DECKERS OUTDOOR CORP

Note 1. General

The Company. Deckers Outdoor Corporation andits consolidated subsidiaries (collectively, the Company) is a

global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories developed for

both everyday casual lifestyle use and high-performance activities. The Company markets its products primarily

under three proprietary brands: HOKA, UGG, and Teva.

The Company’s brands compete across the fashion and casual lifestyle, performance, running, and outdoor

markets. The Company sells its products through quality domestic and international retailers and international

distributors in its wholesale channel, and directly to global consumers through its Direct-to-Consumer (DTC)

channel, which is comprised of an e-commerce and retail store presence. Management seeks to differentiate the

Company’s 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 the Company’s products (independent manufacturers).

Basis of Presentation. The unaudited condensed consolidated financial statements and accompanying notes

thereto (referred to herein ascondensed consolidated financial statements)as of June 30, 2026, and for thethree

months ended June 30, 2026 (current period), and 2025 (prior period) are prepared in accordance with generally

accepted accounting principles in the US (US GAAP) for interim financial information pursuant to Rule 10-01 of

Regulation S-X issued by the SEC. Accordingly, thecondensed consolidated financial statements do not include all

the information and disclosures required by US GAAP for annual financial statements and accompanying notes

thereto. Thecondensed consolidated balance sheet as of March 31, 2026, is derived from the Company’s audited

consolidated financial statements. In the opinion of management, thecondensed consolidated financial statements

include all normal and recurring entries necessary to fairly present the results of the interim periods presented but

are not necessarily indicative of actual results to be achieved for full fiscal years or other interim periods. The

condensed consolidated financial statements should be read in conjunction with the audited consolidated financial

statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal

year ended March 31, 2026 (prior fiscal year), which was filed with the SEC on May 22, 2026 (2026 Annual Report).

Consolidation. Thecondensed consolidated financial statements include the accounts of the Company and its

wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Reportable Operating Segments. As of June 30, 2026, the Company’sthree reportable operating segments include

the worldwide operations of the HOKA brand, UGG brand, and Other brands (primarily consisting of the Teva brand)

(collectively, the Company’sreportable operating segments). The Other brands reportable operating segment

includes historical results of brands for which standalone operations have been phased out in theprior fiscal year as

described in Note 1, “General,” within the section titled “Reportable Operating Segments” in the Company’s

consolidated financial statements in Part IV of the 2026 Annual Report.

Refer to Note 10, “Reportable Operating Segments,” for further information on the Company’sreportable operating

segments.

Use of Estimates. The preparation of the Company’scondensed 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 its business and

results of operations, including inflationary pressures, increased tariffs, the potential for refunds of previously paid

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, including

the amount, timing, and realization of any tariff refunds, is unknown, the Company believes it has made appropriate

accounting estimates and assumptions based on the facts and circumstances available as of the reporting date.

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However, actual results could differ materially from these estimates and assumptions, which may result in material

effects on the Company’s financial condition, results of operations, and liquidity. Refer to Note 1, “General,” in the

Company’s consolidated financial statements in Part IV of the 2026 Annual Report for further information on the

significant areas requiring the use of management estimates and assumptions.

Foreign Currency Translation. The Company considers the US dollar to be its functional currency. The Company’s

wholly owned foreign subsidiaries have various assets and liabilities, primarily cash, receivables, and payables,

which are denominated in currencies other than its functional currency. The Company remeasures these monetary

assets and liabilities using the exchange rate at the end of the reporting period, which results in gains and losses

that are recorded in selling, general, and administrative (SG&A) expenses in thecondensed consolidated

statements of comprehensive income as incurred. In addition, the Company translates assets and liabilities of

subsidiaries with reporting currencies other than US dollars into US dollars using the exchange rates at the end of

the reporting period, which results in financial statement translation gains and losses recorded in other

comprehensive income or loss (OCI), net of tax, in thecondensed consolidated statements of comprehensive

income.

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

aggregate net sales, the impacts of seasonality have been partially mitigated as HOKA brand sales are generally

more evenly distributed throughout the fiscal year. However, quarterly results may fluctuate based on, among other

things, the timing of product launches, customer demand, inventory management decisions, and the timing of

product shipments, including impacts from changes in third-party logistics providers and other distribution network

initiatives. This trend is expected to continue. In addition, the Company has further mitigated the impacts of

seasonality by diversifying and expanding its year-round product offerings across its brands.

Recent Accounting Pronouncements. Other than outlined below, there have been no developments with respect

to recently issued accounting standards (ASUs) relative to those disclosed in the 2026 Annual Report, including the

expected dates of adoption and impact on disclosures in the Company’s annual consolidated financial statements

and interim condensed consolidated financial statements.

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