DECKERS OUTDOOR CORP (DECK)

CIK: 0000910521. SIC: 3021 Rubber & Plastics Footwear. Latest 10-K as of: 2026-05-22.

SIC breadcrumb: Manufacturing > SIC Major Group 30 > SIC 3021 Rubber & Plastics Footwear

SEC company page: https://www.sec.gov/edgar/browse/?CIK=910521. Latest filing source: 0001628280-26-037664.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-22. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000910521.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-05-22. Report date: 2026-03-31.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read together with our

consolidated financial statements in Part IV within this Annual Report. This discussion includes an analysis of our

financial condition and results of operations for the years ended March 31, 2026, and 2025 and year-over-year

comparisons between those periods. For an analysis of our financial condition and results of operations for the

years ended March 31, 2025, and 2024 and year-over-year comparisons between those periods, refer to Part II,

Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual

Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the SEC on May 23, 2025.

Certain statements made in this section constitute “forward-looking statements,” which are subject to numerous

risks and uncertainties. Our actual results of operations may differ materially from those expressed or implied by

these forward-looking statements as a result of many factors, including those set forth in the section titled

“Cautionary Note Regarding Forward-Looking Statements” and Part I, Item 1A, “Risk Factors,” within this Annual

Report.

Unless otherwise indicated, all figures herein are expressed in thousands, except per share data. References to

“domestic” refer to the US.

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 three proprietary brands: HOKA, UGG, and Teva. Refer to the section below entitled “Reportable Operating

Segments Overview” for information regarding the phase out of standalone operations for the Koolaburra brand and

AHNU brand, and the prior sale of the Sanuk brand.

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 and international distributors in our wholesale channel, and directly to

global consumers through our DTC channel, which is comprised of an e‑commerce and retail store presence. We

seek to differentiate our brands and products by offering diverse lines that emphasize fashion, performance,

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.

Financial Highlights

Consolidated financial performance highlights for fiscal year 2026 (current period), compared to fiscal year 2025

(the prior period), were as follows:

•Net sales increased 9.8% to $5,472,296.

◦Brand

▪HOKA brand net sales increased 15.9% to $2,587,330.

▪UGG brand net sales increased 8.2% to $2,738,758.

▪Other brands net sales decreased 33.9% to $146,208.

◦Channel

▪Wholesale channel net sales increased 12.3% to $3,208,107.

▪DTC channel net sales increased 6.3% to $2,264,189.

◦Geography

▪Domestic net sales increased 0.2% to $3,191,518.

▪International net sales increased 26.8% to $2,280,778.

•Gross profit as a percentage of net sales (gross margin) decreased 20 basis points to 57.7%.

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•SG&A expenses increased 11.0% to $1,894,823.

•Income from operations increased 7.1% to $1,262,903.

•Income from operations as a percentage of net sales (operating margin) decreased 50 basis points

to 23.1%.

•Diluted earnings per share increased 10.9% to $7.02 per share.

Trends And Uncertainties Impacting Our Business And Industry

Our business and industry are subject to several important trends and uncertainties, including the following:

Macroeconomic and Geopolitical Factors

•Macroeconomic factors, including inflationary pressures, increased tariffs, rising supply chain costs,

high interest rates, foreign currency exchange rate volatility, escalating global conflicts, changes in

discretionary spending, and recession risks, are creating a complex and challenging environment

for our business and industry that may continue to pressure our results of operations, including our

gross margin. For example, prolonged or escalating conflicts in the Middle East could disrupt our

supply chain and increase energy, transportation, and commodity costs, as well as cause shipping

delays. While these factors did not materially impact our results of operations during the current

period, they could negatively affect us in future periods.

•We are exposed to risks from evolving trade policies, including higher tariffs and restrictions

affecting goods imported from certain regions where we have a concentration of sourcing and

manufacturing. Recent judicial, regulatory, and administrative developments regarding tariffs

imposed under the International Emergency Economic Powers Act and other authorities have

increased uncertainty related to both our future duty costs and potential recovery of previously paid

duties. The US Customs and Border Protection have announced a phased process for submitting

refund requests; however, the availability, timing, and amount of any refunds remain uncertain. As

of March 31, 2026, we have not recognized any amounts related to potential tariff refunds or other

recoveries. We continue to monitor developments and pursue mitigation strategies, including

selective pricing actions, inventory and sourcing management, supplier diversification, and

negotiating cost-sharing arrangements; however, we may be unable to offset tariff-related cost

impacts, which could materially and adversely affect our gross margin and demand for our

products.

Brand and Omnichannel Strategy

•We are focused on increasing global consumer awareness, cultural relevance, and adoption of our

brands, which has contributed positively to our results of operations. Our global brand growth

strategy seeks to drive adoption through product innovation and marketing investments across

geographies and channels, while enhancing the customer experience through category expansion

and loyalty-driven engagement.

•We continue to manage marketplace inventory through product segmentation and differentiation.

During the current period, promotional activity slightly increased compared to exceptionally low

levels in the prior period; however, we continued to achieve high levels of full-price sell through by

aligning product assortments with marketplace demand. These efforts contributed to largely

maintaining our gross margin compared to the prior period, even as the retail environment became

more promotional. We may not realize similar gross margin benefits in our fiscal year ending

March 31, 2027 (next fiscal year) due to various factors, including the macroeconomic and

geopolitical factors discussed above and the potential impact from our pricing strategies.

•Our long-term strategy is to grow our DTC channel to represent a larger portion of our total net

sales by differentiating the consumer experience relative to the wholesale channel and driving

consumer acquisition and retention. We are investing in e-commerce platform upgrades, data

analytics, consumer experience initiatives, and selective global retail store expansion. We expect

growth in our DTC channel’s net sales to continue to positively impact our gross margin; however,

as we also seek to expand distribution with wholesale partners to drive brand awareness and

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market share, our wholesale channel may represent a larger portion of our net sales in certain

periods, which could pressure gross margin in those periods.

•We are pursuing growth strategies for the HOKA brand and UGG brand to grow international sales

to represent a larger portion of our total net sales. We continue to selectively expand our HOKA

brand presence through additional wholesale partner locations and targeted DTC channel retail

store expansion. We are also investing in regions that provide influential market presence to build

brand awareness, including through the launch of our US HOKA brand loyalty program during fiscal

year 2026. We expect to continue investing in the UGG brand and HOKA brand global loyalty

programs.

•We continue to take actions to reposition the Teva brand, including refocusing certain wholesale

channel distribution toward outdoor and premium retail partners and emphasizing brand messaging

around its outdoor-adventure heritage. Our efforts to reposition the Teva brand and our future

results of operations remain uncertain. In particular, macroeconomic pressure on value‑oriented

domestic wholesale consumers may continue to adversely affect Teva brand performance.

Supply Chain

•To support our growth, we continue to invest in our global distribution network, including our

warehouses and DCs, as well as 3PLs. We also continue to diversify our independent

manufacturers and the regions in which they operate; however, we maintain a significant

concentration of sourcing and manufacturing in Southeast Asia. In addition, we are currently

transitioning one of our international 3PLs to a new partner, which may create temporary

operational risks. We expect to continue upgrading our global distribution network to continue

meeting customer and consumer demand.

Reportable Operating Segments Overview

As of March 31, 2026, our three reportable operating segments include the worldwide operations of the HOKA

brand, UGG brand, and Other brands.

HOKA Brand. The HOKA brand is an authentic premium line of year-round performance footwear, which offers

enhanced cushioning and inherent stability with minimal weight. Originally designed for ultra-runners, the brand now

appeals to world champions, tastemakers, and everyday athletes. Expansion into additional product categories,

elevated marketing campaigns, and investments in brand experiences, coupled with 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 apparel and

accessories.

We believe demand for HOKA brand products will continue to be driven by the following:

•Leading performance product innovation, a deep connection to culture and community, category

expansion into apparel and lifestyle, and key franchise management, including consumer led

product flow and strategic product lifecycle cadence.

•Increased global brand awareness and new consumer adoption through enhanced global marketing

activations and online consumer acquisition, including building a connected ecosystem through

social media platforms, e-commerce, and retail.

•Thoughtful and strategic distribution choices, allowing the HOKA brand access and introduction to a

broader, more diverse, consumer base.

•Strategic investment in scaling lifestyle footwear, apparel, and accessories.

UGG Brand. The UGG brand is one of the most iconic and recognized brands in our industry, which highlights our

successful track record of building niche brands into consumer-focused fashion lifestyle market leaders. Born on the

California coast to warm surfers after they caught and rode the waves, we create iconic products and experiences

that are made for people to feel comfort, softness, warmth, and confidence. With loyal consumers around the world,

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innovative products, and elevated storytelling, the UGG brand has proven to be a highly resilient consumer-focused

line of premium footwear, apparel, and accessories that has driven both domestic and international sales growth

with year-round product offerings that appeal to a growing global audience and a broad demographic.

We believe demand for UGG brand products will continue to be driven by the following:

•Successful acquisition of a diverse global consumer base, and focusing on key markets, through

strategic marketing activations and collaborations that resonate with a fashionable consumer.

•High consumer brand loyalty due to elevated brand experiences and consistent delivery of crafted;

purposefully built and luxuriously comfortable footwear, apparel, and accessories.

•Diversification of our footwear product offerings, such as our spring and summer lines, as well as

expanded category offerings for Men’s products such as the slip-on shoe and sneaker category,

and more iconic fashion product for our Classics line, including reimagining existing iconic styles

into new categories.

•Continued expansion of our apparel and accessories businesses.

Other Brands. Other brands consist primarily of the Teva 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 Other

brands reportable operating segment includes financial results of the Koolaburra brand and AHNU brand, for which

the phase out of standalone operations were completed during the third and fourth quarters of fiscal year 2026, as

well as financial results for the former Sanuk brand during the prior period through the sale date of August 15, 2024

(Sanuk Brand Sale Date). Refer to the section titled “Reportable Operating Segments” in Note 1, “General,” of our

consolidated financial statements in Part IV within this Annual Report for further information.

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, including within our

consolidated financial statements, we provide certain financial information on a non-GAAP basis (non-GAAP

financial measures). We provide non-GAAP financial measures and information that may assist investors in

understanding our results of operations and assessing our prospects for future performance, which primarily consist

of certain constant currency measures and total segment-level financial information.

We believe presenting certain financial and operating measures on a constant currency basis is important as it

excludes the impact of foreign currency exchange rate fluctuations that are not indicative of our core results of

operations and are largely outside of our control. We calculate our constant currency non-GAAP financial measures

for current period financial information, such as total net sales using the foreign currency exchange rates that were

in effect during the previous comparable period, excluding the effects of foreign currency exchange rate hedges and

remeasurements in the consolidated financial statements. We also report comparable DTC sales on a constant

currency basis for DTC operations that were open throughout the current and prior reporting periods, and we may

adjust prior reporting periods to conform to current period accounting policies. The information presented on a

constant currency basis, as we present such information, may not necessarily be comparable to similarly titled

information presented by other companies, and may not be appropriate measures for comparing our performance

relative to other companies. Constant currency measures should not be considered in isolation, or as an alternative

to US dollar measures that reflect current period foreign currency exchange rates or to other financial or operating

measures presented in accordance with US GAAP.

We believe presenting certain segment-level operating measures, including total segment income from operations

and total segment SG&A expenses, is important because it allows for an evaluation of operating performance and

cost structure across brands. Our segment-level non-GAAP financial measures represent the results of operations

and expenses for our individual reportable operating segments and differ from our consolidated results because

they exclude certain unallocated enterprise and shared brand expenses. Our segment-level non-GAAP financial

measures should not be considered in isolation, or as an alternative to consolidated financial and operating

measures presented in accordance with US GAAP.

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Seasonality

A significant part of the UGG brand’s business has historically been seasonal, with the highest percentage of net

sales occurring in the third fiscal quarter, which has contributed to variation in results of operations from quarter to

quarter. However, as the HOKA brand’s net sales have increased as a percentage of our aggregate net sales, the

impacts of seasonality have been partially mitigated as HOKA brand sales are generally more evenly distributed

throughout the fiscal year, although quarterly results may fluctuate based on the timing of product launches. This

trend is expected to continue. In addition, we have further mitigated the impacts of seasonality by diversifying and

expanding our year-round product offerings across our brands.

Results of Operations

Year Ended March 31, 2026, Compared to Year Ended March 31, 2025. Results of operations were as follows:

Years Ended March 31,

2026

2025

Change

Amount

% (1)

Amount

% (1)

Amount

%

Net sales

$5,472,296

100.0%

$4,985,612

100.0%

$486,684

9.8%

Cost of sales

2,314,570

42.3

2,099,949

42.1

(214,621)

(10.2)

Gross profit

3,157,726

57.7

2,885,663

57.9

272,063

9.4

Selling, general, and administrative

expenses

1,894,823

34.6

1,706,571

34.3

(188,252)

(11.0)

Income from operations

1,262,903

23.1

1,179,092

23.6

83,811

7.1

Total other income, net

(63,453)

(1.2)

(64,207)

(1.3)

(754)

(1.2)

Income before income taxes

1,326,356

24.2

1,243,299

24.9

83,057

6.7

Income tax expense

302,285

5.5

277,208

5.5

(25,077)

(9.0)

Net income

1,024,071

18.7

966,091

19.4

57,980

6.0

Total other comprehensive income,

net of tax

13,735

0.3

1,079

—

12,656

1,172.9

Comprehensive income

$1,037,806

19.0%

$967,170

19.4%

$70,636

7.3%

Net income per share

Basic

$7.04

$6.36

$0.68

10.7%

Diluted

$7.02

$6.33

$0.69

10.9%

(1) May not calculate on rounded amounts.

Net Sales. Net sales by brand, channel, and geography were as follows:

Years Ended March 31,

2026

2025

Change

Amount

Amount

Amount

%

Net sales by brand

HOKA brand

Wholesale

$1,651,794

$1,397,776

$254,018

18.2%

Direct-to-Consumer

935,536

835,314

100,222

12.0

Total

2,587,330

2,233,090

354,240

15.9

UGG brand

Wholesale

1,444,686

1,282,319

162,367

12.7

Direct-to-Consumer

1,294,072

1,249,032

45,040

3.6

Total

2,738,758

2,531,351

207,407

8.2

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Years Ended March 31,

2026

2025

Change

Amount

Amount

Amount

%

Other brands

Wholesale

111,627

175,770

(64,143)

(36.5)

Direct-to-Consumer

34,581

45,401

(10,820)

(23.8)

Total

146,208

221,171

(74,963)

(33.9)

Total (1)

$5,472,296

$4,985,612

$486,684

9.8%

Net sales by channel

Total Wholesale

$3,208,107

$2,855,865

$352,242

12.3%

Total Direct-to-Consumer

2,264,189

2,129,747

134,442

6.3

Total (1)

$5,472,296

$4,985,612

$486,684

9.8%

Net sales by geography

Domestic

$3,191,518

$3,186,709

$4,809

0.2%

International

2,280,778

1,798,903

481,875

26.8

Total (1)

$5,472,296

$4,985,612

$486,684

9.8%

(1) The Other brands reportable operating segment for fiscal year 2026, includes financial results for the phase out of the

Koolaburra brand and AHNU brand. The Other brands reportable operating segment for the prior period includes financial

results for the former Sanuk brand through the Sanuk Brand Sale Date. Refer to the section titled “Reportable Operating

Segments Overview,” above for further information.

Total net sales increased primarily due to higher net sales for the HOKA brand and UGG brand, partially offset by

lower net sales for the Other brands. 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 net sales growth across both

wholesale and DTC channels. Growth was led by international sales, and also included an increase

in domestic sales, driven by our continued marketplace strategy to meet increased global demand

as consumers adopt key franchises, including new innovation introduced during the current period.

•Net sales of the UGG brand increased due to higher global net sales growth across both wholesale

and DTC channels. Growth was led by international sales, with increases in domestic sales for the

wholesale channel and a slight increase in the DTC channel. This collective growth was as a result

of increased global demand for key franchises and further adoption of year-round product offerings.

•Net sales of the Other brands decreased primarily due to lower domestic net sales in the wholesale

channel driven by the phase out of standalone operations of the Koolaburra brand and the sale of

the Sanuk brand in the prior period. The decrease was also due to lower global net sales for the

Teva brand across both channels, primarily driven by lower sales in the value-oriented consumer

segment of the wholesale channel as the Teva brand refocuses its wholesale distribution with

outdoor and premium retailers.

Supplemental Disclosure

•On a constant currency basis, net sales increased by 9.0%, compared to the prior period.

•Comparable DTC channel net sales for the 52 weeks ended March 29, 2026, increased by 4.6%,

compared to the prior period.

•We experienced an increase of 6.2% in the total volume of units sold to 78,700 from 74,100,

compared to the prior period. Units sold include all categories such as footwear, apparel,

accessories, home goods, and care kits across all brands. Percentages may not calculate on

rounded units.

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Gross Profit. Gross margin decreased to 57.7% from 57.9%, compared to the prior period, primarily due to

incremental tariffs on domestic goods and a slightly unfavorable channel mix; partially offset by cost‑sharing

arrangements, strategic price increases, and favorable product mix, along with slightly favorable foreign currency

exchange rate fluctuations and freight costs.

Selling, General, and Administrative Expenses. Drivers of significant net changes in SG&A expenses, compared to

the prior period, were as follows:

•Increased advertising, marketing, and promotion expenses of approximately $63,600, primarily due

to higher promotion expenses for the HOKA brand and UGG brand of approximately $71,300 to

drive global brand awareness and market share gains, highlight new product categories, and

provide localized marketing; partially offset by lower promotion expenses for the Other brands of

approximately $7,700 primarily driven by the phase out of standalone operations of the Koolaburra

brand and AHNU brand as well as the sale of the Sanuk brand in the prior period.

•Increased other SG&A expenses of approximately $59,000, primarily due to higher IT expenses,

sales commissions, 3PL service fees, and other miscellaneous expenses. The increase in other

SG&A expenses was comprised of approximately $51,300 of variable expenses specific to our

brands, primarily for the HOKA brand and UGG brand, and approximately $7,700 of unallocated

enterprise and shared brand expenses.

•Increased rent and occupancy of approximately $36,700, primarily due to higher rent expenses for

investments in our global retail store footprint, as well as higher operating expenses for our owned

warehouses and DCs. The increase in rent and occupancy was comprised of approximately

$28,000 of expenses specific to our brands, and approximately $8,700 of unallocated enterprise

and shared brand expenses.

•Increased payroll and related costs of approximately $33,000, primarily due to higher headcount for

our brands, partially offset by unallocated enterprise and shared brand expenses. The increase in

payroll and related costs was comprised of approximately $41,700 of expenses specific to our

brands, partially offset by approximately $8,700 of lower unallocated enterprise and shared brand

expenses primarily due to payroll efficiencies in our owned warehouses and DCs.

Income from Operations. Income (loss) from operations by reportable operating segment was as follows:

Years Ended March 31,

2026

2025

Change

Amount

Amount

Amount

%

Income (loss) from operations

HOKA brand

$910,980

$848,505

$62,475

7.4%

UGG brand

1,045,331

1,002,873

42,458

4.2

Other brands (1)

16,365

34,578

(18,213)

(52.7)

Unallocated enterprise and shared brand

expenses (2)

(709,773)

(706,864)

(2,909)

(0.4)

Total

$1,262,903

$1,179,092

$83,811

7.1%

(1) The Other brands reportable operating segment for fiscal year 2026, includes financial results for the phase out of the

Koolaburra brand and AHNU brand. The Other brands reportable operating segment for the prior period includes financial

results for the former Sanuk brand through the Sanuk Brand Sale Date. Refer to the section titled “Reportable Operating

Segments Overview,” above for further information.

(2) To the extent that consolidated SG&A expenses exceed reportable operating segment SG&A expenses, the costs are recorded

in unallocated enterprise and shared brand expenses. Refer to Note 13, “Reportable Operating Segments,” of our consolidated

financial statements in Part IV within this Annual Report for further information.

The increase in total income from operations, compared to the prior period, was primarily due to higher net sales,

partially offset by higher SG&A expenses as a percentage of net sales and slightly lower gross margins driven by

tariffs.

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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 HOKA brand was due to higher net sales, partially

offset by lower gross margins driven by tariffs, as well as higher SG&A expenses as a percentage

of net sales driven by other SG&A expenses including sales commissions, as well as higher rent

and occupancy, payroll and related costs, and advertising, marketing and promotional expenses.

•The increase in income from operations of the UGG brand was due to higher net sales, partially

offset by slightly lower gross margins driven by tariffs, as well as higher SG&A expenses as a

percentage of net sales primarily driven by advertising, marketing, and promotion expenses, as well

as other SG&A expenses including sales commissions.

•The decrease in income from operations of Other brands was primarily driven by the Teva brand

from lower net sales and gross margins due to tariffs, along with higher SG&A expenses as a

percentage of net sales; combined with lower income from operations driven by the phase out of

standalone operations of the Koolaburra brand.

•The increase in unallocated enterprise and shared brand expenses was primarily due to higher rent

and occupancy for our owned warehouses and DCs, as well as higher other SG&A expenses

primarily related to IT expenses and 3PL service fees, partially offset by payroll efficiencies in our

owned warehouses and DCs.

Income Tax Expense. Income tax expense and our effective income tax rate were as follows:

Years Ended March 31,

2026

2025

Income tax expense

$302,285

$277,208

Effective income tax rate

22.8%

22.3%

The net increase in our effective income tax rate, compared to the prior period, was primarily due to increases in net

unrecognized tax benefits, partially offset by tax benefits from changes to our jurisdictional mix of earnings.

Net Income. The increase in net income, compared to the prior period, was due to higher net sales, partially offset

by lower operating margin. 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, Net of Tax. The increase in total other comprehensive income, net of tax,

compared to the prior period, was primarily due to higher foreign currency translation gains relating to changes in

our net asset position against European and Asian foreign currency exchange rates and higher unrealized gains on

derivative contracts.

Liquidity and Capital Resources

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.

Furthermore, our liquidity needs may evolve due to a number of factors, including changes in business conditions,

changes in strategic initiatives, including any investments or acquisitions we may decide to pursue, changes in our

capital allocation strategy, including the timing and scope of share repurchases, and changes in the macroeconomic

or geopolitical landscape.

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. Incurring

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indebtedness under new or modified borrowing arrangements would subject us to debt service obligations and

additional covenants that could restrict our operations and further encumber our assets. 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. Although we believe we have adequate sources

of liquidity to support our cash needs and business strategy over the long term, factors such as changes in

consumer preferences or tastes and changes in the macroeconomic or geopolitical environment could adversely

affect our liquidity and capital resources.

Sources of Liquidity. We finance our working capital and operating requirements using a combination of cash and

cash equivalents balances, cash provided by operating activities, and repatriation of cash. We also have available

borrowing capacity under our revolving credit facilities. We believe our sources of cash and cash equivalents 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 allow us to pursue our business strategies and plans.

Cash and Cash Equivalents. As of March 31, 2026, and 2025, our cash and cash equivalents balance is $1,907,249

and $1,889,188, respectively, 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.

Cash Provided by Operating Activities. For the years ended March 31, 2026, and 2025, we generated $1,181,955

and $1,044,523, respectively, of cash from operating activities. Refer to the section titled “Cash Flows” below for

further discussion on cash flows generated from ongoing operating activities.

Repatriation of Cash. Our cash repatriation strategy, and by extension, our liquidity, may be impacted by several

additional considerations, which include future changes to, or our interpretations of, global tax law and regulations,

and our actual earnings in various jurisdictions in future periods. During the years ended March 31, 2026, and 2025,

no cash and cash equivalents were repatriated from an international subsidiary that were subject to income taxes.

As of March 31, 2026, and 2025, we have $653,924 and $481,836, respectively, of cash and cash equivalents held

by international subsidiaries, a portion of which may be subject to additional foreign withholding taxes if it were to be

repatriated. We continue to evaluate our cash repatriation strategy and currently anticipate repatriating current and

future unremitted earnings of non-US subsidiaries to the extent they have been subject to US income tax, if such

cash is not required to fund ongoing international operations. 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.

During the years ended March 31, 2026, and 2025, we did not generate significant pre-tax earnings from any

countries which do not impose a corporate income tax. 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. Information about our revolving credit facilities available as of March 31, 2026, 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. Under the Primary Credit Facility, there is no outstanding balance,

$399,407 of available borrowings, and $593 of outstanding letters of credit.

•China Credit Facility. We have an uncommitted revolving line of credit of up to CNY300,000, or

$43,512, with an overdraft facility sublimit of CNY100,000, or $14,504 (China Credit Facility). Under

the China Credit Facility, there is no outstanding balance, $43,032 of available borrowings, and

$480 of outstanding bank guarantees.

•Debt Covenants. 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 regarding the terms of our revolving credit facilities.

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Primary Cash Requirements. Our primary cash requirements include working capital, purchase obligations,

payments to fulfill operating lease obligations, capital expenditures, and our stock repurchase program.

Working Capital. Our working capital requirements begin when we purchase materials and inventories and continue

until we collect the resulting trade accounts receivable. A significant portion of the UGG brand’s business has

historically been seasonal, with a higher concentration of net sales in the third fiscal quarter, which contributes to

variability in our working capital requirements and necessitates the use of available cash to build inventory levels in

advance of higher selling seasons. While the impact of seasonality has been partially mitigated by the increasing

contribution of HOKA brand net sales, which are generally more evenly distributed throughout the fiscal year, as

well as by the diversification and expansion of our year-round product offerings across our brands, we expect

working capital requirements to continue to fluctuate period to period.

Purchase Obligations. We have various types of purchase obligations, including obligations to purchase product,

commodities, and other purchase obligations such as service contracts, which are incurred in the normal course of

business but are considered commitments and contingencies that are not recorded in our consolidated financial

statements. As of March 31, 2026, our purchase obligations total $1,374,265. Refer to Note 8, “Commitments and

Contingencies,” of our consolidated financial statements in Part IV within this Annual Report for further information

on our purchase obligations.

Operating Lease Obligations. We primarily lease retail stores, showrooms, offices, and distribution facilities. As of

March 31, 2026, undiscounted operating lease payments recorded in the consolidated balance sheets total

$436,556. This amount excludes undiscounted minimum operating lease payments totaling $22,727 related to

leases signed during fiscal year 2026 that had not yet commenced. Refer to Note 7, “Leases,” of our consolidated

financial statements in Part IV within this Annual Report for further information on our operating lease obligations.

Capital Expenditures and Cloud Computing Arrangements. We estimate that aggregate capital expenditures and

certain implementation costs for cloud computing arrangements to be made before the end of our next fiscal year

will range from approximately $145,000 to $155,000. We anticipate these expenditures will primarily relate to

expanding and upgrading our HOKA brand and UGG brand retail store fleet, completing IT infrastructure and

system improvements, upgrading our office facilities, and upgrading our existing warehouses and DCs. 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 upgrade

or replace facilities.

Stock Repurchase Program. We continue to evaluate our capital allocation strategy and consider further

opportunities to utilize our cash resources in a way that will profitably grow our business, meet our strategic

objectives, and drive stockholder value, including by potentially repurchasing additional shares of our common

stock. As of March 31, 2026, the aggregate remaining approved amount under our stock repurchase program is

$1,549,602. 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.

On May 20, 2026, our Board approved an additional authorization of $3,500,000 to repurchase shares of our

common stock under the same conditions as the prior stock repurchase program, resulting in an aggregate

remaining authorization of approximately $4,840,000 as of that date.

Refer to Note 11, “Stockholders’ Equity,” of our consolidated financial statements in Part IV and to Part II, Item 5,

“Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities,”

within this Annual Report for further information regarding our stock repurchase program.

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Cash Flows

The following table summarizes the major components of our consolidated statements of cash flows for the periods

presented:

Years Ended March 31,

2026

2025

Change

Amount

Amount

Amount

%

Net cash provided by operating activities

$1,181,955

$1,044,523

$137,432

13.2%

Net cash used in investing activities

(84,612)

(75,003)

(9,609)

(12.8)

Net cash used in financing activities

(1,084,044)

(581,334)

(502,710)

(86.5)

Effect of foreign currency exchange rates on

cash and cash equivalents

4,762

(1,049)

5,811

554.0

Net change in cash and cash equivalents

$18,061

$387,137

$(369,076)

(95.3)%

Operating Activities. Our primary source of liquidity was net cash provided by operating activities, which was

driven by our net income after non-cash adjustments and changes in operating assets and liabilities.

The increase in net cash provided by operating activities during the year ended March 31, 2026, compared to the

prior period, was due to $80,635 of favorable net income after non-cash adjustments, as well as $56,797 of

favorable changes in operating assets and liabilities. Changes in operating assets and liabilities were primarily due

to favorable impacts from (1) timing of tax payments and receipts; (2) a higher rate of collections for trade accounts

receivable, net, on higher net sales; and (3) timing of purchases of inventory; partially offset by unfavorable impacts

from (4) net trade accounts payable from timing of receipts of goods and services and related disbursements; (5)

timing of derivative contract cash settlements recorded to prepaid expenses and other current assets; and (6) timing

of commodity deposits and investments in cloud computing arrangements recorded in other assets.

Investing Activities. The increase in net cash used in investing activities during the year ended March 31, 2026,

compared to the prior period, was primarily due to cash proceeds from the sale of assets received during the prior

period, partially offset by a decrease in purchases of property and equipment.

Financing Activities. The increase in net cash used in financing activities during the year ended March 31, 2026,

compared to the prior period, was primarily due to a higher dollar value of stock repurchases, inclusive of excise

taxes.

Critical Accounting Estimates

The preparation of our consolidated financial statements in accordance with US GAAP requires management to

make estimates and assumptions that affect the amounts reported. Management bases these estimates and

assumptions upon historical experience, existing and known circumstances, authoritative accounting

pronouncements, and other factors it believes to be reasonable. In addition, management has considered the

potential impact of macroeconomic and geopolitical factors on our financial condition, results of operations, and

liquidity, including inflationary pressures, increased tariffs, rising supply chain costs, high interest rates, foreign

currency exchange rate volatility, escalating global conflicts, changes in discretionary spending, and recession risks.

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.

We believe the following critical accounting estimates involve a significant level of estimation uncertainty and the

balances have had or are reasonably likely to have a material impact on our financial condition or results of

operations. 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.

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Sales Returns and Chargebacks. Revenue is recognized net of estimates, including for sales returns and

chargebacks. Actual sales returns and chargebacks may differ from our estimates and are based on various factors

including the following:

Sales Return Liability. The estimate of the sales return liability is determined based on several factors, including

known and actual returns, historical returns, and any recent events that could result in a change from historical

return rates. For our wholesale channel, we base our estimate of sales returns on approved customer return

requests, historical returns experience, and recent events that may affect expected return rates. For our DTC

channel, we estimate sales returns using a lag compared to the prior period and consider historical experience and

recent events or trends that may affect expected return rates.

Allowance for Chargebacks. We record a chargeback allowance based primarily on known circumstances, such as

price adjustments and short shipments, as well as unknown circumstances based on historical trends related to the

timing and amount of chargebacks taken against customer invoices.

Refer to Note 2, “Revenue Recognition and Business Concentrations,” of our consolidated financial statements and

Schedule II, “Total Valuation and Qualifying Accounts,” in Part IV within this Annual Report for further information

regarding the sales return liability and the allowance for chargebacks.

Allowance for Doubtful Accounts. 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, macroeconomic and geopolitical conditions and

forecasts, historical experience, and the customers’ creditworthiness. Changes in the characteristics of our trade

accounts receivable including the aforementioned factors, are reviewed periodically and may lead to adjustments in

our allowance for doubtful accounts. Actual future losses from uncollectible accounts may differ from our estimates.

Refer to Schedule II, “Total Valuation and Qualifying Accounts,” in Part IV within this Annual Report for further

information on our allowance for doubtful accounts.

Inventories. 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. Net realizable

value is the estimated selling price in the ordinary course of business, less reasonably predictable costs to sell.

We regularly review inventory for excess, obsolete, and impaired inventory to evaluate write-downs to the lower of

cost or net realizable value. Factors that may trigger inventory write-downs include damage, obsolescence, excess

quantities, discontinued styles, and declines in estimated selling prices, among others. Our evaluation considers

current and anticipated demand, historical liquidation and shrinkage experience, aging of inventory, and current

market conditions.

While we believe that adequate write-downs for inventory have been provided for in the consolidated financial

statements, our evaluation may be affected by factors outside our control, and we could experience additional

inventory write-downs in the future.

Income Taxes. Income taxes are accounted for using the asset and liability method. Deferred tax assets and

liabilities are recognized for the future tax consequences attributable to temporary differences between the financial

statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and

liabilities are measured using enacted tax rates that will be in effect for the years in which those tax assets and

liabilities are expected to be realized or settled.

We record a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to

be realized. We believe it is more likely than not that forecasted income, together with future reversals of existing

taxable temporary differences, will be sufficient to recover our net deferred tax assets, after consideration of

valuation allowances, which primarily relate to foreign losses in certain jurisdictions. If we determine all, or part of

our deferred tax assets are not realizable, or that additional deferred tax assets have become realizable, we will

adjust the valuation allowance accordingly, with a corresponding impact 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. Our estimates, relative to income tax expense, consider current global tax laws and regulations (and our

interpretations thereof) and possible outcomes of current and future audits conducted by foreign and domestic tax

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authorities. Changes in tax laws and regulations (and our interpretations thereof), and the resolution of current and

future tax audits, could significantly affect the amounts provided for income tax expense in our results of operations.

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. 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. This assessment is based on the cash flow projections and operational and fiscal objectives of each

of our US and international subsidiaries. We have not changed our indefinite reinvestment assertion of foreign

earnings other than previously taxed earnings and profits.

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.