for our reportable operating segments and Note 12, “Reportable Operating Segments,” of our consolidated financial statements in Part IV within this Annual Report for additional information on unallocated enterprise and shared brand expenses.
We have offices in Belgium, Canada, China, France, Germany, Hong Kong, Indonesia, Italy, Japan, the Netherlands, Switzerland, the UK, the US, and Vietnam, to perform a variety of functions, which include overseeing the quality and manufacturing standards of our products, design, product development, distribution, customer service, coordinating regional sales, operations, marketing, IT , and administration.
We have offices in Austria, Belgium, Canada, China, France, Germany, Hong Kong, Indonesia, Italy, Japan, the Netherlands, Switzerland, the UK, the US, and Vietnam, to perform a variety of functions, which include supervising and overseeing the quality and manufacturing standards of our products, design, product development, distribution, customer service, coordinating regional sales, operations, marketing, IT, and administration.
The following table provides details regarding our significant physical properties that are operational as of March 31, 2024: Facility Location Description Lease or Own Facility Size (Square Footage) Moreno Valley, California Warehouse and Distribution Center Lease 1,530,944 Mooresville, Indiana (1st location) Warehouse and Distribution Center Lease 507,600 Mooresville, Indiana (2nd location) Warehouse and Distribution Center Lease 1,015,902 Goleta, California Corporate Headquarters Own 185,094 30 Table of Contents
The following table provides details regarding our significant physical properties that are operational as of March 31, 2025: Facility Location Description Lease or Own Facility Size (Square Footage) Moreno Valley, California Warehouse and Distribution Center Lease 1,530,944 Mooresville Indiana (1st location) Warehouse and Distribution Center Lease 507,600 Mooresville Indiana (2nd location) Warehouse and Distribution Center Lease 1,015,902 Goleta, California Corporate Headquarters Own 185,094 28 Table of Contents
We also have offices in Macau and Hong Kong to coordinate logistics. Retail Stores. As of March 31, 2024, we have 49 US retail stores and 115 international retail stores, including in Austria, Belgium, Canada, China, France, Germany, Japan, the Netherlands, Switzerland, and the UK.
We also have offices in Macau and Hong Kong to coordinate logistics. Retail Stores. As of March 31, 2025, we have 50 US retail stores and 129 international retail stores, including in Austria, Belgium, Canada, China, France, Germany, Japan, the Netherlands, Switzerland, and the UK.
ITEM 2. PROPERTIES Corporate Headquarters. We have owned our 14-acre corporate headquarters located in Goleta, California since 2014. Warehouses and DCs. We have a warehouse and DC located in Moreno Valley, California, which began operations during the fourth quarter of fiscal year 2015 and have since continued optimizing and expanding our operations at this location.
ITEM 2. PROPERTIES Corporate Headquarters. We own our 14-acre corporate headquarters located in Goleta, California. Warehouses and DCs. We have a warehouse and DC located in Moreno Valley, California, which began operations during the fourth quarter of fiscal year 2015. In October 2021, we began operations in a second US warehouse and DC located in Mooresville, Indiana.
Other than our corporate headquarters, we lease our facilities, retail stores and other office spaces from unrelated parties.
Other than our corporate headquarters, we lease our warehouses and DCs, retail stores and regional offices from unrelated parties.
In October 2021, we began operations in a second US warehouse and DC located in Mooresville, Indiana. In October 2023, we began operations in a third US warehouse and DC in Mooresville, Indiana. Regional Offices.
In October 2023, we began operations in a third US warehouse and DC located in Mooresville, Indiana. We continue to optimize and invest in our operations at these locations. Regional Offices.
With the exception of certain retail stores in our DTC business, cost associated with our facilities, flagship retail stores, and other office spaces are attributable to multiple reportable operating segments and are not allocated to them; but instead reflected in unallocated overhead costs in our results of operations.
With the exception of retail stores in our DTC channel, costs associated with our warehouses and DCs and regional offices are attributable to multiple reportable operating segments and are not allocated; but instead reflected in unallocated enterprise and shared brand expenses in our results of operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed6 unchanged
Biggest changeFurthermore, we are aware of many instances throughout the world in which a third-party is using our UGG brand and HOKA brand trademarks within its internet domain name. We are investigating several manufacturers and distributors of counterfeit UGG and HOKA brand products, as well as various markets for indications of counterfeit UGG and HOKA brand products.
Biggest changeFurthermore, we are aware of many instances throughout the world in which a third-party is using our UGG brand and HOKA brand trademarks within its internet domain name. Finally, we are investigating several manufacturers and distributors of counterfeit UGG and HOKA brand products, as well as various markets for indications of counterfeit products.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStock repurchase activity under our stock repurchase program during the three months ended March 31, 2024, was as follows: Total number of shares repurchased (1) Weighted average price per share paid Dollar value of shares repurchased (2) (3) Dollar value of shares remaining for repurchase (3) January 1 - January 31, 2024 — $ — $ — $ 1,046,000 February 1 - February 29, 2024 87,196 859.94 74,983 971,017 March 1 - March 31, 2024 31,998 916.10 29,313 941,704 (1) All share repurchases were made pursuant to our stock repurchase program in open-market transactions.
Biggest changeAs of March 31, 2025, we have not exceeded the stated leverage ratios, and no defaults have occurred under these credit agreements. 30 Table of Contents Stock repurchase activity under our stock repurchase program during the three months ended March 31, 2025, was as follows: Total Number of Shares Repurchased (1) Weighted Average Price per Share Dollar Value of Shares Repurchased (2) (3) Dollar Value of Shares Remaining for Repurchase (3) January 1 - January 31, 2025 8,087 $ 185.46 $ 1,500 $ 639,192 February 1 - February 28, 2025 1,252,130 160.92 201,492 437,700 March 1 - March 31, 2025 517,524 121.73 62,999 374,701 Total 1,777,741 149.62 $ 265,991 374,701 (1) All share repurchases were made pursuant to our stock repurchase program in open-market transactions.
Refer to the section titled “Liquidity” under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 10, “Stockholders’ Equity,” of our consolidated financial statements in Part IV within this Annual Report for further information on repurchases of our common stock. 33 Table of Contents
Refer to the section titled “Liquidity” under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 10, “Stockholders’ Equity,” of our consolidated financial statements in Part IV, within this Annual Report, for further information on repurchases of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock has traded under the symbol DECK on the New York Stock Exchange (NYSE) since May 2014 and was previously traded on the Nasdaq Global Select Market.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information . Our common stock has traded under the symbol DECK on the New York Stock Exchange (NYSE) since May 2014 and was previously traded on the Nasdaq Global Select Market. Holders of Record.
As of May 9, 2024, we had 31 stockholders of record based on the records of our transfer agent, which does not include beneficial owners of our common stock whose shares are held in the names of various securities brokers, dealers, and registered clearing agencies.
As of May 9, 2025, we had 28 stockholders of record based on the records of our transfer agent, which does not include beneficial owners of our common stock whose shares are held in the names of various securities brokers, dealers, and registered clearing agencies. Unregistered Sales of Equity Securities.
Below is a graph comparing the percentage change in the cumulative total return on our common stock against the cumulative total return of the S&P 500 Index, the S&P 500 Apparel, Accessories & Luxury Goods Index, and the NYSE Composite Index for the five fiscal-year periods commencing March 31, 2019, and ended March 31, 2024.
STOCK PERFORMANCE GRAPH Below is a graph comparing the percentage change in the cumulative total return on our common stock against the cumulative total return of the Standard & Poor’s 500 Stock Index (S&P 500 Index) and the S&P 500 Apparel, Accessories & Luxury Goods Index for the five fiscal-year periods commencing March 31, 2020, and ended March 31, 2025.
Our Board of Directors last approved an additional authorization of $1,200,000 on July 27, 2022, to repurchase our common stock under the same conditions as the prior stock repurchase programs (collectively, the stock repurchase program). Our stock repurchase program does not obligate us to acquire any amount of common stock and may be suspended at any time at our discretion.
As of March 31, 2025, our Board last approved an authorization of $1,200,000 on July 27, 2022. Our stock repurchase program does not obligate us to acquire any amount of common stock and may be suspended at any time at our discretion.
The agreements under our revolving credit facilities allow us to make stock repurchases under this program, so long as we do not exceed certain leverage ratios. As of March 31, 2024, we have not exceeded the stated leverage ratios and no defaults have occurred under our credit agreements.
The credit agreements governing our revolving credit facilities allow us to make stock repurchases under this program, so long as we do not exceed certain leverage ratios.
DIVIDEND POLICY We have not declared or paid any cash dividends on our common stock since our inception. Our current revolving credit agreements allow us to declare and pay cash dividends, as long as we do not exceed certain leverage ratios and no event of default has occurred.
Our current revolving credit agreements allow us to declare and pay cash dividends, as long as we do not exceed certain leverage ratios, and no event of default has occurred. However, we currently do not anticipate declaring or paying any cash dividends.
However, we currently do not anticipate declaring or paying any cash dividends. 32 Table of Contents STOCK REPURCHASE PROGRAM Our Board of Directors has approved various authorizations under our stock repurchase program to repurchase shares of our common stock in the open market or in privately negotiated transactions, subject to market conditions, applicable legal requirements, and other factors.
STOCK REPURCHASE PROGRAM Our Board has approved various authorizations under our stock repurchase program to repurchase shares of our common stock in the open market or in privately negotiated transactions, subject to market conditions, applicable legal requirements, and other factors (collectively, the stock repurchase program).
(2) The dollar value of shares repurchased excludes the cost of broker commissions, excise taxes, and other costs. (3) May not calculate on rounded dollars. Subsequent to March 31, 2024, through May 9, 2024, we repurchased 130,927 shares at a weighted average price of $836.20 per share for $109,481, and had $832,223 remaining authorized under the stock repurchase program.
(2) The dollar value of shares repurchased excludes the cost of broker commissions, excise taxes, and other costs. (3) May not calculate on rounded dollars. Subsequent to March 31, 2025, through May 9, 2025, we repurchased 765,321 shares of our common stock at a weighted average price of $109.75 per share for $83,998.
We did not sell any equity securities that were not registered under the Securities Act during the year ended March 31, 2024. STOCK PERFORMANCE GRAPH On March 18, 2024, we were added to the Standard & Poor’s 500 Stock Index (S&P 500 Index).
We did not sell any equity securities that were not registered under the Securities Act during the year ended March 31, 2025.
Total return assumes reinvestment of dividends, though we have not declared or paid any cash dividends on our common stock since our inception. The data represented in the graph assumes one hundred dollars invested in our common stock and in each of the referenced indices on March 31, 2019.
The data represented in the graph assumes one hundred dollars invested in our common stock and in each of the referenced indices on March 31, 2020. The stock performance shown on the below graph is not necessarily indicative of future performance.
Removed
We replaced the NYSE Composite Index (NYSE Composite Index) with the S&P 500 Index for the purposes of our stock performance graph, as we believe this index is a more relevant benchmark to measure our performance. We have continued to present the NYSE Composite Index within this Annual Report as a transitional measure.
Added
We use the S&P 500 Index as we believe it is the benchmark most relevant to measure our performance. Total return assumes reinvestment of dividends, though we have not declared or paid any cash dividends on our common stock since our inception.
Removed
The stock performance shown on the below graph is not necessarily indicative of future performance.
Added
We will not make or endorse any prediction as to future stock performance. 29 Table of Contents Years Ended March 31, 2020 2021 2022 2023 2024 2025 Deckers Outdoor Corporation $ 100.00 $ 246.58 $ 204.31 $ 335.44 $ 702.26 $ 500.46 S&P 500 Index 100.00 156.35 180.81 166.84 216.69 234.57 S&P 500 Apparel, Accessories & Luxury Goods Index 100.00 204.01 161.34 111.79 95.06 86.86 DIVIDEND POLICY We have not declared or paid any cash dividends on our common stock since our inception.
Removed
We will not make or endorse any prediction as to future stock performance. 31 Table of Contents Years Ended March 31, 2019 2020 2021 2022 2023 2024 Deckers Outdoor Corporation $ 100.0 $ 91.2 $ 224.8 $ 186.3 $ 305.8 $ 640.2 S&P 500 Index 100.0 93.0 145.4 168.2 155.2 201.6 S&P 500 Apparel, Accessories & Luxury Goods Index 100.0 49.8 101.5 80.3 55.6 47.3 The NYSE Composite Index 100.0 83.4 129.3 141.0 133.3 162.7 The stock performance graph above is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section.
Added
As of May 9, 2025, we had $290,704 remaining authorized under the stock repurchase program. Amounts may not calculate on rounded dollars. On May 21, 2025, our Board approved an additional authorization of $2,250,000 to repurchase shares of our common stock under the same conditions as the prior stock repurchase program.
Removed
Such information shall not be deemed incorporated by reference into any filing of the Company under the Securities Act , or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing, except as otherwise expressly set forth by specific reference in such filing.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe net increase in SG&A expenses, compared to the prior period, was primarily the result of the following: • Increased payroll and related costs of approximately $107,500, primarily due to higher employee headcount and performance-based compensation. • Increased variable advertising and promotion expenses of approximately $78,900, primarily due to higher promotional marketing expenses for the HOKA and UGG brands to drive global brand awareness and market share gains, highlight new product categories, and provide localized marketing. • Increased other variable net selling expenses of approximately $46,300, primarily due to higher rent and occupancy expenses and credit card fees. • Increased other operating expenses of approximately $55,500, primarily due to higher infrastructure investments and related depreciation, including for IT expenses for programming and software costs, as well as higher travel costs, impairments, and contract and legal expenses.
Biggest changeDrivers of significant net changes in SG&A expenses, compared to the year ended March 31, 2023, were as follows: • Increased payroll and related costs of approximately $107,500, primarily due to higher headcount from investments in talent, including for the UGG and HOKA brands as well as enterprise functions, along with higher variable payroll costs to support higher sales, including performance-based compensation. • Increased advertising, marketing, and promotion expenses of approximately $77,700, primarily due to higher promotional marketing expenses for the HOKA and UGG brands to drive global brand awareness and market share gains, highlight new product categories, and provide localized marketing. • Increased other SG&A expenses of approximately $65,500, primarily due to higher unallocated enterprise and shared brand expenses of approximately $46,700 for IT expenses for programming and software costs, 3PL service fees, legal fees, contract services, travel costs, and other operating expenses, and higher HOKA brand expenses of approximately $14,400 for credit card fees and travel costs. 41 Table of Contents • Increased rent and occupancy of approximately $21,400, primarily due to higher rent expenses resulting from retail store footprint expansion for the HOKA brand, as well as from UGG brand retail stores and enterprise offices. • Increased depreciation and other related costs of approximately $16,100, primarily due to higher unallocated enterprise and shared brand expenses for infrastructure investments and related depreciation, as well as an impairment for Sanuk brand definite-lived intangible assets. • Decreased net foreign currency-related remeasurement losses of approximately $2,900, primarily due to favorable changes in Canadian and Asian exchange rates against the US dollar.
We can cancel a significant portion of the purchase obligations under certain circumstances; however, the occurrence of such circumstances is generally limited. As a result, the amount does not necessarily reflect the dollar amount of our binding commitments or minimum purchase obligations, and instead reflects an estimate of our future payment commitments based on information currently available.
We can cancel a significant portion of the purchase obligations under certain circumstances; however, the occurrence of such circumstances is generally limited. As a result, the reported amount does not necessarily reflect the dollar amount of our binding commitments or minimum purchase obligations and instead reflects an estimate of our future payment commitments based on information currently available.
In addition, management has considered the potential impact of macroeconomic factors, including inflation, foreign currency exchange rate volatility, changes in interest rates, changes in commodity pricing, changes in consumer discretionary spending, and recessionary concerns, on our business and operations.
In addition, management has considered the potential impact of macroeconomic factors, including changes in tariff rates, inflation, foreign currency exchange rate volatility, changes in interest rates, changes in commodity pricing, changes in consumer discretionary spending, and recessionary concerns, on our business and operations.
However, the actual amount of our future capital expenditures may differ significantly from this estimate depending on numerous factors, including the timing of facility and retail store openings, as well as unforeseen needs to replace or refresh existing assets. 44 Table of Contents Stock Repurchase Program .
However, the actual amount of our future capital expenditures may differ significantly from this estimate depending on numerous factors, including the timing of facility and retail store openings, as well as unforeseen needs to replace or refresh existing assets. 45 Table of Contents Stock Repurchase Program .
Unless otherwise indicated, all figures herein are expressed in thousands, except for per share and share data. OVERVIEW We are a global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories developed for both everyday casual lifestyle use and high-performance activities. We market our products primarily under six proprietary brands: UGG, HOKA, Teva, Sanuk, Koolaburra, and AHNU.
Unless otherwise indicated, all figures herein are expressed in thousands, except for per share and share data. OVERVIEW We are a global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories developed for both everyday casual lifestyle use and high-performance activities. We market our products primarily under five proprietary brands: UGG, HOKA, Teva, AHNU, and Koolaburra.
While the impact of seasonality has been mitigated to some extent, we expect our working capital requirements will continue to fluctuate from period to period. 43 Table of Contents Contractual Obligations.
While the impact of seasonality has been mitigated to some extent, we expect our working capital requirements will continue to fluctuate from period to period. 44 Table of Contents Contractual Obligations.
Results of operations were as follows: Years Ended March 31, 2024 2023 Change Amount % Amount % Amount % Net sales $ 4,287,763 100.0 % $ 3,627,286 100.0 % $ 660,477 18.2 % Cost of sales 1,902,275 44.4 1,801,916 49.7 (100,359) (5.6) Gross profit 2,385,488 55.6 1,825,370 50.3 560,118 30.7 Selling, general, and administrative expenses 1,457,974 34.0 1,172,619 32.3 (285,355) (24.3) Income from operations 927,514 21.6 652,751 18.0 274,763 42.1 Total other income, net (51,427) (1.2) (13,331) (0.4) 38,096 285.8 Income before income taxes 978,941 22.8 666,082 18.4 312,859 47.0 Income tax expense 219,378 5.1 149,260 4.1 (70,118) (47.0) Net income 759,563 17.7 516,822 14.3 242,741 47.0 Total other comprehensive loss, net of tax (11,698) (0.3) (14,080) (0.4) 2,382 16.9 Comprehensive income $ 747,865 17.4 % $ 502,742 13.9 % $ 245,123 48.8 % Net income per share Basic $ 29.36 $ 19.50 $ 9.86 50.6 % Diluted $ 29.16 $ 19.37 $ 9.79 50.5 % Net Sales.
Results of operations were as follows: Years Ended March 31, 2024 2023 Change Amount % Amount % Amount % Net sales $ 4,287,763 100.0 % $ 3,627,286 100.0 % $ 660,477 18.2 % Cost of sales 1,902,275 44.4 1,801,916 49.7 (100,359) (5.6) Gross profit 2,385,488 55.6 1,825,370 50.3 560,118 30.7 Selling, general, and administrative expenses 1,457,974 34.0 1,172,619 32.3 (285,355) (24.3) Income from operations 927,514 21.6 652,751 18.0 274,763 42.1 Total other income, net (51,427) (1.2) (13,331) (0.4) 38,096 285.8 Income before income taxes 978,941 22.8 666,082 18.4 312,859 47.0 Income tax expense 219,378 5.1 149,260 4.1 (70,118) (47.0) Net income 759,563 17.7 516,822 14.3 242,741 47.0 Total other comprehensive loss, net of tax (11,698) (0.3) (14,080) (0.4) 2,382 16.9 Comprehensive income $ 747,865 17.4 % $ 502,742 13.9 % $ 245,123 48.8 % Net income per share Basic $ 4.89 $ 3.25 $ 1.64 50.6 % Diluted $ 4.86 $ 3.23 $ 1.63 50.5 % Net Sales.
If there are unexpected material impacts on our business in future periods and we need to raise or conserve additional cash to fund our operations or pursue our business strategy, we may seek to borrow under our revolving credit facilities, seek new or modified borrowing arrangements, or sell additional debt or equity securities.
If there are unexpected material impacts on our business in future periods, we may need to raise additional cash to fund our operations or pursue our business strategy, in which case we may seek to borrow under our revolving credit facilities, seek new or modified borrowing arrangements, or sell additional debt or equity securities.
Income tax expense and our effective income tax rate were as follows: Years Ended March 31, 2024 2023 Income tax expense $ 219,378 $ 149,260 Effective income tax rate 22.4 % 22.4 % Our effective income tax rate was flat compared to the prior period.
Income tax expense and our effective income tax rate were as follows: Years Ended March 31, 2024 2023 Income tax expense $ 219,378 $ 149,260 Effective income tax rate 22.4 % 22.4 % Our effective income tax rate was flat compared to the year ended March 31, 2023.
Refer to Note 5, “Income Taxes,” of our consolidated financial statements in Part IV within this Annual Report for further information on our income taxes and tax strategy.
Refer to Note 5, “Income Taxes,” of our consolidated financial statements in Part IV within this Annual Report for further information on our income taxes and tax strategy. 48 Table of Contents
We believe our cash and cash equivalents balances, cash provided by operating activities, and available borrowing capacity under our revolving credit facilities, will provide sufficient liquidity to enable us to meet our working capital requirements and contractual obligations for at least the next 12 months and will be sufficient to meet the requirements of our business strategies and plans.
We believe our cash and cash equivalents balances, cash provided by operating activities, and available borrowing capacity under our revolving credit facilities, will provide 43 Table of Contents sufficient liquidity to enable us to meet our working capital requirements and contractual obligations for at least the next 12 months and will be sufficient to allow us to pursue our business strategies and plans.
(2) Our purchase obligations for product consist mostly of open purchase orders that we expect to fulfill in the ordinary course of business. Outstanding purchase orders are primarily issued to our independent manufacturers and are expected to be paid in less than a year.
(2) Our purchase obligations for product consist mostly of open purchase orders that we expect to fulfill in the ordinary course of business. Outstanding purchase orders are primarily issued to our independent manufacturers and are typically expected to be paid in less than one fiscal year.
Expanded marketing and strategic marketplace presence have fueled both domestic and international sales growth of the HOKA brand, which has quickly become a leading brand within run and outdoor specialty wholesale accounts and is growing across its ecosystem of access points.
Expanded marketing and strategic marketplace presence have fueled both domestic and international sales growth of the HOKA brand, which has quickly become a leading brand within run and outdoor specialty wholesale accounts and is growing across its global marketplace.
We finance our working capital and operating requirements using a combination of cash and cash equivalents balances, including cash from our repatriation strategy, cash provided from ongoing operating activities and, to a lesser extent, available borrowing capacity under our revolving credit facilities. Refer to the “Cash Flows” section below for further discussion on cash flows from ongoing operating activities.
We finance our working capital and operating requirements using a combination of cash and cash equivalents balances, including cash from our repatriation strategy, and cash provided from ongoing operating activities. We also have available borrowing capacity under our revolving credit facilities. Refer to the section titled “Cash Flows” below for further discussion on cash flows from ongoing operating activities.
(3) Our purchase obligations for commodities include sheepskin, UGGplush, and sugarcane-derived EVA, and represent remaining commitments under existing supply agreements, which are subject to minimum volume commitments (collectively, commodity contracts). We expect purchases under commodity contracts in the ordinary course of business will eventually exceed the minimum commitment levels.
(3) Our purchase obligations for commodities represent remaining commitments under existing supply agreements, which are subject to minimum volume commitments (collectively, commodity contracts). We typically enter into commodity contracts for sheepskin and sugarcane-derived EVA. We expect purchases under commodity contracts in the ordinary course of business will eventually exceed the minimum commitment levels.
A small portion of our unremitted accumulated earnings of non-US subsidiaries, for which no US federal or state income tax have been provided, are currently expected to be reinvested outside of the US indefinitely. Such earnings would become taxable upon the sale or liquidation of these subsidiaries.
A small portion of our unremitted accumulated earnings of non-US subsidiaries, for which no US federal or state income tax have been paid, are currently expected to be reinvested outside of the US indefinitely. Such earnings would become taxable upon the sale or liquidation of these subsidiaries. Revolving Credit Facilities.
With loyal consumers around the world, the UGG brand has proven to be a highly resilient line of premium footwear, apparel, and accessories with expanded product offerings that appeal to a growing global audience and a broad demographic.
With loyal consumers around the world, the UGG brand has proven to be a highly resilient consumer-focused line of premium footwear, apparel, and accessories with year-round product offerings that appeal to a growing global audience and a broad demographic.
The increase in net cash used in financing activities during the year ended March 31, 2024, compared to the prior period, was primarily due to a higher dollar value of stock repurchases. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Preparation of our consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the amounts reported.
The increase in net cash used in financing activities during the year ended March 31, 2025, compared to the prior period, was primarily due to a higher dollar value of stock repurchases, inclusive of excise taxes. 46 Table of Contents CRITICAL ACCOUNTING POLICIES AND ESTIMATES Preparation of our consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the amounts reported.
As of March 31, 2024, the timing of future cash outflows is highly uncertain related to expirations of statute of limitations of $19,885 and, since we are unable to make a reasonable estimate of the period of cash settlement, it is excluded from the table above.
As of March 31, 2025, the timing of future cash outflows is highly uncertain related to expirations of statute of limitations of $15,288 and, since we are unable to make a reasonable estimate of the period of cash settlement, it is excluded from the table above.
For our DTC channel and reportable operating segment, we estimate sales returns using a lag compared to the same prior period and consider historical returns experience and any recent events that could result in a change from historical returns, among other factors. Inventories.
For our DTC channel, we estimate sales returns using a lag compared to the same prior period and consider historical returns experience and any recent events that could result in a change from historical returns, among other factors. Allowance for Chargebacks .
We believe demand for HOKA brand products will continue to be driven by the following: • Leading performance product innovation, category extensions, and key franchise management, including higher frequency product drop rates and improving accessibility to all athletes. • Increased global brand awareness and new consumer adoption through enhanced global marketing activations and online consumer acquisition, including building a more diverse outdoor community through digital and in-person event sponsorship. • Thoughtful and strategic wholesale distribution choices, allowing the HOKA brand access and introduction to a broader, more diverse, consumer base. • Category extensions in authentic performance footwear offerings such as lifestyle, trail, and hiking categories.
The HOKA brand’s product line includes running, trail, hiking, fitness, and lifestyle footwear offerings, as well as select apparel and accessories. 34 Table of Contents We believe demand for HOKA brand products will continue to be driven by the following: • Leading performance product innovation, category extensions, and key franchise management, including higher frequency product drop rates and improving accessibility to all athletes. • Increased global brand awareness and new consumer adoption through enhanced global marketing activations and online consumer acquisition, including building a more diverse outdoor community through digital and in-person event sponsorship. • Thoughtful and strategic distribution choices, allowing the HOKA brand access and introduction to a broader, more diverse, consumer base. • Category extensions in authentic performance footwear offerings such as lifestyle, trail, and fitness categories.
Total Other Income, Net. The increase in total other income, net, compared to the prior period, was due to higher interest income from higher invested cash balances and average interest rates. Income Tax Expense.
Total Other Income, Net. The increase in total other income, net, compared to the prior period, was primarily due to higher interest income from higher invested cash balances. Income Tax Expense.
Capital Expenditures. We estimate capital expenditures that will be made before the end of our next fiscal year will range from approximately $115,000 to $125,000.
Capital Expenditures. We estimate capital expenditures that will be made before the end of our next fiscal year will range from approximately $120,000 to $130,000.
Our primary source of liquidity is net cash provided by operating activities, which is driven by our net income after non-cash adjustments and changes in working capital.
Our primary source of liquidity is net cash provided by operating activities, which is driven by our net income after non-cash adjustments and changes in operating assets and liabilities.
As of March 31, 2024, and 2023, we have $263,820 and $299,114, respectively, of cash and cash equivalents held by foreign subsidiaries, a portion of which may be subject to additional foreign withholding taxes if it were to be repatriated.
As of March 31, 2025, and 2024, we have $481,836 and $263,820, respectively, of cash and cash equivalents held by foreign subsidiaries, a portion of which may be subject to additional foreign withholding taxes if it were to be repatriated.
Gross margin increased to 55.6% from 50.3%, compared to the prior period, primarily due to favorable full-price selling for the UGG brand, favorable changes in freight costs, favorable HOKA brand mix and UGG brand product mix shifts, including benefits from selective price increases, and favorable mix of sales into the DTC channel. Selling, General, and Administrative Expenses.
Gross margin increased to 55.6% from 50.3%, compared to the year ended March 31, 2023, primarily due to favorable full-price selling for the UGG brand, favorable changes in freight costs, favorable HOKA brand mix and UGG brand product mix shifts, including benefits from selective price increases, and favorable mix of sales in the DTC channel. Selling, General, and Administrative Expenses.
LIQUIDITY Our liquidity may be impacted by a number of factors, including our results of operations, the strength of our brands and market acceptance of our products, impacts of seasonality and weather conditions, our ability to respond to changes in consumer preferences and tastes, the timing of capital expenditures and lease payments, our ability to collect our trade accounts receivables in a timely manner and effectively manage our inventories, our ability to manage supply chain constraints, our ability to respond to macroeconomic, political and legislative developments, and various other risks and uncertainties described in Part I, Item 1A, “Risk Factors,” within this Annual Report.
LIQUIDITY Our liquidity may be impacted by a number of factors, including our results of operations, the strength of our brands and market acceptance of our products, impacts of seasonality and weather conditions, our ability to respond to changes in consumer preferences and tastes, the timing of capital expenditures and lease payments, our ability to collect our trade accounts receivable in a timely manner and effectively manage our inventories, our ability to manage supply chain constraints, our ability to respond to macroeconomic, geopolitical and international trade developments, and various other risks and uncertainties described in the section titled “Trends and Uncertainties Impacting our Business and Industry” above and in Part I, Item 1A, “Risk Factors,” within this Annual Report.
As of March 31, 2024, the aggregate remaining approved amount under our stock repurchase program is $941,704. Our stock repurchase program does not obligate us to acquire any amount of common stock and may be suspended at any time at our discretion.
As of March 31, 2025, the aggregate remaining approved amount under our stock repurchase program is $374,701. Our stock repurchase program does not obligate us to acquire any amount of common stock and may be suspended at any time at our discretion.
The prior year rate was primarily driven by the impact on the foreign rate differential of nonrecurring income tax benefits related to foreign tax-exempt income, offset by an increase in income tax expense for lower unrealized tax benefits related to foreign tax authority assessments.
The rate for the year ended March 31, 2023, was primarily driven by the impact on the foreign rate differential of nonrecurring income tax benefits related to foreign tax-exempt income, offset by an increase in income tax expense for lower unrealized tax benefits related to foreign tax authority assessments. Net Income.
Net income per share increased, compared to the prior period, due to higher net income and lower weighted-average common shares outstanding driven by stock repurchases. Total Other Comprehensive Loss, Net of Tax.
Net Income. The increase in net income, compared to the prior period, was due to higher net sales and higher operating margins. Net income per share increased, compared to the prior period, due to higher net income and lower weighted-average common shares outstanding driven by stock repurchases. Total Other Comprehensive Income (Loss), Net of Tax.
We seek to differentiate our brands and products by offering diverse lines that emphasize fashion, authenticity, functionality, quality, and comfort, and products tailored to a variety of activities, seasons, and demographic groups. Independent third-party contractors manufacture all of our products.
We seek to differentiate our brands and products by offering diverse lines that emphasize fashion, authenticity, functionality, quality, and comfort, and products tailored to a variety of activities, seasons, and demographic groups.
The decrease in total other comprehensive loss, net of tax, compared to the prior period, was primarily due to lower foreign currency translation losses relating to changes in the net asset position against European foreign currency exchange rates.
The decrease in total other comprehensive loss, net of tax, compared to the year ended March 31, 2023, was primarily due to lower foreign currency translation losses relating to changes in the net asset position against European foreign currency exchange rates.
This amount reflects remaining minimum commitments we expect will be consumed in future periods in the ordinary course of business, and any remaining deposits are expected to become fully refundable or to be reflected as a credit against purchases.
The reported amount generally reflects remaining minimum commitments we expect will be consumed in future periods in the ordinary course of business, and any remaining deposits expected to become fully refundable or to be reflected as a credit against future purchases which are recorded in other assets in the consolidated balance sheets.
In the event that we determine all, or part of our net deferred tax assets are not realizable in the future, we will record an adjustment to the valuation allowance and a corresponding charge to earnings in the period such determination is made.
If we determine all, or part of our net deferred tax assets are not realizable in the future, we will record an adjustment to the valuation allowance and a corresponding charge to earnings in the period such determination is made. We make estimates to determine income tax expense, deferred tax assets and liabilities, and uncertain tax positions.
Cash and cash equivalents. As of March 31, 2024, our cash and cash equivalents are $1,502,051, the majority of which is held in highly rated money market funds and interest-bearing bank deposit accounts with established national financial institutions.
Cash and Cash Equivalents. As of March 31, 2025, our cash and cash equivalents balance is $1,889,188, the majority of which is held in highly rated money market funds and interest-bearing bank deposit accounts with established national and global financial institutions.
Our efforts to drive brand adoption is focused on building brand acceptance and heat through continued launches of innovative product offerings, coupled with marketing investments across multiple geographic markets and channels of distribution. • We remain focused on our marketplace inventory management strategy for our brands through segmentation and differentiation.
Our efforts to drive brand adoption are focused on building brand acceptance and heat through launches of innovative product offerings, coupled with marketing investments across multiple geographic markets and channels of distribution, including strategic expansion of the global marketplace. • We continue to implement a marketplace inventory management strategy for our brands through segmentation and differentiation.
Furthermore, we may require additional cash resources due to changes in business conditions, strategic initiatives, or stock repurchase strategy, a national or global economic recession, or other future developments, including any investments or acquisitions we may decide to pursue, although we do not have any present commitments with respect to any such investments or acquisitions.
Furthermore, we may require additional cash resources due to changes in business conditions, strategic initiatives, or capital allocation strategy, a national or global economic recession, or other future developments, including any investments or acquisitions we may decide to pursue.
The increase in net cash provided by operating activities during the year ended March 31, 2024, compared to the prior period, was due to $273,654 of favorable net income after non-cash adjustments and $222,108 of favorable changes in operating assets and liabilities.
The increase in net cash provided by operating activities during the year ended March 31, 2025, compared to the prior period, was due to $217,349 of favorable net income after non-cash adjustments, partially offset by $206,010 of unfavorable changes in operating assets and liabilities.
Information reported to the Chief Operating Decision Maker (CODM), who is our CEO, President, and Principal Executive Officer (PEO), is organized into these reportable operating segments and is consistent with how the CODM evaluates our performance and allocates resources. UGG Brand.
Information reported to the CODM, who is our Principal Executive Officer (PEO), is organized into these reportable operating segments and is consistent with how the CODM evaluates our performance and allocates resources. 33 Table of Contents Change in Reportable Operating Segments.
The sale of convertible debt or equity securities could result in additional dilution to our stockholders, and equity securities may have rights or preferences that are superior to those of our existing stockholders.
The sale of convertible debt or equity securities could result in additional dilution to our stockholders, and equity securities may have rights or preferences that are superior to those of our existing stockholders. The incurrence of additional indebtedness would result in additional debt service obligations, as well as covenants that would restrict our operations and further encumber our assets.
Drivers of significant net changes in total income from operations, compared to the prior period, were as follows: • The increase in income from operations of the DTC channel was due to higher net sales for the UGG and HOKA brands at higher gross margins, as well as lower SG&A expenses as a percentage of net sales. • The increase in income from operations of HOKA brand wholesale was due to higher net sales at higher gross margins, slightly offset by higher SG&A expenses as a percentage of net sales. • The increase in income from operations of UGG brand wholesale was due to higher net sales at higher gross margins, partially offset by higher SG&A expenses as a percentage of net sales. • The decrease in income from operations of Teva brand wholesale was due to lower net sales at lower gross margins, as well as higher SG&A expenses as a percentage of net sales. 41 Table of Contents • The decrease in income from operations of Sanuk brand wholesale was due to lower net sales at lower gross margins, as well as higher SG&A expenses as a percentage of net sales, primarily due to the Sanuk brand definite-lived intangible asset impairment. • The increase in unallocated overhead costs was due to higher payroll costs related to higher headcount and performance-based compensation, as well as higher IT programming and software costs, depreciation, legal, rent and occupancy, and warehouse expenses.
Drivers of significant net changes in total income from operations, compared to the year ended March 31, 2023, were as follows: • The increase in income from operations of the UGG brand was due to higher net sales at higher gross margins, partially offset by slightly higher SG&A expenses as a percentage of net sales. • The increase in income from operations of the HOKA brand was due to higher net sales at higher gross margins, partially offset by higher SG&A expenses as a percentage of net sales. • The decrease in income from operations of the Other brands was primarily due to lower net sales at higher gross margins, as well as higher SG&A expenses as a percentage of net sales, primarily due to the Sanuk brand definite-lived intangible asset impairment. • The increase in unallocated enterprise and shared brand expenses was primarily due to higher payroll and related costs for higher headcount for enterprise functions along with higher variable payroll costs to support higher sales, including performance-based compensation; higher other SG&A expenses for IT programming and software costs, 3PL service fees, legal fees, contract services, and travel costs; higher depreciation and other related costs for infrastructure investments; and higher rent and occupancy for enterprise offices. 42 Table of Contents Total Other Income, Net.
During fiscal year 2024, we experienced alignment on product assortments that resulted in higher full-price sell through. This, combined with selective price increases, has benefited our gross margins during fiscal year 2024 across all channels of distribution.
During fiscal year 2025, we continued to experience alignment on product assortments that resulted in higher full-price sell-through, which benefited our gross margins across all channels of distribution.
We anticipate these expenditures will primarily relate to the upgrades to our existing warehouse and DCs, opening HOKA brand retail stores and refreshing our retail store fleet, IT infrastructure and system improvements, and upgrades to our existing office facilities.
We anticipate these expenditures will primarily relate to expanding our HOKA brand retail store fleet, refreshes to our existing retail store fleet, IT infrastructure and system improvements, as well as upgrading our existing warehouses and DCs, and office facilities.
Management bases these estimates and assumptions upon historical experience, existing and known circumstances, authoritative accounting pronouncements, and other factors that we believe to be reasonable, but actual results could differ materially from these estimates.
Management bases these estimates and assumptions upon historical experience, existing and known circumstances, authoritative accounting pronouncements, and other factors that it believes to be reasonable.
While gross margins continue to be an area of strategic focus, we expect a more normalized promotional environment for our results of operations during our next fiscal year ending March 31, 2025 (next fiscal year). • Our long-term strategy remains focused on building our DTC channel to represent an increased portion of our total net sales, which includes differentiating the consumer experience from the wholesale channel to drive increases in acquisition and retention to sustain strong market positions and a high level of demand for our brands.
While gross margins continue to be an area of strategic focus, we may not experience these benefits to our gross margins in our fiscal year ending March 31, 2026 (next fiscal year) due to various factors, including impacts from macroeconomic and geopolitical factors, discussed above, as well as potential impacts from our pricing strategies. • Our long-term strategy remains focused on building our DTC channel to represent an increased proportion of our total net sales, which includes differentiating the consumer experience from the wholesale channel to drive increases in acquisition and retention to sustain strong market positions and a high level of demand for our brands.
We have a five-year unsecured revolving credit facility, which provides for borrowings up to $400,000, of which $399,046 remains available and contains a $25,000 sublimit for the issuance of letters of credit, of which $954 is outstanding (Primary Credit Facility). • China Credit Facility.
Information about our revolving credit facilities available as of March 31, 2025, is as follows: • Primary Credit Facility. We have a five-year unsecured revolving credit facility, which provides for borrowings up to $400,000 (Primary Credit Facility) and contains a $25,000 sublimit for the issuance of letters of credit.
Although we believe we have adequate sources of liquidity over the long term, factors such as changes in consumer preferences or tastes, prolonged or severe economic recession or inflationary pressure could adversely affect our business and liquidity. Sources of Liquidity.
In addition, there can be no assurance that any additional financing will be available on acceptable terms, if at all. Although we believe we have adequate sources of liquidity over the long term, factors such as changes in consumer preferences or tastes, prolonged or severe economic recession or inflationary pressure could adversely affect our business and liquidity. Sources of Liquidity.
We have expanded our HOKA brand presence within our DTC channel through targeted investments in certain regions that provide influential market presence to drive brand awareness, and we expect to continue making these investments, including in our next fiscal year.
We continue to selectively expand our HOKA brand presence through additional locations with our wholesale partners and targeted retail store expansion within our DTC channel. We also continue to invest in certain regions that provide influential market presence to build HOKA brand awareness, and we expect to continue making these investments, including in our next fiscal year.
(5) Net unrecognized tax benefits are gross unrecognized tax benefits, less federal benefit for state income taxes, related to uncertain tax positions taken in our income tax return that would impact our effective tax rate, if recognized.
These amounts exclude capital expenditures expected to be made in the next fiscal year, which are further discussed below. (5) Net unrecognized tax benefits are gross unrecognized tax benefits, less federal benefit for state income taxes, related to uncertain tax positions taken in our income tax return that would impact our effective tax rate, if recognized.
We expect increased sales in the DTC channel will continue to positively impact our gross margins. • We continue to implement our international growth strategies for the HOKA and UGG brands.
We expect increased sales in the DTC channel will continue to positively impact our gross margins.
On a constant currency basis, net sales increased by 17.9%, compared to the prior period. Further, we experienced an increase of 2.8% in the total volume of units sold to 65,300 from 63,500, compared to the prior period.
Supplemental Disclosure • On a constant currency basis, net sales increased by 17.9%, compared to the year ended March 31, 2023. • Comparable DTC channel net sales for the 52 weeks ended March 31, 2024, increased by 25.4% compared to the year ended March 31, 2023. • We experienced an increase of 2.8% in the total volume of units sold to 65,300 from 63,500, compared to the year ended March 31, 2023.
Given the historical seasonality of our business, our working capital requirements fluctuate significantly throughout our fiscal year, and we utilize available cash to build inventory levels during certain quarters in our fiscal year to support higher selling seasons.
Our working capital requirements begin when we purchase raw and other materials and inventories and continue until we ultimately collect the resulting trade accounts receivable. Given the historical seasonality of the UGG brand, our working capital requirements fluctuate significantly throughout our fiscal year, and we utilize available cash to build inventory levels during certain quarters to support higher selling seasons.
We have an uncommitted revolving line of credit of up to CNY300,000, or $41,522, with an overdraft facility sublimit of CNY100,000, or $13,841 (China Credit Facility). As of March 31, 2024, there is no outstanding balance, available borrowings are $41,494, and outstanding bank guarantees are $28 under the China Credit Facility. • Debt Covenants.
Under the Primary Credit Facility, there is no outstanding balance, $399,045 of available borrowings, and $955 of outstanding letters of credit. • China Credit Facility. We have an uncommitted revolving line of credit of up to CNY300,000, or $41,338, with an overdraft facility sublimit of CNY100,000, or $13,779 (China Credit Facility).
This discussion includes an analysis of our financial condition and results of operations for the years ended March 31, 2024, and 2023 and year-over-year comparisons between those periods.
This discussion includes an analysis of our financial condition and results of operations for the years ended March 31, 2025, 2024, and 2023 and year-over-year comparisons between those periods. Certain statements made in this section constitute “forward-looking statements,” which are subject to numerous risks and uncertainties.
We believe our products are distinctive and appeal to a broad demographic. We sell our products through quality domestic and international retailers, international distributors, and directly to our global consumers through our DTC business, which is comprised of our Company-owned e-commerce websites and retail stores.
Our brands compete across the fashion and casual lifestyle, performance, running, and outdoor markets. We believe our products are distinctive and appeal to a broad demographic. Our brands sell our products through quality domestic and international retailers, international distributors, and directly to global consumers through our DTC channel, which is comprised of an e‑commerce and retail store presence.
Refer to Note 10, “Stockholders’ Equity,” of our consolidated financial statements in Part IV within this Annual Report for further information regarding our stock repurchase program and capital allocation strategy.
On May 21, 2025, our Board approved an additional authorization of $2,250,000 to repurchase shares of our common stock under the same conditions as the prior stock repurchase program. Refer to Note 10, “Stockholders’ Equity,” of our consolidated financial statements in Part IV within this Annual Report for further information regarding our stock repurchase program and capital allocation strategy.
Although the full impact of these factors is unknown, management believes it has made appropriate accounting estimates and assumptions based on the facts and circumstances available as of the reporting date.
Although the full impact of these factors is unknown, management believes it has made appropriate accounting estimates and assumptions based on the facts and circumstances available as of the reporting date. However, actual results could differ materially from these estimates and assumptions, which may result in material effects on our financial condition, results of operations and liquidity.
Net sales by location, and by brand and channel were as follows: Years Ended March 31, 2024 2023 Change Amount Amount Amount % Net sales by location Domestic $ 2,863,674 $ 2,451,497 $ 412,177 16.8 % International 1,424,089 1,175,789 248,300 21.1 Total $ 4,287,763 $ 3,627,286 $ 660,477 18.2 % Net sales by brand and channel UGG brand Wholesale $ 1,115,241 $ 1,004,356 $ 110,885 11.0 % Direct-to-Consumer 1,123,891 924,855 199,036 21.5 Total 2,239,132 1,929,211 309,921 16.1 HOKA brand Wholesale 1,126,126 925,877 200,249 21.6 Direct-to-Consumer 680,614 487,039 193,575 39.7 Total 1,806,740 1,412,916 393,824 27.9 Teva brand Wholesale 113,739 149,111 (35,372) (23.7) Direct-to-Consumer 34,780 33,950 830 2.4 Total 148,519 183,061 (34,542) (18.9) 39 Table of Contents Years Ended March 31, 2024 2023 Change Amount Amount Amount % Sanuk brand Wholesale 17,175 27,678 (10,503) (37.9) Direct-to-Consumer 8,274 10,288 (2,014) (19.6) Total 25,449 37,966 (12,517) (33.0) Other brands Wholesale 60,026 53,653 6,373 11.9 Direct-to-Consumer 7,897 10,479 (2,582) (24.6) Total 67,923 64,132 3,791 5.9 Total $ 4,287,763 $ 3,627,286 $ 660,477 18.2 % Total Wholesale $ 2,432,307 $ 2,160,675 $ 271,632 12.6 % Total Direct-to-Consumer 1,855,456 1,466,611 388,845 26.5 Total $ 4,287,763 $ 3,627,286 $ 660,477 18.2 % Total net sales increased primarily due to higher DTC and wholesale channel sales for the HOKA and UGG brands, partially offset by lower Teva brand and Sanuk brand wholesale channel sales.
Net sales by brand, channel, and geography were as follows: Years Ended March 31, 2024 2023 Change Amount Amount Amount % Net sales by brand UGG brand Wholesale $ 1,115,241 $ 1,004,356 $ 110,885 11.0 % Direct-to-Consumer 1,123,891 924,855 199,036 21.5 Total 2,239,132 1,929,211 309,921 16.1 HOKA brand Wholesale 1,126,126 925,877 200,249 21.6 Direct-to-Consumer 680,614 487,039 193,575 39.7 Total 1,806,740 1,412,916 393,824 27.9 Other brands (1) Wholesale 190,940 230,442 (39,502) (17.1) Direct-to-Consumer 50,951 54,717 (3,766) (6.9) Total $ 241,891 285,159 (43,268) (15.2) Total (1) $ 4,287,763 $ 3,627,286 $ 660,477 18.2 % Net sales by channel Total Wholesale $ 2,432,307 $ 2,160,675 $ 271,632 12.6 % Total Direct-to-Consumer 1,855,456 1,466,611 388,845 26.5 Total (1) $ 4,287,763 $ 3,627,286 $ 660,477 18.2 % Net sales by geography Domestic $ 2,863,674 $ 2,451,497 $ 412,177 16.8 % International 1,424,089 1,175,789 248,300 21.1 Total (1) $ 4,287,763 $ 3,627,286 $ 660,477 18.2 % 40 Table of Contents (1) Includes Teva and Sanuk brand’s full financial results for the years ended March 31, 2024, and 2023, which are presented in the Other brands reportable operating segment.
During the year ended March 31, 2024, we repatriated $250,000 of cash and cash equivalents, compared to no cash and cash equivalents repatriated during the year ended March 31, 2023.
During the year ended March 31, 2025, no cash and cash equivalents were repatriated from a foreign subsidiary that were subject to income taxes, compared to $250,000 of cash and cash equivalents repatriated during the year ended March 31, 2024.
Therefore, we record an allowance primarily for known circumstances as well as unknown circumstances based on historical trends related to the timing and amount of chargebacks taken against customer invoices.
We record an allowance based primarily on known circumstances as well as unknown circumstances based on historical trends related to the timing and amount of chargebacks taken against customer invoices. The determination of these sales liabilities and allowances is considered a critical accounting estimate because significant judgment is required to estimate adjustments to historical return rates and trends.
Represent UGG and HOKA mono-branded stores which are wholly owned and operated by third parties and not included in the total count of our global Company-owned retail stores. 37 Table of Contents USE OF NON-GAAP FINANCIAL MEASURES We disclose financial measures calculated and presented in accordance with generally accepted accounting principles in the United States (US GAAP); however, throughout this Annual Report we provide certain financial information on a non-GAAP basis (non-GAAP financial measures).
USE OF NON-GAAP FINANCIAL MEASURES We disclose supplemental financial measures calculated and presented in accordance with generally accepted accounting principles in the United States (US GAAP); however, throughout this Annual Report we provide certain financial information on a non-GAAP basis (non-GAAP financial measures).
However, actual results could differ materially from these estimates and assumptions, which may result in material effects on our financial condition, results of operations and liquidity. 45 Table of Contents Refer to Note 1, “General,” of our consolidated financial statements in Part IV within this Annual Report for a discussion of our significant accounting policies and use of estimates, as well as the impact of recent accounting pronouncements.
Refer to Note 1, “General,” of our consolidated financial statements in Part IV within this Annual Report for further discussion of our significant accounting policies and use of estimates, as well as the impact of recent accounting pronouncements. Sales Returns and Chargebacks.
The UGG brand is one of the most iconic and recognized footwear brands in our industry, which highlights our successful track record of building niche brands into lifestyle and fashion market leaders.
Refer to Note 12, “Reportable Operating Segments,” of our consolidated financial statements in Part IV within this Annual Report for further information on reportable operating segments. UGG Brand. The UGG brand is one of the most iconic and recognized footwear brands in our industry, which highlights our successful track record of building niche brands into lifestyle and fashion market leaders.
As of March 31, 2024, we are in compliance with all financial covenants under our Primary Credit Facility and China Credit Facility. Refer to Note 6, “Revolving Credit Facilities,” of our consolidated financial statements in Part IV within this Annual Report for further information on terms of our revolving credit facilities. Material Cash Requirements .
Refer to Note 6, “Revolving Credit Facilities,” of our consolidated financial statements in Part IV within this Annual Report for further information on the terms of our revolving credit facilities. Material Cash Requirements . Our material cash requirements include working capital, payments to fulfill contractual obligations, capital expenditures, and stock repurchases.
In addition to the above operating lease commitments outstanding and excluded from operating lease liabilities recorded in our consolidated financial statements as of March 31, 2024, there is an aggregate of $12,696 of undiscounted minimum lease payments due pursuant to leases signed but not yet commenced, primarily for the expansion of an existing office that we expect will open in the fourth quarter of our next fiscal year.
In addition to the above operating lease obligations recorded on a discounted basis in our consolidated financial statements as of March 31, 2025, there is an aggregate of $10,096 of undiscounted minimum lease payments due pursuant to leases signed, but not yet commenced, primarily for new HOKA brand retail stores and a regional office, for which the leases are expected to commence in the first quarter of our next fiscal year.
CASH FLOWS The following table summarizes the major components of our consolidated statements of cash flows for the periods presented: Years Ended March 31, 2024 2023 Change Amount Amount Amount % Net cash provided by operating activities $ 1,033,184 $ 537,422 $ 495,762 92.2 % Net cash used in investing activities (89,331) (81,013) (8,318) (10.3) Net cash used in financing activities (417,675) (309,031) (108,644) (35.2) Effect of foreign currency exchange rates on cash and cash equivalents (5,922) (9,110) 3,188 35.0 Net change in cash and cash equivalents $ 520,256 $ 138,268 $ 381,988 276.3 % Operating Activities.
CASH FLOWS The following table summarizes the major components of our consolidated statements of cash flows for the periods presented: Years Ended March 31, 2025 2024 Change Amount Amount Amount % Net cash provided by operating activities $ 1,044,523 $ 1,033,184 $ 11,339 1.1 % Net cash used in investing activities (75,003) (89,331) 14,328 16.0 Net cash used in financing activities (581,334) (417,675) (163,659) (39.2) Effect of foreign currency exchange rates on cash and cash equivalents (1,049) (5,922) 4,873 82.3 Net change in cash and cash equivalents $ 387,137 $ 520,256 $ (133,119) (25.6) % Operating Activities.
We provide an allowance against trade accounts receivable for estimated losses that may result from customers’ inability to pay. We determine the amount of the allowance by analyzing known uncollectible accounts, aged trade accounts receivable, economic conditions and forecasts, historical experience, and the customers’ creditworthiness.
We determine the amount of the allowance by analyzing known uncollectible accounts, aged trade accounts receivable, economic conditions and forecasts, historical experience, and the customers’ creditworthiness. Changes in the characteristics of our trade accounts receivable and the aforementioned factors, among others, are reviewed quarterly and may lead to adjustments in our allowance for doubtful accounts.
For the years ended March 31, 2024, and 2023, we did not generate significant pre-tax earnings from any countries which do not impose a corporate income tax.
Refer to Note 5, “Income Taxes,” of our consolidated financial statements in Part IV within this Annual Report for further information regarding our cash repatriation strategy. For the years ended March 31, 2025, 2024, and 2023, we did not generate significant pre-tax earnings from any countries which do not impose a corporate income tax.
These effects were partially offset by lower net sales in Europe, primarily due to the timing of certain distributor shipments. • Wholesale net sales of the UGG brand increased globally resulting from strong brand heat and strong adoption of key product franchises driving a higher level of full-price selling and benefits from selective price increases on popular styles. • Wholesale net sales of the Teva brand decreased globally primarily by lower demand in the value-oriented consumer channel for the sandal category, partially related to macroeconomic factors, as well as shipping timing differences, compared to the prior period. • Wholesale net sales of the Sanuk brand decreased domestically driven primarily by lower consumer demand, partially related to macroeconomic factors, and elevated marketplace inventory levels. • International net sales, which are included in the reportable operating segment net sales presented above, increased by 21.1% and represented 33.2% and 32.4% of total net sales for the years ended March 31, 2024, and 2023, respectively.
HOKA brand DTC channel growth was driven primarily by global gains in consumer acquisition and retention online. • Net sales of the UGG brand increased due to strong global adoption of key product franchises, as well as benefits from a higher level of full price selling and selective price increases on popular styles, across all channels. • Net sales of the Other brands decreased primarily due to lower demand in the wholesale channel globally for the Teva brand related to pressures on the value-oriented consumer in the sandal category and shipping timing differences, as well as in the US for the Sanuk brand due to lower consumer demand and elevated marketplace inventory levels.
We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.
Our estimates related to tax benefits from uncertain tax positions consider whether a tax position is more likely than not to be sustained on examination by the taxing authorities, based on the technical merits of the position and the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.
Additions to the allowance are recorded against gross sales or SG&A expenses in the consolidated statements of comprehensive income. 46 Table of Contents Refer to Note 2, “Revenue Recognition,” of our consolidated financial statements in Part IV within this Annual Report for further information regarding the components of variable consideration, including allowances for doubtful accounts, sales discounts, and chargebacks.
Actual allowances may differ from estimates due to changes in customer, consumer, or product-specific circumstances. Refer to Note 2, “Revenue Recognition,” of our consolidated financial statements in Part IV within this Annual Report for further information regarding the sales return liability, allowances for chargebacks, and allowances for sales discounts.
The following table summarizes our significant contractual obligations as of March 31, 2024, in future periods: Payments Due by Period Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Operating lease obligations (1) $ 303,914 $ 59,556 $ 108,904 $ 71,318 $ 64,136 Purchase obligations for product (2) 868,282 868,282 — — — Purchase obligations for commodities (3) 119,332 56,384 62,948 — — Other purchase obligations (4) 222,412 106,163 106,248 10,001 — Net unrecognized tax benefits (5) 24,460 3,158 21,302 — — Total $ 1,538,400 $ 1,093,543 $ 299,402 $ 81,319 $ 64,136 (1) Our operating lease commitments consist primarily of building leases for our retail locations, warehouse and DCs, and regional offices, and include the undiscounted cash lease payments owed under the terms of the lease agreements.
The following table summarizes our significant contractual obligations as of March 31, 2025, in future periods: Payments Due by Period Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Operating lease obligations (1) $ 317,823 $ 62,445 $ 123,491 $ 71,557 $ 60,330 Purchase obligations for product (2) 956,911 956,911 — — — Purchase obligations for commodities (3) 231,323 7,412 223,911 — — Other purchase obligations (4) 200,744 118,336 70,274 12,134 — Net unrecognized tax benefits (5) 4,904 1,955 2,949 — — Total $ 1,711,705 $ 1,147,059 $ 420,625 $ 83,691 $ 60,330 (1) Our operating lease obligations consist primarily of building leases for our retail locations, warehouses and DCs, and regional offices, and include the undiscounted cash lease payments owed under the terms of the lease agreements.
Cost includes sourcing as well as inventory procurement costs, including freight, duty, and handling fees which are subsequently expensed to cost of sales. We review inventory on a regular basis for excess, obsolete, and impaired inventory to evaluate write-downs to the lower of cost or net realizable value.
Inventories, which are primarily comprised of finished goods on hand and in transit, are stated at the lower of cost (weighted moving average) or net realizable value at each financial statement date. We review inventory on a regular basis for excess, obsolete, and impaired inventory to evaluate write-downs to the lower of cost or net realizable value.
While these macroeconomic factors did not materially impact our business or results of operations during fiscal year 2024, the impact of these macroeconomic factors is difficult to quantify and could negatively impact our business and results of operations during our next fiscal year. 35 Table of Contents REPORTABLE OPERATING SEGMENT OVERVIEW Our six reportable operating segments include the worldwide wholesale operations of the UGG brand, HOKA brand, Teva brand, Sanuk brand, and Other brands, as well as DTC.
While these factors did not materially impact our business or results of operations during fiscal year 2025, the full impact of these factors is difficult to quantify and could negatively impact us in future periods.
Comparable DTC channel net sales for the 52 weeks ended March 31, 2024, increased by 25.4% compared to the prior period. • Wholesale net sales of the HOKA brand increased domestically and in Asia driven by higher consumer demand across an assortment of performance products.
Drivers of significant changes in net sales, compared to the year ended March 31, 2023, were as follows: • Net sales of the HOKA brand increased due to higher demand for an assortment of performance products across all channels.
(4) Our other purchase obligations consist of non-cancellable minimum commitments for 3PL provider arrangements, sales management services, supply chain services, IT services, promotional expenses, and other commitments under service contracts. These amounts exclude capital expenditures expected to be made in the next fiscal year, which are further discussed below.
There are no deposits included in the amount above that have not been fully consumed as of March 31, 2025. (4) Our other purchase obligations consist of non-cancellable minimum commitments for IT services, 3PL service fees and other supply chain services, promotional expenses, and other commitments under service contracts.
The increase in net cash used in investing activities during the year ended March 31, 2024, compared to the prior period, was primarily due to higher capital expenditures for refreshes of existing and new retail stores and leasehold improvements for our warehouses and DCs, partially offset by reductions in IT infrastructure and other technology costs. Financing Activities.
Investing Activities. The decrease in net cash used in investing activities during the year ended March 31, 2025, compared to the prior period, was primarily due to an increase in cash proceeds from the sale of assets. Financing Activities.
Drivers of significant changes in net sales, compared to the prior period, were as follows: • DTC net sales increased primarily due to higher global net sales for the UGG and HOKA brands, driven primarily by consumer acquisition and retention online as we experienced increased demand for both brands, as well as the UGG brand net sales benefiting from a higher level of full-price selling and selective price increases on popular styles.
Drivers of significant changes in net sales, compared to the prior period, were as follows: • Net sales of the HOKA brand increased due to higher global demand for an assortment of performance products across all channels. HOKA brand wholesale channel growth was driven primarily by global market share gains and benefits from new points of distribution with key partners.
Refer to Part I, Item 1A, “Risk Factors,” within this Annual Report for further discussion on executive officer leadership transition risks. 34 Table of Contents TRENDS AND UNCERTAINTIES IMPACTING OUR BUSINESS AND INDUSTRY We expect our business and industry will continue to be impacted by several important trends and uncertainties, including the following: Brand and Omni-Channel Strategy • We remain focused on increasing global consumer awareness and adoption of our brands, which has continued to positively impact our financial results.
Brand and Omni-Channel Strategy • We remain focused on increasing global consumer awareness and adoption of our brands, which has continued to positively impact our financial results.
The tax benefits recorded in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. We determine on a regular basis the amount of undistributed earnings that will be indefinitely reinvested in our non-US operations.
Resolution of these uncertainties may result in the recognition of a tax benefit or an additional tax charge in the period our assessment changes. We determine on a regular basis the amount of undistributed earnings that will be indefinitely reinvested in our non-US operations.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

13 edited+4 added−1 removed4 unchanged
Biggest changeRefer to the subsection titled “Contractual Obligations” under section “Liquidity” within Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 7, “Commitments and Contingencies,” of our consolidated financial statements in Part IV within this Annual Report for further information on our minimum purchase obligations for commodities. 49 Table of Contents FOREIGN CURRENCY EXCHANGE RATE RISK Although most of our sales and inventory purchases are denominated in US dollars, our global operations in the international markets where our products are sold and manufactured expose us to risk of foreign currency exchange rate fluctuations between the US dollar and primarily the currencies of Europe, Asia, Canada, and Latin America.
Biggest changeRefer to the subsection titled “Contractual Obligations” under the section “Liquidity” within Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 7, “Commitments and Contingencies,” of our consolidated financial statements in Part IV within this Annual Report for further information on our minimum purchase obligations for commodities.
As our international operations grow and we increase purchases and sales in foreign currencies, we will continue to evaluate our hedging strategy and may utilize additional derivative instruments to hedge our foreign currency exchange rate risk. We do not use foreign currency exchange rate forward contracts for trading purposes.
As our international operations grow and we increase purchases and sales in foreign currencies, we will continue to evaluate our hedging strategy and may utilize additional derivative instruments to hedge our foreign currency exchange rate risk. We do not use foreign currency exchange rate forward contracts for speculative trading purposes.
As there were no outstanding balances under our revolving credit facilities as of March 31, 2024, the hypothetical effect of a 100 basis point change in interest rates for borrowings made under our revolving credit facilities would have resulted in no change to interest expense recorded in our consolidated statements of comprehensive income during the year ended March 31, 2024.
As there were no outstanding balances under our revolving credit facilities as of March 31, 2025, the hypothetical effect of a 100 basis point change in interest rates for borrowings made under our revolving credit facilities would have resulted in no change to interest expense recorded in our consolidated statements of comprehensive income during the year ended March 31, 2025.
Refer to Note 6, “Revolving Credit Facilities,” of our consolidated financial statements in Part IV within this Annual Report for further information on our revolving credit facilities and types of interest rates.
Refer to Note 6, “Revolving Credit Facilities,” of our consolidated financial statements in Part IV within this Annual Report for further information on our revolving credit facilities.
As of March 31, 2024, there are no known factors that we would expect to result in a material change in the general nature of our foreign currency exchange rate risk exposure.
As of March 31, 2025, there are no known factors that we would expect to result in a material change in the near-term in the general nature of our primary foreign currency exchange rate risk exposure.
Using our average invested cash equivalents balance as of March 31, 2024, the hypothetical effect of a 100 basis point change in short-term interest rates would be impactful to the interest income recorded in our consolidated statements of comprehensive income, along with our operating cash flows, but would not impact the fair market value of the related underlying instruments.
Using our average invested cash equivalents balance as of March 31, 2025, the hypothetical effect of a 100 basis point change in short-term interest rates would result in a change of approximately $14,700 to interest income recorded in our consolidated statements of comprehensive income, along with our operating cash flows, but would not impact the fair market value of the related underlying instruments.
To manage price volatility and ensure availability for our commodities, we typically enter into fixed purchasing contracts with designated suppliers of sheepskin and sugarcane-derived EVA, as well as other pricing agreements for UGGplush. Our fixed pricing agreements are non-cancellable and may be subject to fees, including certain sheepskin purchasing contracts requiring deposits when minimum volumes are not fully consumed.
To manage price volatility and ensure availability for our commodities, we currently enter into fixed purchasing contracts with designated suppliers of sheepskin and, at times, sugarcane-derived EVA. Our fixed pricing agreements are non-cancellable and may be subject to fees, including certain sheepskin purchasing contracts requiring deposits when minimum volumes are not fully consumed.
However, the impact on interest income would not be material to our results of operations. Refer to Note 1, “General,” and Note 4, “Fair Value Measurements,” of our consolidated financial statements in Part IV within this Annual Report for further information on our cash and cash equivalents. Our revolving credit facilities bear interest at variable rates.
Refer to the section titled “Summary of Significant Accounting Policies” in Note 1, “General,” and Note 4, “Fair Value Measurements,” of our consolidated financial statements in Part IV within this Annual Report for further information on our cash and cash equivalents. Our revolving credit facilities bear interest at variable rates.
Foreign currency exchange rate fluctuations affect our results of operations and can make comparisons from year to year more difficult. Foreign currency exchange rate fluctuations had a net positive impact on our results of operations for the year ended March 31, 2024, when compared to the year ended March 31, 2023.
Foreign currency exchange rate fluctuations affect our results of operations and can make comparisons from year to year more difficult.
Refer to Note 1, “General,” and Note 9, “Derivative Instruments,” of our consolidated financial statements in Part IV within this Annual Report for further information on our use of derivative contracts and related accounting policies.
Refer to the section titled “Summary of Significant Accounting Policies” in Note 1, “General,” and Note 9, “Derivative Instruments,” of our consolidated financial statements in Part IV within this Annual Report for further information on our use of derivative contracts and related accounting policies. 49 Table of Contents INTEREST RATE RISK Our exposure to market risk for interest rates relates to our cash and cash equivalents, including cash invested in highly rated money market funds, and our revolving credit facilities.
COMMODITY PRICE RISK We are exposed to commodity price fluctuations from the cost of raw materials used in our manufacturing process that includes sheepskin, UGGplush, and sugarcane-derived EVA (collectively, commodities).
Refer to Part I, Item 1A, “Risk Factors,” within this Annual Report for further discussion of risks to our business and results of operations. COMMODITY PRICE RISK We are exposed to commodity price fluctuations associated with the cost of raw materials used in our manufacturing process, including sheepskin and sugarcane-derived EVA (collectively, commodities).
INTEREST RATE RISK Our exposure to market risk for interest rates relates to our cash and cash equivalents, including cash from highly rated money market funds, and our revolving credit facilities. Cash and cash equivalents held by us are affected by variable, short-term interest rates.
Cash and cash equivalents held by us are affected by variable, short-term interest rates.
We regularly assess these risks and have established policies and business practices designed to mitigate their effects. Refer to Part I, Item 1A, “Risk Factors,” within this Annual Report for further discussion of risks to our business and results of operations.
There have been no material changes in our primary risk exposures or management of market risks since the prior year. We regularly assess these risks and have established policies and business practices designed to mitigate their effects.
Removed
As there are no outstanding balances for our derivative instruments as of March 31, 2024, a hypothetical 10.0% change in foreign currency exchange rates would result in an immaterial aggregate change to our consolidated statements of comprehensive income during the year ended March 31, 2024.
Added
FOREIGN CURRENCY EXCHANGE RATE RISK Although most of our sales and inventory purchases are denominated in US dollars, our global operations in the international markets where our products are sold and manufactured expose us to risk of foreign currency exchange rate fluctuations between the US dollar and primarily the currencies of Europe, Asia, Canada, and Latin America.
Added
Foreign currency exchange rates, excluding the effect from derivative instruments, to remeasure monetary assets and liabilities using the exchange rate at the end of the reporting period, had a negative impact on our income from operations for the year ended March 31, 2025.
Added
We use forward foreign exchange contracts to hedge material exposure to adverse changes in foreign currency exchange rates. A sensitivity analysis technique has been used to evaluate the effect that changes in the market value of foreign exchange currencies will have on our forward foreign exchange contracts.
Added
As of March 31, 2025, a hypothetical 10% foreign currency exchange rate fluctuation would have caused the fair value of our financial instruments to change by approximately $34,000.