DECKERS OUTDOOR CORP

Previous wording

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: HOKA, UGG, Teva, Koolaburra, and AHNU. 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, 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.

Current wording

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, 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.

Previous wording

Consolidated financial performance highlights for the six months ended September 30, 2025, compared to the prior period, were as follows:

Current wording

Consolidated financial performance highlights for the nine months ended December 31, 2025, compared to the prior period, were as follows:

Previous wording

▪HOKA brand net sales increased 15.3% to $1,287,205.

Current wording

▪HOKA brand net sales increased 16.3% to $1,916,087.

Previous wording

▪UGG brand net sales increased 12.3% to $1,024,679.

Current wording

▪UGG brand net sales increased 8.0% to $2,330,154.

Previous wording

▪Other brands net sales decreased 22.5% to $83,494.

Current wording

▪Other brands net sales decreased 33.3% to $106,686.

Previous wording

•Operating margin remained flat at 20.5%.

Current wording

•Operating margin remained flat at 25.4%.

Previous wording

•Diluted earnings per share increased 17.1% to $2.74 per share.

Current wording

•Diluted earnings per share increased 13.3% to $6.04 per share.

Previous wording

Refer to Note 1, “General,” of our condensed consolidated financial statements in Part I, Item 1 within this Quarterly Report and to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our 2025 Annual Report for additional information regarding the impacts of seasonality on our business.

Current wording

Refer to Note 1, “General,” of our condensed consolidated financial statements in Part I, Item 1 within this Quarterly Report and to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our 2025 Annual Report for further information regarding the impacts of seasonality on our business.

Previous wording

Total net sales increased primarily due to higher net sales for the UGG and HOKA brands, partially offset by lower net sales for Other brands. Drivers of significant changes in net sales, compared to the prior period, were as follows:

Current wording

Total net sales increased primarily due to higher net sales for the HOKA and UGG brands across all channels, partially offset by lower net sales for Other brands. Drivers of significant changes in net sales, compared to the prior period, were as follows:

Previous wording

•On a constant currency basis, net sales increased by 8.3%, compared to the prior period.

Current wording

•On a constant currency basis, net sales increased by 6.8%, compared to the prior period.

Previous wording

•Comparable DTC channel net sales for the 13 weeks ended September 28, 2025, decreased by 2.9%, compared to the prior period.

Current wording

•Comparable DTC channel net sales for the 13 weeks ended December 28, 2025, increased by 7.3%, compared to the prior period.

Previous wording

•We experienced an increase of 6.6% in the total volume of units sold to 22,700 from 21,300, compared to the prior period. Units sold include all categories such as footwear, apparel, accessories, home goods, and care kits.

Current wording

•We experienced an increase of 4.8% in the total volume of units sold to 26,100 from 24,900, compared to the prior period. Units sold include all categories such as footwear, apparel, accessories, home goods, and care kits. Percentages may not calculate on rounded units.

Previous wording

•Increased advertising, marketing, and promotion expenses of approximately $11,400, primarily due to higher promotional marketing expenses for the UGG and HOKA brands to drive global brand awareness and market share gains, highlight new product categories, and provide localized marketing.

Current wording

•Increased advertising, marketing, and promotion expenses of approximately $18,300, primarily due to higher promotional marketing expenses for the UGG and HOKA brands of approximately $22,100 to drive global brand awareness and market share gains, highlight new product categories, and provide localized marketing; partially offset by lower promotional marketing expenses for Other brands of approximately $3,800 driven by the phase out of standalone operations of the Koolaburra brand.

Previous wording

•Increased rent and occupancy of approximately $18,300, primarily due to higher operating expenses for our owned warehouses and DCs, as well as higher rent expenses for investments in our global retail store footprint, primarily to support the HOKA brand.

Current wording

•Increased rent and occupancy of approximately $6,300, primarily due to higher rent expenses for investments in our global retail store footprint.

Previous wording

•Decreased net foreign currency-related remeasurement gains of approximately $10,000, primarily due to less favorable changes in Asian and Canadian exchange rates against the US dollar.

Current wording

•Decreased net foreign currency-related remeasurement losses of approximately $16,100, primarily due to more favorable changes in European, Asian, and Canadian exchange rates against the US dollar.

Previous wording

The increase in total income from operations, compared to the prior period, was primarily due to higher net sales and lower SG&A expenses as a percentage of net sales, partially offset by lower gross margins. Drivers of significant net changes in total income from operations, compared to the prior period, were as follows:

Current wording

The increase in total income from operations, compared to the prior period, was primarily due to higher net sales and lower SG&A expenses as a percentage of net sales, partially offset by slightly lower gross margins. Drivers of significant net changes in total income from operations, compared to the prior period, were as follows:

Previous wording

•The increase in income from operations of the HOKA brand was due to higher net sales, partially offset by lower gross margins and higher SG&A expenses as a percentage of net sales, primarily driven by payroll and related costs, rent and occupancy, and other SG&A expenses.

Current wording

•The increase in income from operations of HOKA brand was due to higher net sales at slightly higher gross margins, partially offset by higher SG&A expenses as a percentage of net sales driven by payroll and related costs, rent and occupancy, and other SG&A expenses, as well as advertising, marketing, and promotion expenses.

Previous wording

The net decrease in our effective income tax rate, compared to the prior period, was primarily due to non-recurring changes in valuation allowances on tax attributes, net discrete tax benefits for audit settlements and adjustments to income taxes payable, and changes in jurisdictional mix of worldwide income before income taxes, partially offset by reduced tax benefits for stock-based compensation.

Current wording

The net increase in our effective income tax rate, compared to the prior period, was primarily due to jurisdictional mix of worldwide income before income taxes, as well as non-recurring tax benefits for audit settlements in the prior period and reduced tax benefits from net discrete items, including a change in return-to-provision adjustments and stock-based compensation; partially offset by changes in valuation allowances on tax attributes.

Previous wording

Six Months Ended September 30, 2025, Compared to Six Months Ended September 30, 2024. Results of operations were as follows:

Current wording

Nine Months Ended December 31, 2025, Compared to Nine Months Ended December 31, 2024. Results of operations were as follows:

Previous wording

Total net sales increased primarily due to higher net sales for the HOKA and UGG brands, partially offset by lower net sales for Other brands. Drivers of significant changes in net sales, compared to the prior period, were as follows:

Current wording

Total net sales increased primarily due to higher net sales for the HOKA and UGG brands across all channels, partially offset by lower net sales for Other brands. Drivers of significant changes in net sales, compared to the prior period, were as follows:

Previous wording

•On a constant currency basis, net sales increased by 11.4% compared to the prior period.

Current wording

•On a constant currency basis, net sales increased by 9.3% compared to the prior period.

Previous wording

•Comparable DTC channel net sales for the 26 weeks ended September 28, 2025, decreased by 2.6%, compared to the prior period.

Current wording

•Comparable DTC channel net sales for the 39 weeks ended December 28, 2025, increased by 3.5%, compared to the prior period.

Previous wording

•We experienced an increase of 10.0% in the total volume of units sold to 37,400 from 34,000, compared to the prior period. Units sold include all categories such as footwear, apparel, accessories, home goods, and care kits.

Current wording

•We experienced an increase of 7.6% in the total volume of units sold to 63,400 from 58,900, compared to the prior period. Units sold include all categories such as footwear, apparel, accessories, home goods, and care kits. Percentages may not calculate on rounded units.

Previous wording

•As of September 30, 2025, we have a total of 200 global Company-owned retail stores (including 145 UGG brand retail stores and 55 HOKA brand retail stores).

Current wording

•As of December 31, 2025, we have a total of 205 global Company-owned retail stores (including 144 UGG brand retail stores and 61 HOKA brand retail stores).

Previous wording

•Increased advertising, marketing, and promotion expenses of approximately $24,700, 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.

Current wording

•Increased advertising, marketing, and promotion expenses of approximately $42,800, primarily due to higher promotional marketing expenses for the UGG and HOKA brands of approximately $49,700 to drive global brand awareness and market share gains, highlight new product categories, and provide localized marketing; partially offset by lower promotional marketing expenses for Other brands of approximately $6,900 driven by the phase-out of standalone operations of the Koolaburra brand.

Previous wording

•Increased rent and occupancy of approximately $13,200, primarily due to higher operating expenses for our owned warehouses and DCs, as well as higher rent expenses for investments in our global retail store footprint, primarily to support the HOKA brand.

Current wording

•Increased rent and occupancy of approximately $24,600, 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 $16,400 of expenses specific to our brands, and approximately $8,200 for unallocated enterprise and shared brand expenses.

Previous wording

The increase in total income from operations, compared to the prior period, was primarily due to higher net sales at higher gross margins, partially offset by higher SG&A expenses as a percentage of net sales. Drivers of significant net changes in total income from operations, compared to the prior period, were as follows:

Current wording

The increase in total income from operations, compared to the prior period, was primarily due to higher net sales and lower SG&A expenses as a percentage of net sales, partially offset by slightly lower gross margins. Drivers of significant net changes in total income from operations, compared to the prior period, were as follows:

Previous wording

•The increase in income from operations of HOKA brand was due to higher net sales, partially offset by lower gross margins, as well as higher SG&A expenses as a percentage of net sales primarily driven by payroll and related costs, rent and occupancy, and other SG&A expenses.

Current wording

•The increase in income from operations of the HOKA brand was due to higher net sales, partially offset by lower gross margins, as well as higher SG&A expenses as a percentage of net sales driven by other SG&A expenses, payroll and related costs, and rent and occupancy, as well as advertising, marketing and promotional expenses.

Previous wording

•The increase in income from operations of the UGG brand was due to higher net sales at higher gross margins, partially offset by higher SG&A expenses as a percentage of net sales, primarily driven by advertising, marketing, and promotion expenses, and other SG&A expenses.

Current wording

•The increase in income from operations of the UGG brand was due to higher net sales, partially offset by lower gross margins, 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.

Previous wording

•The increase in unallocated enterprise and shared brand expenses was due to lower net foreign currency-related remeasurement gains, higher rent and occupancy for our owned warehouses and DC's, and higher costs for infrastructure investments and related depreciation, partially offset by lower variable payroll costs for our owned warehouses and DCs and lower other SG&A expenses for travel expenses, legal expenses, and other miscellaneous expenses.

Current wording

•The decrease in unallocated enterprise and shared brand expenses was primarily due to payroll efficiencies for our owned warehouses and DCs and higher net foreign currency-related remeasurement gains, partially offset by higher rent and occupancy for our owned warehouses and DCs, as well as higher other SG&A expenses primarily due to 3PL service fees, IT expenses, and other miscellaneous expenses.

Previous wording

The net decrease in our effective income tax rate, compared to the prior period, was primarily due to non-recurring changes in valuation allowances on tax attributes, net discrete tax benefits for audit settlements and adjustments to income taxes payable, and changes in jurisdictional mix of worldwide income before income taxes, partially offset by reduced tax benefits for stock-based compensation and reserve adjustments.

Current wording

The net increase in our effective income tax rate, compared to the prior period, was primarily due to jurisdictional mix of worldwide income before income taxes, as well as reduced tax benefits from net discrete items, including for stock-based compensation and reserve adjustments; partially offset by changes in valuation allowances on tax attributes.

Previous wording

Net Income. The increase in net income, compared to the prior period, was due to higher net sales at higher gross margins, partially offset by higher SG&A expenses as a percentage of net sales. 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.

Current wording

Net Income. The increase in net income, compared to the prior period, was due to higher net sales and lower SG&A expenses as a percentage of net sales, partially offset by lower gross 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.

Previous wording

Cash and Cash Equivalents. As of September 30, 2025 and March 31, 2025, our cash and cash equivalents balance is $1,414,479 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. 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 allow us to pursue our business strategies and plans. However, there can be no assurance that sufficient capital will continue to be available or that it will be available on terms acceptable to us.

Current wording

Cash and Cash Equivalents. As of December 31, 2025, and March 31, 2025, our cash and cash equivalents balance is $2,086,746 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. 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 allow us to pursue our business strategies and plans. However, there can be no assurance that sufficient capital will continue to be available or that it will be available on terms acceptable to us.

Previous wording

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 interpretations of global tax law and regulations, and our actual earnings in future periods. During the six months ended September 30, 2025, and 2024, no cash and cash equivalents were repatriated from a foreign subsidiary that were subject to income taxes. As of September 30, 2025, and March 31, 2025, we have $366,296 and $481,836, 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. 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 foreign operations. Refer to Note 5, “Income Taxes,” of our consolidated financial statements in Part IV of our 2025 Annual Report for further information regarding our cash repatriation strategy.

Current wording

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 interpretations of global tax law and regulations, and our actual earnings in future periods. During the nine months ended December 31, 2025, and 2024, no cash and cash equivalents were repatriated from a foreign subsidiary that were subject to income taxes. As of December 31, 2025, and March 31, 2025, we have $562,748 and $481,836, 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. 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 foreign operations. Refer to Note 5, “Income Taxes,” of our consolidated financial statements in Part IV of our 2025 Annual Report for further information regarding our cash repatriation strategy.

Previous wording

•Primary Credit Facility. During the six months ended September 30, 2025, we made no borrowings or repayments and there were no material changes to the terms, to the outstanding letters of credit, or to the borrowing availability under our unsecured revolving credit facility disclosed in our 2025 Annual Report.

Current wording

•Primary Credit Facility. During the nine months ended December 31, 2025, we made no borrowings or repayments and there were no material changes to the terms, to the outstanding letters of credit, or to the borrowing availability under our unsecured revolving credit facility disclosed in our 2025 Annual Report.

Previous wording

•China Credit Facility. During the six months ended September 30, 2025, we made no borrowings or repayments and there were no material changes to the terms or to the outstanding bank guarantees under our credit facility in China disclosed in our 2025 Annual Report.

Current wording

•China Credit Facility. During the nine months ended December 31, 2025, we made no borrowings or repayments and there were no material changes to the terms or to the outstanding bank guarantees under our credit facility in China disclosed in our 2025 Annual Report.

Previous wording

3PL Agreements. During the six months ended September 30, 2025, we entered into a 3PL service agreement with a non-cancellable minimum commitment of approximately $93,611 through March 31, 2029, related to the transition of one of our international 3PLs to a new partner with an upgraded warehouse management system which we expect to be operational in the first quarter of our next fiscal year.

Current wording

3PL Agreements. During the nine months ended December 31, 2025, we entered into a 3PL service agreement with a non-cancellable minimum commitment of approximately $93,611 payable through March 31, 2029, related to the transition of one of our international 3PLs to a new partner with an upgraded warehouse management system which we expect to be operational in the first quarter of our next fiscal year.

Previous wording

Operating Lease Obligations. During the six months ended September 30, 2025, we entered into various operating leases agreements in the ordinary course of business to continue the investment in our global retail store footprint, which are recorded on a discounted basis in our condensed consolidated financial statements. Refer to Part I, Item 1, Note 5, "Commitment and Contingencies," for further information on our operating lease obligations.

Current wording

Operating Lease Obligations. During the nine months ended December 31, 2025, we entered into various operating leases agreements in the ordinary course of business to continue the investment in our global retail store footprint, which are recorded on a discounted basis in our condensed consolidated financial statements. Refer to Note 5, "Commitment and Contingencies," of our condensed consolidated financial statements in Part I, Item 1 within this Quarterly Report for further information on our operating lease obligations.

Previous wording

Stock Repurchase Program. As of September 30, 2025, the aggregate remaining approved amount under our stock repurchase program is $2,159,714. 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.

Current wording

Stock Repurchase Program. As of December 31, 2025, the aggregate remaining approved amount under our stock repurchase program is $1,811,214. 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.

Previous wording

The increase in net cash provided by operating activities during the six months ended September 30, 2025, compared to the prior period, was due to $51,227 of favorable net income after non-cash adjustments partially offset by $29,094 of unfavorable changes in operating assets and liabilities. Changes in operating assets and liabilities were primarily due to unfavorable impacts from (1) timing of derivative contract cash settlements, (2) higher cost and earlier purchases of inventory to support elevated demand for our products and the transition to our European 3PL, partially offset by favorable impacts from (3) net trade accounts receivable from timing of sales and respective receipts, (4) net trade accounts payable from timing of receipts of goods and services and related disbursements, and (5) timing of tax payments and receipts.

Current wording

The decrease in net cash provided by operating activities during the nine months ended December 31, 2025, compared to the prior period, was due to $87,605 of unfavorable changes in operating assets and liabilities partially offset by $56,203 of favorable net income after non-cash adjustments. Changes in operating assets and liabilities were primarily due to unfavorable impacts from (1) timing of derivative contract cash settlements recorded to prepaid expenses and other current assets; (2) higher cost and earlier purchases of inventory to support elevated demand for our products, particularly in international regions, as well as the transition to our European 3PL; (3) net trade accounts payable from timing of receipts of goods and services and related disbursements, including freight; and (4) deposits for new retail stores recorded in other assets; partially offset by favorable impacts from (5) timing of tax payments and receipts.