10-K – 2026-05-22 – deck-20260331.htm

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 o f year-round product offerings .
• Net sales of the Other brands decreased primarily due to lower domestic net sales in the whole sale
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 g lobal 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. T he 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 DC s. 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 DC s.
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 margin s 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 margin s 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 margin s 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 margin s 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 DC s, 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 DC s.
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 . T he 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.
F urthermore, 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. I ncurring

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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 , r espectively, 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. W e 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.

C ritical Accounting Estimates

The p reparation 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.
A lthough 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.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK

In the normal course of business, our financial condition and results of operations are subject to a variety of market
risks, including those associated with commodity prices ; foreign currency exchange rates; and inflation, and, to a
lesser extent, interest rates and credit risks. We regularly assess these risks and have established policies and
business practices designed to mitigate their effects. There have been no material changes in our primary risk
exposures or management of market risks since the prior year.
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 ethylene-vinyl acetate (sugarcane-derived EVA )
(collectively, commodities ). The supply of sheepskin, which is used to manufacture a significant portion of our UGG
brand products, is in high demand and there are limited suppliers that are able to provide the quantity and quality of
sheepskin that we require. To manage price volatility and ensure availability for our commodities , we currently enter
into fixed purchasing contracts with designated suppliers of sheepskin and 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 . In the event of significant price
increases for our commodities , we will likely not be able to adjust our selling prices sufficiently to eliminate the
impact of such increases on our profitability. We continue to evaluate our fixed pricing agreement strategy for our
commodities .
R efer to Note 8, “Commitments and Contingencies,” of our consolidated financial statements in Part IV within this
Annual Report for further information on purchase obligations for commodities.
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.
We are exposed to financial statement transaction gains and losses as a result of remeasuring our monetary assets
and liabilities that are denominated in currencies other than our subsidiaries’ functional currencies. We hedge
certain foreign currency exchange rate risks arising from existing assets and liabilities, as well as forecasted sales.
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.

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Foreign currency exchange rate fluctuations affect our results of operations and can make comparisons from year to
year more difficul t.   F oreign currency exchange rates at the end of the reporting period used to remeasure monetary
assets and liabilities (excluding the effect from derivative instruments) had a positive but immaterial impact on our
income from operations for the year ended March 31, 2026 .
We use a sensitivity analysis technique to evaluate the effect that changes in the market value of foreign exchange
currencies will have on our forward foreign exchange contracts. As of March 31, 2026 , a hypothetical 10% foreign
currency exchange rate fluctuation would have caused the fair value of our financial instruments on our
consolidated balance sheets to change by approximately $34,500 . As of March 31, 2026 , there are no known
factors that we expect to result in a material change in the near-term in the general nature of our primary foreign
currency exchange rate risk exposure . Refer to the section titled “Summary of Significant Accounting Policies” in
Note 1, “General,” and Note 10, “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.
We do not, and do not intend to, engage in the practice of trading forward foreign currency exchange rate derivative
securities for profit.
Inflation Risk

Inflationary pressures, including higher supply chain, labor and overhead, and raw material costs, may adversely
affect our financial condition and operating results unless we are able to offset these increases through strategic
product price increases, negotiating cost-sharing arrangements with suppliers, or generating operating cost
efficiencies. Inflation could also reduce consumer confidence and discretionary spending, which could negatively
impact the demand for our products.
Interest Rate Risk

Our exposure to market risk for interest rates primarily relates to our cash and cash equivalents balances, and our
revolving credit facilities.
As of March 31, 2026 , we had a cash and cash equivalents balance of $1,907,249 . Our cash and cash equivalents
balances include cash on hand, demand deposits, and other highly liquid investments, such as money-market
funds, with an original maturity of three months or less. Cash and cash equivalents held by us are affected by
variable, short-term, market interest rates. Interest rates fluctuate as a result of many factors, including
governmental monetary policies, domestic and international economic and political considerations, and other factors
that are beyond our control. Using our average invested cash equivalents balance for the year ended March 31,
2026 , the hypothetical effect of a 100 basis point change in applicable interest rates would result in a change of
approximately $16,300 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.
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.
Because our revolving credit facilities bear interest at variable, short-term rates we are exposed to changes in
market interest rates that could impact the cost of servicing debt. As there were no outstanding balances under our
revolving credit facilities as of March 31, 2026 , a 100 basis point change in applicable interest rates would have
resulted in no change to interest expense recorded in our consolidated statements of comprehensive income during
the year ended March 31, 2026 . 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.
We do not, and do not intend to, engage in any interest rate hedging activity. We also do not, and do not intend to,
engage in the practice o f trading interest rate derivative securities for profi t.

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Credit Risk

We have cash on deposit with various large, reputable financial institutions and have invested in highly rated money
market funds. The amount of cash and cash equivalents held with certain financial institutions exceeds government‐
insured limits, and we may purchase investments not guaranteed by the government. Accordingly, there is a risk
that we will not recover the full principal of our investments or that their liquidity may be diminished.
We are also exposed to credit‐related losses in the event of nonperformance by the financial institutions that are
counterparties to our forward currency exchange rate forward contracts. The credit risk amount is our unrealized
gains on our derivative instruments, based on foreign currency exchange rates at the time of nonperformance.
To mitigate our credit risk, we have adopted the global investment policy and the foreign exchange risk
management policy that emphasizes preservation of principal and liquidity. Consistent with these policies, we seek
to enter into transactions with creditworthy and reputable financial institutions, by monitoring their credit standing,
and by limiting exposure to any one counterparty. We have not experienced material credit losses, and do not
believe our credit risk exposure is significant.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Consolidated Financial Statements , the Financial Statement Schedule, and the Reports of Independent
Registered Public Accounting Firm, are filed in a separate section following Part IV , as shown on the index under
Item 15, “Exhibits and Financial Statement Schedules,” within this Annual Report .

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain a system of disclosure controls and procedures, as defined in Rule 13a-15(e) under the Exchange Act ,
which are designed to provide reasonable assurance that information required to be disclosed in the reports that we
file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods
specified in the SEC ’s rules and forms. Our disclosure controls and procedures also include controls and
procedures designed to reasonably ensure that such information is accumulated and communicated to
management, including our Principal Executive Officer ( PEO ) and Principal Financial and Accounting Officer
( PFAO ), as appropriate, to allow timely decisions regarding required disclosure.
In designing and evaluating our disclosure controls and procedures, our management recognized that any system
of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives and management necessarily is required to apply its judgment in evaluating
the cost-benefit relationship of possible controls and procedures. In addition, the design of any system of controls is
based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that
any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may
become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may
deteriorate. Because of the inherent limitations in any system of controls, misstatements due to error or fraud may
occur and not be detected, and controls may be circumvented or overridden.
Under the supervision and with the participation of management, we conducted an evaluation of the effectiveness of
the design and operation of our disclosure controls and procedures as of March 31, 2026 . Based on that evaluation,
our PEO and PFAO concluded that our disclosure controls and procedures are effective at a reasonable assurance
level as of March 31, 2026 .

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Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as
defined in Rule 13a-15(f) under the Exchange Act ). Our internal control over financial reporting is a process
designed by, or under the supervision of, our PEO and PFAO to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of our financial statements for external reporting purposes in
accordance with US GAAP . Our internal control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and
dispositions of assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with US GAAP, and that our receipts and expenditures are being
made only in accordance with authorizations of our management and directors; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that
could have a material effect on our financial statements. Because of inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to
future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
As of March 31, 2026 , our management, including our PEO and PFAO , assessed the effectiveness of our internal
control over financial reporting using the criteria set forth in Internal Control — Integrated Framework (2013) issued
by the Committee of Sponsoring Organizations of the Treadway Commission (commonly referred to as COSO ).
Based on this assessment, our management concluded that our internal control over financial reporting was
effective based on these criteria . The registered public accounting firm that audited our consolidated financial
statements in Part IV within this Annual Report has issued an attestation report on our internal control over financial
reporting. Refer to Part IV , “Report of Independent Registered Public Accounting Firm - Internal Control Over
Financial Reporting,” within this Annual Report .
Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in management’s evaluation
pursuant to Rule 13a-15(d) of the Exchange Act during the three months ended March 31, 2026 , that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PEO and PFAO Certifications

The certifications of our PEO and PFAO required by Rule 13a-14(a) of the Exchange Act , adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (“SOX”), are filed as Exhibit 31.1 and Exhibit 31.2, and the
certifications required by 18 U.S.C. Section 1350, adopted pursuant to Section 906 of SOX, are furnished as Exhibit
32.1, to this Annual Report . This Part II, Item 9A, should be read in conjunction with such certifications for a more
complete understanding of the topics presented.

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ITEM 9B. OTHER INFORMATION

Director and Executive Officer Trading Plans and Arrangements

Our directors and executive officers may enter into trading plans or other arrangements with financial institutions to
purchase or sell shares of our common stock. These plans or arrangements may constitute Rule 10b5-1 trading
arrangements or non-Rule 10b5-1 trading arrangements, in each case as defined under Item 408(a) of Regulation
S-K.
Set forth below is a summary of the adoption , modification, and termination activity of our directors and executive
officers with respect to Rule 10b5-1 trading plans during the three months ended March 31, 2026 :

Name & Title

Adoption Date

Termination Date

Contract End Date

Aggregate
Shares Covered
(in ones) (1)

Steven Fasching ,
Chief Financial Officer

February 23, 2026

*

May 31, 2027

16,181

Bonita Stewart ,
Director

February 14, 2026

*

May 28, 2027

9,000

*Not applicable.
(1) The actual number of shares sold under the plan may depend on the vesting of certain performance-based equity awards and
the number of shares withheld by us to satisfy our income tax withholding obligations and may vary from the number provided
herein.
During the three months ended March 31, 2026 , no non-Rule 10b5-1 trading arrangements were adopted , modified,
or terminated by our directors or executive officers.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The information required by this item will be disclosed in our definitive proxy statement on Schedule 14A ( Proxy
Statement ) for our 2026 annual meeting of stockholders and is incorporated herein by reference. Our Proxy
Statement will be filed with the SEC within 120 days after the end of the year ended March 31, 2026 , pursuant to
Regulation 14A under the Exchange Act .

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item will be disclosed in the Proxy Statement and is incorporated herein by
reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item will be disclosed in the Proxy Statement and is incorporated herein by
reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE

The information required by this item will be disclosed in the Proxy Statement and is incorporated herein by
reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item will be disclosed in the Proxy Statement and is incorporated herein by
reference.

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Refer to Part IV , “Index to Consolidated Financial Statements and Financial Statement Schedules,” on page F-1
within this Annual Report for our Consolidated Financial Statements and the Reports of Independent Registered
Public Accounting Firm .
EXHIBIT INDEX

Exhibit
Number

Description of Exhibit

3.1

Amended and Restated Certificate of Incorporation of Deckers Outdoor Corporation, as amended
through September 13, 2024 (Exhibit 3.1 to the Registrant’s Form 10-Q filed on October 31, 2024,
and incorporated by reference herein)

3.2

Amended and Restated By laws of Deckers Outdoor Corporation, as amended through September
9, 2024 (Exhibit 3.2 to the Registrant’s Form 10-Q filed on October 31, 2024, and incorporated by
reference herein)

4.1

Description of the Capital Stock of Deckers Outdoor Corporation (Exhibit 4.1 to the Registrant’s
Form 10-K filed on May 23, 2025, and incorporated by reference herein)

10.1

Credit Agreement, dated December 19, 2022, by and among Deckers Outdoor Corporation,
Deckers Europe Limited, Deckers UK Ltd., Deckers Benelux B.V., Deckers Outdoor Canada ULC,
Deckers Outdoor International Limited, Deckers Coromar, LLC, DBrands SGP Pte. Ltd., Citibank,
N.A., as administrative agent, joint lead arranger and joint bookrunner, Comerica Bank, as sole
syndication agent, joint lead arranger and joint bookrunner, HSBC Bank USA, National Association,
as joint lead arranger and joint bookrunner, and the lenders party thereto (Exhibit 10.1 to the
Registrant’s Form 8-K filed on December 21, 2022, and incorporated by reference herein)

†10.2

Standard Industrial Lease (Net), dated December 5, 2013, by and between Moreno Knox, LLC, and
Deckers Outdoor Corporation for distribution center at 17791 Perris Blvd., Moreno Valley, CA 92551
(Exhibit 10.6 to the Registrant’s Form 10-K filed on March 3, 2014, and incorporated by reference
herein)

†10.3

First Amendment to Standard Industrial Lease (Net), dated June 6, 2017, by and between Moreno
Knox, LLC, and Deckers Outdoor Corporation for distribution center at 17791 Perris Blvd., Moreno
Valley, CA 92551 (Exhibit 10.6 to the Registrant’s Form 10-K filed on May 30, 2018, and
incorporated by reference herein)

10.4

Second Amendment to Standard Industrial Lease (Net), dated July 17, 2017, by and between
Moreno Knox, LLC, and Deckers Outdoor Corporation for distribution center at 17791 Perris Blvd.,
Moreno Valley, CA 92551 (Exhibit 10.7 to the Registrant’s Form 10-K filed on May 30, 2018, and
incorporated by reference herein)

†10.5

Standard Industrial Lease (Net), dated February 10, 2021, by and between Westpoint Building II,
LLC and Deckers Outdoor Corporation for distribution center at 2633 Westpoint Blvd., Mooresville,
IN 46158 (Exhibit 10.4 to the Registrant’s Form 10-K filed on May 28, 2021, and incorporated by
reference herein)

†10.6

Standard Industrial Lease (Net), dated April 20, 2022, by and between Westpoint Building V, LLC,
and Deckers Outdoor Corporation for distribution center at 2723 Westpoint Blvd., Mooresville, IN
46158 (Exhibit 10.5 to the Registrant’s Form 10-K filed on May 27, 2022, and incorporated by
reference herein)

#10.7

Form of Indemnification Agreement (Exhibit 10.1 to the Registrant’s Form 8-K filed on June 2, 2008,
and incorporated by reference herein)

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Exhibit
Number

Description of Exhibit

#10.8

Form of Change in Control and Severance Agreement (Exhibit 10.1 to the Registrant’s Form 10-Q
filed on August 1, 2024, and incorporated by reference herein)

#10.9

Deckers Outdoor Corporation Second Amended and Restated Deferred Stock Unit Compensation
Plan, effective December 16, 2015 (Exhibit 10.1 to the Registrant’s Form 10-Q filed on November 9,
2017, and incorporated by reference herein)

#10.10

Deckers Outdoor Corporation Deferred Stock Unit Compensation Plan, effective September 9, 2024
(Exhibit 10.12 to the Registrant’s Form 10-K filed on May 23, 2025, and incorporated by reference
herein)

#10.11

Deckers Outdoor Corporation Amended and Restated Deferred Compensation Plan, effective July
1, 2016 (Exhibit 10.2 to the Registrant’s Form 10-Q filed on November 9, 2017, and incorporated by
reference herein)

#10.12

Deckers Outdoor Corporation Management Incentive Plan (Exhibit 10.1 to the Registrant’s Form
10-Q filed on August 10, 2015, and incorporated by reference herein)

#10.13

Deckers Outdoor Corporation 2024 Employee Stock Purchase Plan (Appendix A to the Registrant's
Definitive Proxy Statement filed on July 23, 2024, and incorporated by reference herein)

#10.14

Deckers Outdoor Corporation 2015 Stock Incentive Plan (Appendix B to the Registrant's Definitive
Proxy Statement filed on July 29, 2015, and incorporated by reference herein)

#10.15

Deckers Outdoor Corporation 2024 Stock Incentive Plan (Appendix B to the Registrant's Definitive
Proxy Statement filed on July 23, 2024, and incorporated by reference herein)

#10.16

Form of Stock Unit Award Agreement (2024 Time-Based RSU) under Deckers Outdoor Corporation
2015 Stock Incentive Plan (Exhibit 10.23 to the Registrant’s Form 10-K filed on May 24, 2024, and
incorporated by reference herein)

†#10.17

Form of Restricted Stock Unit Award Agreement under Deckers Outdoor Corporation 2015 Stock
Incentive Plan FY 2024 LTIP Financial Performance Award (Exhibit 10.24 to the Registrant’s Form
10-K filed on May 24, 2024, and incorporated by reference herein)

#10.18

Form of Stock Unit Award Agreement (2025 Time-Based RSU) under Deckers Outdoor Corporation
2015 Stock Incentive Plan (Exhibit 10.22 to the Registrant’s Form 10-K filed on May 23, 2025, and
incorporated by reference herein)

†#10.19

Form of Restricted Stock Unit Award Agreement under Deckers Outdoor Corporation 2015 Stock
Incentive Plan FY 2025 LTIP Financial Performance Award (Exhibit 10.23 to the Registrant’s Form
10-K filed on May 23, 2025, and incorporated by reference herein)

#10.20

Form of Stock Unit Award Agreement (Time-Based RSU) under Deckers Outdoor Corporation 2024
Stock Incentive Plan (Exhibit 10.24 to the Registrant’s Form 10-K filed on May 23, 2025, and
incorporated by reference herein)

†#10.21

Form of Restricted Stock Unit Award Agreement under Deckers Outdoor Corporation 2024 Stock
Incentive Plan - LTIP Financial Performance Award (Exhibit 10.25 to the Registrant’s Form 10-K filed
on May 23, 2025, and incorporated by reference herein)

19.1

Insider Trading Policy (Exhibit 19.1 to the Registrant’s Form 10-K filed on May 24, 2024, and
incorporated by reference herein)

*21.1

Subsidiaries of Registrant

*23.1

Consent of Independent Registered Public Accounting Firm

*24.1

Power of Attorney (included on the Signatures page of this Annual Report on Form 10-K)

*31.1

Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) under the Exchange Act,
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended

*31.2

Certification of the Principal Financial and Accounting Officer pursuant to Rule 13a-14(a) under the
Exchange Act, adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended

**32.1

Certification of the Principal Executive Officer and the Principal Financial and Accounting Officer
pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, as amended

97.1

Clawback and Forfeiture Policy (Exhibit 97.1 to the Registrant’s Form 10-K filed on May 24, 2024,
and incorporated by reference herein)

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Exhibit
Number

Description of Exhibit

*101.INS

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File
because its XBRL tags are embedded within the Inline XBRL document)

*101.SCH

Inline XBRL Taxonomy Extension Schema Document

*101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

*101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

*101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

*101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

*104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.
** Furnished herewith.
# Management contract or compensatory plan or arrangement.
† Certain of the schedules (and similar attachments) to this exhibit have been omitted in accordance with Item
601(a)(5) of Regulation S-K. A copy of any omitted schedule (or similar attachment) will be furnished to the
Securities and Exchange Commission upon request.

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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DECKERS OUTDOOR CORPORATION (Registrant)

/s/ STEVEN J. FASCHING

Steven J. Fasching
Chief Financial Officer
(Principal Financial and Accounting Officer)

Date: May 22, 2026
Power of Attorney
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and
appoints Stefano Caroti and Steven J. Fasching, jointly and severally, his or her attorneys-in-fact, each with the
power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on
Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ STEFANO CAROTI

Chief Executive Officer, President, and Director
(Principal Executive Officer)

May 22, 2026

Stefano Caroti

/s/ STEVEN J. FASCHING

Chief Financial Officer
(Principal Financial and Accounting Officer)

May 22, 2026

Steven J. Fasching

/s/ CYNTHIA (CINDY) L. DAVIS

Chair of the Board

May 22, 2026

Cynthia (Cindy) L. Davis

/s/ DAVID A. BURWICK

Director

May 22, 2026

David A. Burwick

/s/ NELSON C. CHAN

Director

May 22, 2026

Nelson C. Chan

/s/ JUAN R. FIGUEREO

Director

May 22, 2026

Juan R. Figuereo

/s/ PATRICK J. GRISMER

Director

May 22, 2026

Patrick J. Grismer

/s/ MAHA S. IBRAHIM

Director

May 22, 2026

Maha S. Ibrahim

/s/ VICTOR LUIS

Director

May 22, 2026

Victor Luis

/s/ LAURI M. SHANAHAN

Director

May 22, 2026

Lauri M. Shanahan

/s/ BONITA C. STEWART

Director

May 22, 2026

Bonita C. Stewart

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DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES

Page

Consolidated Financial Statements:

Report of Independent Registered Public Accounting Firm - Consolidated Financial Statements
( KPMG LLP , Los Angeles, CA , Auditor Firm ID: 185 )

F- 2

Report of Independent Registered Public Accounting Firm - Internal Control Over Financial Reporting
( KPMG LLP , Los Angeles, CA , Auditor Firm ID: 185 )

F- 4

Consolidated Balance Sheets

F- 5

Consolidated Statements of Comprehensive Income

F- 6

Consolidated Statements of Stockholders’ Equity

F- 7

Consolidated Statements of Cash Flows

F- 8

Notes to Consolidated Financial Statements

F- 10

Consolidated Financial Statement Schedule:

Schedule II - Total Valuation and Qualifying Accounts

F- 41

All other schedules are omitted because they are not applicable, or the required information is shown in the
consolidated financial statements or accompanying notes thereto .

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors
Deckers Outdoor Corporation:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Deckers Outdoor Corporation and subsidiaries (the
Company) as of March 31, 2026 , and 2025 , the related consolidated statements of comprehensive income , stockholders’
equity, and cash flows for each of the years in the three-year period ended March 31, 2026 , and the related notes and
financial statement schedule (collectively, the consolidated financial statements ). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the Company as of March 31, 2026 , and 2025 ,
and the results of its operations and its cash flows for each of the years in the three-year period ended March 31, 2026 , in
conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) ( PCAOB ), the Company’s internal control over financial reporting as of March 31, 2026 , based on criteria
established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of
the Treadway Commission, and our report dated May 22, 2026 expressed an unqualified opinion on the effectiveness of
the Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB .
We conducted our audits in accordance with the standards of the PCAOB . Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the consolidated financial statements , whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the consolidated financial statements . Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements . We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit and risk management committee and
that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our
especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in
any way our opinion on the consolidated financial statements , taken as a whole, and we are not, by communicating the
critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to
which it relates.
Wholesale sales return liability
As discussed in Note 1 and Note 2 to the consolidated financial statements , the Company has recorded a sales
return liability as of March 31, 2026 , of $80,055 , of which $63,907 is rela ted to the wholesale channel. The Company
records an allowance for anticipated future returns of goods shipped prior to the end of the reporting period. Amounts
of these reserves are based on known and actual returns, historical returns, and any recent events that could result
in a change from historical return rates.
We identified the evaluation of the wholesale sales return liability as a critical audit matter. There was a high degree
of auditor judgment required to evaluate recent events that could result in a change from historical return rates used
to estimate the wholesale sales return liability.

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Report of Independent Registered Public Accounting Firm

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design
and tested the operating effectiveness of certain internal controls related to the Company’s process for estimating
the wholesale sales return liability, including controls related to the development of estimated return rates. We
evaluated the wholesale sales return liability using a combination of Company internal data, known recent trends,
and actual and historical known information. We analyzed the Company’s internal data and external correspondence
to assess adjustments made by management, if any, to historical return rates based on consideration of recent
events. We assessed the Company’s ability to accurately estimate the wholesale sales return liability by comparing
the historically recorded sales return liability to actual subsequent product returns. We also analyzed actual product
returns received after year-end but prior to the issuance of the consolidated financial statements .
/s/ KPMG LLP
We have served as the Company’s auditor since 1992.
Los Angeles, California
May 22, 2026

Table of Contents                                                                                                                                                     F-4

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors
Deckers Outdoor Corporation:
Opinion on Internal Control Over Financial Reporting
We have audited Deckers Outdoor Corporation and subsidiaries’ (the Company) internal control over financial reporting as
of March 31, 2026 , based on criteria established in Internal Control – Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all
material respects, effective internal control over financial reporting as of March 31, 2026 , based on criteria established in
Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) ( PCAOB ), the consolidated balance sheets of the Company as of March 31, 2026 and 2025 , the related
consolidated statements of comprehensive income , stockholders’ equity, and cash flows for each of the years in the three-
year period ended March 31, 2026 , and the related notes and financial statement schedule (collectively, the consolidated
financial statements ), and our report dated May 22, 2026 expressed an unqualified opinion on those consolidated financial
statements .
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s
Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal
control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB .
We conducted our audit in accordance with the standards of the PCAOB . Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing
and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also
included performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the
financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
/s/ KPMG LLP
Los Angeles, California
May 22, 2026

Table of Contents                                                                                                                                                     F-5

DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except par value)

As of March 31,

2026

2025

ASSETS

Cash and cash equivalents

$ 1,907,249

$ 1,889,188

Trade accounts receivable, net of allowances ( $ 38,198 and $ 32,883 as of
March 31, 2026 , and March 31, 2025 , respectively) ( Note   2 and Schedule   II )

318,978

332,872

Inventories

487,018

495,226

Prepaid expenses

53,236

39,294

Other current assets

82,114

67,282

Income tax receivable

1,825

36,613

Total current assets

2,850,420

2,860,475

Property and equipment, net of accumulated depreciation ( $ 457,173 and
$ 402,964 as of March 31, 2026 , and March 31, 2025 , respectively) ( Note   3 )

337,782

325,599

Operating lease assets

335,098

237,352

Goodwill ( Note   1 )

13,990

13,990

Other intangible assets, net of accumulated amortization ( $ 20,968 and $ 25,014
as of March 31, 2026 , and March 31, 2025 , respectively) ( Note   1 )

15,643

15,699

Deferred tax assets, net ( Note   5 )

68,501

77,591

Other assets

66,331

39,546

Total assets

$ 3,687,765

$ 3,570,252

LIABILITIES AND STOCKHOLDERS’ EQUITY

Trade accounts payable

$ 384,529

$ 417,955

Accrued payroll

119,597

125,417

Operating lease liabilities ( Note   7 )

83,931

54,453

Other accrued expenses

171,173

142,120

Income tax payable

36,475

23,299

Value added tax payable

8,369

6,697

Total current liabilities

804,074

769,941

Long-term operating lease liabilities ( Note   7 )

291,263

222,522

Income tax liability

26,313

13,587

Other long-term liabilities

66,477

51,189

Total long-term liabilities

384,053

287,298

Commitments and contingencies ( Note   8 )

Stockholders’ equity

Common stock ( $ 0.01 par value per share; 750,000 shares authorized; 139,978
and 150,201 shares issued and outstanding as of March 31, 2026 , and
March 31, 2025 , respectively)

1,400

1,502

Additional paid-in capital

287,795

253,466

Retained earnings

2,246,362

2,307,699

Accumulated other comprehensive loss ( Note   11 )

( 35,919 )

( 49,654 )

Total stockholders’ equity

2,499,638

2,513,013

Total liabilities and stockholders’ equity

$ 3,687,765

$ 3,570,252

See accompanying notes to the consolidated financial statements .

Table of Contents                                                                                                                                                     F-6

DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(amounts in thousands, except per share data)

Years Ended March 31,

2026

2025

2024

Net sales ( Note 2 and Note   13 )

$ 5,472,296

$ 4,985,612

$ 4,287,763

Cost of sales

2,314,570

2,099,949

1,902,275

Gross profit

3,157,726

2,885,663

2,385,488

Selling, general, and administrative expenses ( Note   13 )

1,894,823

1,706,571

1,457,974

Income from operations ( Note   13 )

1,262,903

1,179,092

927,514

Interest income

( 63,613 )

( 68,389 )

( 52,208 )

Interest expense

2,530

3,517

2,564

Other (income) expense, net

( 2,370 )

665

( 1,783 )

Total other income, net

( 63,453 )

( 64,207 )

( 51,427 )

Income before income taxes

1,326,356

1,243,299

978,941

Income tax expense ( Note   5 )

302,285

277,208

219,378

Net income

1,024,071

966,091

759,563

Other comprehensive income (loss), net of tax

Unrealized gain on cash flow hedges

3,980

1,584

—

Foreign currency translation gain (loss)

9,755

( 505 )

( 11,698 )

Total other comprehensive income (loss), net of tax

13,735

1,079

( 11,698 )

Comprehensive income

$ 1,037,806

$ 967,170

$ 747,865

Net income per share

Basic

$ 7.04

$ 6.36

$ 4.89

Diluted

$ 7.02

$ 6.33

$ 4.86

Weighted-average common shares outstanding ( Note   12 )

Basic

145,498

151,992

155,225

Diluted

145,805

152,670

156,285

See accompanying notes to the consolidated financial statements .

Table of Contents                                                                                                                                                     F-7

DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(amounts in thousands)

Common Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Total
Stockholders’
Equity

Shares

Amount

Balance, March 31, 2023

157,054

$ 1,571

$ 230,841

$ 1,572,356

$ ( 39,035 )

$ 1,765,733

Stock-based compensation

12

—

37,248

—

—

37,248

Shares issued upon vesting

351

4

2,440

—

—

2,444

Exercise of stock options

426

4

4,782

—

—

4,786

Shares withheld for taxes

—

—

( 32,261 )

—

—

( 32,261 )

Repurchases of common
stock ( Note   11 )

( 4,289 )

( 43 )

—

( 414,888 )

—

( 414,931 )

Excise taxes related to
repurchases of common
stock

—

—

—

( 3,416 )

—

( 3,416 )

Net income

—

—

—

759,563

—

759,563

Total other comprehensive
loss

—

—

—

—

( 11,698 )

( 11,698 )

Balance, March 31, 2024

153,554

1,536

243,050

1,913,615

( 50,733 )

2,107,468

Stock-based compensation

11

—

37,915

—

—

37,915

Shares issued upon vesting

347

3

3,801

—

—

3,804

Exercise of stock options

89

1

967

—

—

968

Shares withheld for taxes

—

—

( 32,267 )

—

—

( 32,267 )

Repurchases of common
stock ( Note   11 )

( 3,800 )

( 38 )

—

( 566,964 )

—

( 567,002 )

Excise taxes related to
repurchases of common
stock

—

—

—

( 5,043 )

—

( 5,043 )

Net income

—

—

—

966,091

—

966,091

Total other comprehensive
income

—

—

—

—

1,079

1,079

Balance, March 31, 2025

150,201

1,502

253,466

2,307,699

( 49,654 )

2,513,013

Stock-based compensation

16

—

44,835

—

—

44,835

Shares issued upon vesting

257

3

4,506

—

—

4,509

Shares withheld for taxes

—

—

( 15,012 )

—

—

( 15,012 )

Repurchases of common
stock ( Note   11 )

( 10,496 )

( 105 )

—

( 1,074,995 )

—

( 1,075,100 )

Excise taxes related to
repurchases of common
stock

—

—

—

( 10,413 )

—

( 10,413 )

Net income

—

—

—

1,024,071

—

1,024,071

Total other comprehensive
income

—

—

—

—

13,735

13,735

Balance, March 31, 2026

139,978

$ 1,400

$ 287,795

$ 2,246,362

$ ( 35,919 )

$ 2,499,638

See accompanying notes to the consolidated financial statements .

Table of Contents                                                                                                                                                     F-8

DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)

Years Ended March 31,

2026

2025

2024

OPERATING ACTIVITIES

Net income

$ 1,024,071

$ 966,091

$ 759,563

Reconciliation of net income to net cash provided by (used in) operating activities:

Depreciation, amortization, and accretion

75,773

69,353

57,587

Amortization on cloud computing arrangements

2,236

2,380

2,075

Bad debt expense

6,345

5,032

789

Deferred tax expense (benefit)

8,784

( 5,545 )

( 1,510 )

Stock-based compensation

44,835

37,943

37,288

Loss on disposal of assets

1,191

3,183

407

Impairment of intangible assets

—

—

8,164

Impairment of property and equipment and cloud computing
arrangements

127

4,290

1,015

Changes in operating assets and liabilities:

Trade accounts receivable, net

7,550

( 41,339 )

4,157

Inventories

8,208

( 24,344 )

58,541

Prepaid expenses and other current assets

( 23,804 )

20,946

( 38,490 )

Income tax receivable

34,788

6,945

( 38,775 )

Net operating lease assets and lease liabilities

( 10 )

( 2,583 )

( 567 )

Other assets

( 28,832 )

6,566

( 9,989 )

Trade accounts payable

( 27,865 )

35,636

119,601

Other accrued expenses

16,933

22,222

43,534

Income tax payable

13,175

( 29,039 )

35,016

Other long-term liabilities

18,450

( 33,214 )

( 5,222 )

Net cash provided by operating activities

1,181,955

1,044,523

1,033,184

INVESTING ACTIVITIES

Purchases of property and equipment

( 84,623 )

( 86,171 )

( 89,365 )

Proceeds from sale of assets

11

11,168

34

Net cash used in investing activities

( 84,612 )

( 75,003 )

( 89,331 )

FINANCING ACTIVITIES

Proceeds from issuance of stock

4,509

3,804

2,444

Proceeds from exercise of stock options

—

968

4,786

Repurchases of common stock

( 1,075,100 )

( 567,002 )

( 414,931 )

Cash paid for excise taxes related to repurchases of common
stock

( 5,043 )

( 3,985 )

—

Cash paid for shares withheld for taxes

( 8,410 )

( 15,119 )

( 9,974 )

Net cash used in financing activities

( 1,084,044 )

( 581,334 )

( 417,675 )

Effect of foreign currency exchange rates on cash and cash
equivalents

4,762

( 1,049 )

( 5,922 )

Net change in cash and cash equivalents

18,061

387,137

520,256

Cash and cash equivalents at beginning of period

1,889,188

1,502,051

981,795

Cash and cash equivalents at end of period

$ 1,907,249

$ 1,889,188

$ 1,502,051

Table of Contents                                                                                                                                                     F-9

DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(continued)

Years Ended March 31,

2026

2025

2024

SUPPLEMENTAL CASH FLOW DISCLOSURE

Cash paid during the period

Interest

$ 2,492

$ 1,789

$ 1,783

Operating leases

92,823

70,326

65,672

Non-cash investing activities

Changes in trade accounts payable and other accrued
expenses for purchases of property and equipment

( 5,559 )

3,819

( 6,705 )

Accrued for asset retirement obligation assets related to
leasehold improvements

8,464

2,233

2,278

Leasehold improvements acquired through tenant allowances

—

—

8,127

Non-cash financing activities

Accrued for shares withheld for taxes

6,602

17,148

22,287

Accrued excise taxes related to repurchases of common stock

10,413

5,043

3,416

See accompanying notes to the consolidated financial statements .

Table of Contents                                                                                                                                                     F-10

DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

Note 1. General

The Company . Deckers Outdoor Corporation and its wholly owned 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’s three proprietary brands include
the HOKA® ( HOKA ), UGG® ( UGG ), and Teva® ( Teva ) brands . Refer to the section below entitled “Reportable
Operating Segments” for information regarding the phase out of standalone operations for the Koolaburra by UGG®
( Koolaburra ) brand and AHNU® ( AHNU ) brand, and the prior sale of the Sanuk brand.
The Company sell s 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. Independent third-party contractors manufacture all of the
Company’s products.
Basis of Presentation . The consolidated financial statements and accompanying notes thereto (referred to herein
as consolidated financial statements ) as of March 31, 2026 , and 2025 , and for the years ended March 31, 2026 ,
2025 , and 2024 (referred to herein as “yea r ended” or “yea rs ended,” or a s “ fiscal year 2026 ,” “ fiscal year 2025 ,” and
“ fiscal year 2024 ,” respectively) are prepared in accordance with generally accepted accounting principles in the
United States ( US GAAP ).
Consolidation . The 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 March 31, 2026 , the Company’s three 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’s reportable operating segments ). T he Other brands reportable operating
segment includes current and historical results of brands previously sold and brands for which standalone
operations have been phased out, as discussed below.
Consistent with the Company’s continuous focus on pursuing its most profitable long-term opportunities,
management has taken the following strategic actions to streamline its brand portfolio within the Other brands
r eportable operating segment:
• During the second quarter of fiscal year 2026 , the Company began phasing out standalone
operations for the AHNU brand. The Company closed Ahnu.com as of October 1, 2025, and
completed the phase out of the AHNU brand in the wholesale channel during the third and fourth
quarters of fiscal year 2026 . The Company did not incur material exit costs or obligations
associated with this plan.
• During the third quarter of fiscal year 2025 , the Company began phasing out standalone operations
for the Koolaburra brand. The Company closed Koolaburra.com as of the end of fiscal year 2025
and completed the phase out of the Koolaburra brand in the wholesale channel during third and
fourth quarters of fiscal year 2026 . The Company did not incur material exit costs or obligations
associated with this plan.
• The Company completed the sale of the Sanuk brand during the second quarter of fiscal year 2025 .
The financial results for the Company’s reportable operating segments during fiscal year 2025
present the former Sanuk brand through August 15, 2024 ( Sanuk Brand Sale Date ) .
Refer to Note 13, “Reportable Operating Segments,” for further information on the Company’s reportable operating
segments .

Table of Contents                                                                                                                                                     F-11

DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

Use of Estimates . The preparation of the Company’s 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, 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, the Company 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
the Company’s financial condition, results of operations, and liquidity.
Significant accounting policies that require the use of management estimates and assumptions include those
related to revenue recognition such as sales returns, chargebacks, and sales discounts as well as contract
liabilities; accounts receivable allowances; inventory; income taxes including valuation of deferred income taxes;
stock-based compensation; impairment assessments, including for long-lived assets; the fair value of financial
instruments; those related to operating lease assets and lease liabilities including term, classification, and the
Company’s incremental borrowing rate ( IBR ).
Foreign Currency Translation. The Company considers the United States ( 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 the 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 the 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, although quarterly results may fluctuate based on the timing of
product launches. 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 . The Financial Accounting Standards Board has issued Accounting
Standards Updates ( ASU s) that have been adopted and not yet adopted by the Company as stated below.
Recently Adopted. The following is a summary of an ASU adopted by the Company and its impact upon adoption:

Standard

Description

Impact upon Adoption

ASU 2023-09 -
Improvements to
Income Tax
Disclosures ( ASU
2023-09)

This ASU requires annual disclosures of prescribed
standard categories for the components of the effective tax
rate reconciliation, disclosure of income taxes paid
disaggregated by jurisdiction, and other income-tax related
disclosures. This ASU is effective on a prospective basis,
with retrospective application permitted, for fiscal years
beginning after December 15, 2024. Early adoption is
permitted.

The Company prospectively adopted this ASU beginning
with this Annual Report . This ASU did not have a material
impact on the Company’s consolidated financial statements
other than additional disclosures under Note 5 , “ Income
Taxes .”

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DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

Not Yet Adopted. The following is a summary of each ASU that has been issued through May 1, 2026 , and is
applicable to the Company, but which has not yet been adopted, as well as the planned period of adoption, and the
expected impact on the Company upon adoption :

Standard

Description

Planned Period
of Adoption

Expected Impact on Adoption

ASU 2024-03 -
Disaggregation of
Income
Statement
Expenses (as
amended by ASU
2025-01)

This ASU requires disaggregated disclosure of
relevant statement of comprehensive income
expense captions including tabular presentation
of prescribed expense categories such as
purchases of inventory, employee compensation,
depreciation, intangible asset amortization, and
other specific expense, gains, and losses
required by existing US GAAP . This ASU is
effective on a prospective basis, with
retrospective application permitted, for fiscal
years beginning after December 15, 2026, and
interim periods within fiscal years beginning after
December 15, 2027. Early adoption is permitted.

Q4 FY 2028
and
Q1 FY 2029

The Company is currently evaluating the impact
of the adoption of this ASU on its disclosures in
its annual and interim consolidated financial
statements.

ASU 2025-05 -
Measurement of
Credit Losses for
Accounts
Receivable and
Contract Assets

This ASU provides a practical expedient to
assume that current conditions as of the balance
sheet date do not change for the remaining life of
the asset when estimating expected credit losses
on trade accounts receivable and contract
assets. This ASU is effective on a prospective
basis for fiscal years beginning after December
15, 2025. Early adoption is permitted.

Q1 FY 2027

The Company does not expect the adoption of
this ASU to have a material impact on its annual
consolidated financial statements and interim
condensed consolidated financial statements.

ASU 2025-06 -
Internal-Use
Software

This ASU amends recognition and disclosure
guidance for internal-use software costs,
removing the previous software development
stage model with a more principles-based,
probable-to-complete recognition threshold. This
ASU is effective on either a retrospective,
prospective, or modified prospective basis, for
fiscal years beginning after December 15, 2027,
including interim periods within those fiscal
years. Early adoption is permitted.

Q1 FY 2029

The Company is currently evaluating the impact
of the adoption of this ASU on its annual
consolidated financial statements and interim
condensed consolidated financial statements.

ASU 2025-09 -
Derivatives and
Hedging (Topic
815): Hedge
Accounting
Improvements

This ASU clarifies and improves certain aspects
of hedge accounting, including guidance on the
assessment of similar risk exposure for groups of
forecasted transactions related to cash flow
hedges and other targeted amendments
intended to better align hedge accounting with an
entity’s risk management activities. This ASU is
effective on a prospective basis for fiscal years
beginning after December 15, 2026, including
interim periods within those fiscal years. Early
adoption is permitted.

Q1 FY 2028

The Company is currently evaluating the impact
of the adoption of this ASU on its annual
consolidated financial statements and interim
condensed consolidated financial statements.

ASU 2025-11 -
Interim Reporting:
Narrow-Scope
Improvements

This ASU requires disclosure of events since the
most recent annual reporting period that have a
material impact on interim results, provides a
comprehensive list of required interim
disclosures, and clarifies the form and content
requirements for interim financial statements.
This ASU is effective on either a prospective or
retrospective basis for interim periods within
fiscal years beginning after December 15, 2027.
Early adoption is permitted.

Q1 FY 2029

The Company is currently evaluating the impact
of the adoption of this ASU on disclosures in its
interim condensed consolidated financial
statements.

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DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

Summary of Significant Accounting Policies. The following is a summary of the Company’s significant
accounting policies applied to its consolidated financial statements :
Cash and Cash Equivalents . Cash and cash equivalents include cash on hand, demand deposits, and all highly
liquid investments, such as money-market funds, with an original maturity of three months or less. The carrying
value of money-market funds approximates the fair value as it is considered a highly liquid investment when
purchased. Money-market funds are recorded in cash and cash equivalents in the consolidated balance sheets .
Refer to Note 4, “Fair Value Measurements,” for further information on the fair value of money-market funds.
The Company maintains a portion of its cash in Federal Deposit Insurance Corporation insured bank deposit
accounts which, at times, may exceed federally insured limits. T he Company did not experience any losses in such
accounts during the years ended March 31, 2026 , 2025 , and 2024 . Based on the size and strength of the banking
institutions used, the Company does not believe it is exposed to any significant credit risks in cash .
Allowances for Doubtful Accounts . The Company provides an allowance against trade accounts receivable for
estimated losses that may result from customers’ inability to pay. The Company determines the amount of the
allowance by analyzing known uncollectible accounts, aged trade accounts receivable, economic conditions and
forecasts, historical experience, and the customers’ creditworthiness. Trade accounts receivable that are
subsequently determined to be uncollectible are charged or written off against this allowance. The allowance
includes specific allowances for trade accounts, for which all or a portion are identified as potentially uncollectible
based on known or anticipated losses. Additions to the allowance represent bad debt expense estimates which are
recorded in SG&A expenses in the consolidated statements of comprehensive income .
Inventories . Inventories, which are predominantly 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. The
Company regularly reviews inventory for excess, obsolete, and impaired inventory to evaluate write-downs to the
lower of cost or realizable value.
The Company outsources the production of its finished goods to independent third-party contractors that
manufacture all of its products ( independent manufacturers ), the majority of which are in Southeast Asia. During the
year ended March 31, 2026 , production of finished goods was predominantly from Vietnam and Indonesia, while
less than 5 % was from China or any other individual country . The majority of raw materials and components used by
independent manufacturers are purchased from affiliates, manufacturers, factories, and other agents ( designated
suppliers ), who work with other subcontractors that extract, process, or convert these raw materials. Sheepskin is
used to manufacture a significant portion of the Company’s UGG brand products and is sourced primarily from
designated suppliers in Australia and processed by two tanneries in China.
Cloud Computing Arrangements ( CCA s) . The Company enters into various CCA s that are governed by service
contracts (hosting arrangements) to support operations. Application development stage implementation costs
(implementation costs) of a hosting arrangement are deferred and recorded to prepaid expenses and other assets
in the consolidated balance sheets . Amortization of implementation costs begins when the software is ready for its
intended use. Amortization of implementation costs are calculated on a straight-line basis over the term of the
hosting arrangement, including reasonably certain renewals, which are generally one to three years . Amortization
expense is recorded in SG&A expenses in the consolidated statements of comprehensive income .

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DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

CCA s are recorded in the consolidated balance sheets as follows:

As of March 31,

2026

2025

Prepaid expenses:

Net CCAs placed in service

$ 2,053

$ 2,167

Other assets:

Net CCAs placed in service

1,968

3,864

CCAs in process

16,508

163

Total

$ 20,529

$ 6,194

Refer to the section titled “Recoverability of Definite-Lived Intangible and Other Long-Lived Assets” below, within
this footnote, for further information on an impairment of a CCA re corded during the year ended March 31, 2025 .
Property and Equipment, Net. Property and equipment are stated at cost less accumulated depreciation, and
generally have a useful life of at least one year . Property and equipment include tangible, non-consumable items
owned by the Company. Software implementation costs are capitalized if they are incurred during the application
development stage and relate to costs to obtain computer software from third parties, including related consulting
expenses, or costs incurred to modify existing software that results in additional upgrades or enhancements that
provide additional functionality.
Depreciation of property and equipment is calculated using the straight-line method based on the estimated useful
life. Leasehold improvements are amortized to their residual value, if any, on the straight-line basis over their
estimated economic useful lives or the lease term, whichever is shorter. Changes in the estimate of the useful life of
an asset may occur after an asset is placed in service. For example, this may occur as a result of the Company
incurring costs that prolong the useful life of an asset, which would be recorded as an adjustment to depreciation
over the revised remaining useful life. Depreciation is recorded in SG&A expenses in the consolidated statements of
comprehensive income . Depreciation was $ 74,590 , $ 67,579 , and $ 54,958 during the years ended March 31, 2026 ,
2025 , and 2024 , respectively.
Operating Lease Assets and Lease Liabilities. The Company determines if an arrangement contains a lease at
inception of a contract. The Company recognizes operating lease assets and lease liabilities in the consolidated
balance sheets on the lease commencement date, based on the present value of the outstanding lease payments
over the reasonably certain lease term. The lease term includes the non-cancelable period at the lease
commencement date, plus any additional period covered by the Company’s option to extend (or not to terminate)
the lease that is reasonably certain to be exercised, or an option to extend (or not to terminate) a lease that is
controlled by the lessor.
Operating lease assets are initially measured at cost, which comprises the initial amount of the associated lease
liabilities, adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs
incurred, less any lease incentives, such as tenant allowances. Operating lease assets are subsequently measured
throughout the lease term at the carrying amount of the associated lease liabilities, plus initial direct costs, plus or
minus any prepaid or accrued lease payments, less the unamortized balance of lease incentives received.
Operating lease assets and lease liabilities are presented separately in the consolidated balance sheets on a
discounted basis. The current portion of operating lease liabilities is presented within current liabilities, while the
long-term portion is presented separately as long-term operating lease liabilities. Refer to Note 7, “Leases,” f or
further information on the discount rate methodology used to measure operating lease assets and lease liabilities.
Rent expense for operating lease payments is recognized on a straight-line basis over the lease term and recorded
in SG&A expenses in the consolidated statements of comprehensive income . Lease payments recorded in the
operating lease liabilities (1) are fixed payments, including in-substance fixed payments and fixed rate increases,
owed over the lease term and (2) exclude any lease prepayments as of the periods presented. Refer to Note 7,

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DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

“Leases,” for further information on the nature of variable lease payments and the timing of recognition of rent
expense.
The Company has elected not to recognize operating lease assets and lease liabilities for short-term leases, which
are defined as those operating leases with a term of 12 months or less . Instead, lease payments for short-term
leases are recognized on a straight-line basis over the lease term in rent expense and recorded as a component of
SG&A expenses in the consolidated statements of comprehensive income .
The Company monitors for events that require a change in estimates for its operating lease assets and lease
liabilities, such as modifications to the terms of the contract, including the lease term, economic events that may
trigger a contractual term contingency, such as minimum lease payments or termination rights, and related changes
in discount rates used to measure the operating lease assets and lease liabilities, as well as events or
circumstances that result in lease abandonment or operating lease asset impairments. When a change in estimates
results in the remeasurement of the operating lease liabilities, a corresponding adjustment is made to the carrying
amount of the operating lease assets. The operating lease assets are remeasured and amortized on a straight-line
basis over the remaining lease term, with no impact on the related operating lease liabilities. Refer to the section
titled “Recoverability of Definite-Lived Intangible and Other Long-Lived Assets” below, within this footnote, for further
information on the Company’s accounting policy for evaluating the carrying amount of its operating lease assets and
related leasehold improvements for indicators of impairment.
Asset Retirement Obligations ( ARO s). The Company is contractually obligated under certain of its lease
agreements to restore certain retail, office, and warehouse facilities back to their original conditions. At lease
inception, the present value of the estimated fair value of these liabilities is recorded along with the related asset.
The liability is estimated based on assumptions requiring management’s judgment, including facility closing costs
and discount rates, and is accreted to its projected future value over the life of the asset.
The Company’s ARO s are recorded in other long-term liabilities in the consolidated balance sheets and activity was
as follows:

Years Ended March 31,

2026

2025

Beginning balance

$ 28,118

$ 25,686

Additions and changes in estimate

8,152

2,192

Liabilities settled during the period

( 735 )

( 732 )

Accretion expenses

1,122

927

Foreign currency translation gains

133

45

Ending balance

$ 36,790

$ 28,118

Goodwill and Indefinite-Lived Intangible Assets . Goodwill represents the excess of the purchase price over the
estimated fair value of net assets acquired in a business combination. As of March 31, 2026 , and 2025 , the carrying
value of goodwill recorded in the consolidated balance sheets was $ 13,990 , consisting of $ 7,889 and $ 6,101
attributable to the HOKA brand and UGG brand reportable operating segment s, respectively. The Company also
holds an indefinite-lived intangible asset for a trademark related to the Teva brand. As of March 31, 2026 , and 2025 ,
the carrying value of the indefinite-lived intangible asset recorded within other intangible assets in the consolidated
balance sheets was $ 15,454 .
Goodwill and indefinite-lived intangible assets are not amortized and are assessed for impairment at least annually
and if events or changes in circumstances indicate that the carrying value may not be recoverable. The Company
performs its annual goodwill assessment at the reporting unit level (the wholesale channel of each of the HOKA
brand and UGG brand) as of December 31st and performs its annual indefinite-lived intangible asset assessment
for the Teva brand as of October 31st. When evaluating for impairment, t he Company first performs a qualitative
assessment. If the qualitative assessment indicates potential impairment, the Company performs a quantitative
assessment to estimate fair value using discounted cash flow models (such as an income approach) and other

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DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

market-based valuation techniques. An impairment charge is recognized for the excess of the carrying value over
fair value. No impairment losses were recorded for goodwill or indefinite-lived intangible assets during the years
ended March 31, 2026 , 2025 , and 2024 . Accumulated goodwill impairment losses were $ 15,831 as of March 31,
2026 , and 2025 .
Definite-Lived Intangible and Other Long-Lived Assets. Definite-lived intangible assets include definite-lived
trademarks. As of March 31, 2026 , and 2025 , the definite-lived intangible asset net carrying value is immaterial .
Other long-lived assets include operating lease assets and property and equipment (primarily machinery and
equipment, internal-use software (including CCA s), and related leasehold improvements).
Definite-lived intangible and other long-lived assets are amortized on a straight-line basis over their estimated useful
lives. Definite-lived intangible assets and other long-lived assets are reviewed for impairment at the asset group
level, which is the lowest level for which identifiable cash flows are largely independent, when events or changes in
circumstances indicate that the carrying amount may not be recoverable. If indicators are present, recoverability is
assessed by comparing the carrying value of the asset group to estimated undiscounted future cash flows; if not
recoverable, an impairment loss is recognized for the excess of carrying value over estimated fair value. Estimated
fair value is generally determined using discounted future cash flows or other market -based valuation techniques.
Impairment losses, if any, are recorded within SG&A expenses in the consolidated statements of comprehensive
income .
No impairment indicators for definite-lived intangible assets were identified during the years ended March 31, 2026 ,
and 2025 . During the year ended March 31, 2024 , the Company recorded an $ 8,164 impairment loss within SG&A
expenses in the consolidated statements of comprehensive income related to the Sanuk brand definite-lived
trademark in the Other brands reportable operating segment. The impairment was driven by lower-than-expected
results of operations in the wholesale channel, which resulted in the carrying value exceeding its estimated fair
value, determined by using discounted future cash flows.
No impairment indicators for other long-lived assets were identified during the year ended March 31, 2026 . During
the years ended March 31, 2025 , and 2024 , the Company recorded impairment charges of $ 4,290 and $ 1,015 ,
respectively , within SG&A expenses in the consolidated statements of comprehensive income . The impairment
charge recorded during the year ended March 31, 2025 , related primarily to an underperforming CCA and was
included within unallocated enterprise and shared brand expenses. The impairment charge recorded during the
year ended March 31, 2024 , related primarily to underperformance of certain retail store‑related operating lease
assets and related leasehold improvements within the UGG brand and HOKA brand reportable operating segment s.
Derivative Instruments and Hedging Activities. The Company may use derivative instruments to partially offset its
business exposure to foreign currency risk on expected cash flows and certain existing assets and liabilities,
primarily intercompany balances. To reduce the volatility in earnings from fluctuations in foreign currency exchange
rates, the Company may hedge a portion of forecasted sales denominated in foreign currencies. The Company
enters into foreign currency forward or option contracts ( derivative contracts ), generally with maturities up to 18
months or less to manage foreign currency risk and certain of these derivative contracts are designated as cash
flow hedges of forecasted sales ( Designated Derivative Contracts). The Company may also enter into derivative
contracts that are not designated as cash flow hedges ( Non-Designated Derivative Contracts ), to offset a portion of
anticipated gains and losses on certain intercompany balances until the expected time of repayment. The Company
does not use derivative contracts for trading purposes.
Designated and Non-Designated Derivative Contracts are recorded at fair value measured using Level 2 fair value
inputs, consisting of quoted forward spot rates from counterparties at the end of the applicable periods, which are
corroborated by market-based pricing. The related assets and liabilities are classified based on their maturity dates
and recorded in other current assets or other assets, and in other accrued expenses or other long-term liabilities, as
applicable, in the consolidated balance sheets .

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DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

C hanges in the fair value of Designated Derivative Contracts are recorded, net of tax, in OCI in the consolidated
statements of comprehensive income and in accumulated other comprehensive loss ( AOCL ) in the consolidated
balance sheets . Amounts are reclassified from AOCL to net sales in the consolidated statements of comprehensive
income when the related sales are recognized and to SG&A expenses in the consolidated statements of
comprehensive income after maturity. When it is probable that a forecasted transaction will not occur, the Company
discontinues hedge accounting and the accumulated gains or losses in AOCL related to the hedging relationship are
immediately recorded in OCI in the consolidated statements of comprehensive income . The Company includes all
hedge components in its assessment of effectiveness for its derivative contracts . Refer to Note 4, “Fair Value
Measurements,” for further information on the fair value of derivative instruments.
Changes in the fair value of Non-Designated Derivative Contracts are recorded in SG&A expenses in the
consolidated statements of comprehensive income . The changes in fair value for these contracts are generally
offset by the remeasurement gains or losses associated with the underlying foreign currency-denominated
intercompany balances, which are recorded in SG&A expenses in the consolidated statements of comprehensive
income .
The Company generally enters into over-the-counter derivative contracts with high-credit-quality counterparties, and
therefore considers the risk that counterparties fail to perform according to the terms of the contract as low. The
Company factors the nonperformance risk of the counterparties into the fair value measurements of its derivative
contracts . Refer to Note 10, “Derivative Instruments,” for further information on the impact of derivative instruments
and hedging activities.
Stock Repurchase Program. Repurchased shares of the Company’s common stock are retired. The par value of
repurchased shares is deducted from common stock, and the excess repurchase price over par value as well as the
portion due for excise taxes, is allocated to retained earnings in the consolidated balance sheets . Refer to Note 11,
“Stockholders’ Equity,” for further information on the Company’s stock repurchase program.
Revenue Recognition. Revenue is recognized when a performance obligation is completed at a point in time and
when the customer has obtained control. Control passes to the customer when they have the ability to direct the use
of and obtain substantially all the remaining benefits from the goods transferred. The amount of revenue recognized
is based on the transaction price, which represents the invoiced amount less known actual amounts or estimates of
variable consideration. The Company recognizes revenue at the transaction price, net of variable consideration,
including sales returns and allowances for sales discounts and chargebacks, and excludes taxes that are collected
from customers and remitted to governmental authorities, such as sales, use, certain excise, and value-added
taxes. Revenue excludes fees and sales commissions, which are expensed as incurred and are recorded in SG&A
expenses in the consolidated statements of comprehensive income . The Company’s customer contracts do not
have a significant financing component due to their short durations, which are typically e ffective for one year or less,
and have payment terms that are generally 30 to 60 days .
Wholesale and international distributor revenue is recognized either when products are shipped or when delivered,
depending on the applicable contract terms. Retail store and e-commerce revenue transactions are recognized at
the point of sale and upon shipment, respectively. Shipping and handling costs paid to third-party shipping
companies are recorded as cost of sales in the consolidated statements of comprehensive income . Shipping and
handling costs are a fulfillment service, and, for certain wholesale and all e-commerce transactions, revenue is
recognized when the customer is deemed to obtain control upon the date of shipment. Refer to Note 2, “Revenue
Recognition and Business Concentrations,” for further information regarding the Company’s components of variable
consideration.
Cost of Sales . Cost of sales for the Company’s goods is primarily for finished goods, as well as related overhead.
Finished goods include material costs, including commodities, for products; allocation of initial molds; and tooling
cost that are amortized based on minimum contractual quantities of related product and recorded in cost of sales in
the consolidated statements of comprehensive income when the product is sold.

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DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

Distribution Costs . Distribution costs include payroll and related costs, rent and occupancy, depreciation and other
related costs, and other SG&A expenses within other segment items for owned warehousing, third-party logistics
provider ( 3PL ) service fees, and receiving, inspecting, allocating, and packaging product. Distribution costs include
fixed costs and variable costs that fluctuate with net sales and are expensed as incurred, which are primarily
included in unallocated enterprise and shared brand expenses. Such costs amounted to $ 266,237 , $ 279,090 , and
$ 238,312 for the years ended March 31, 2026 , 2025 , and 2024 , respectively, and are recorded in SG&A expenses
in the consolidated statements of comprehensive income . Refer to Note 13, “Reportable Operating Segments,” for
further information on the Company’s unallocated enterprise and shared brand expenses.
Research and Development Costs . Research and development (R&D) costs include payroll and related costs and
other SG&A expenses within other segment items. R&D costs are expensed as incurred, and included within each
reportable operating segment, as applicable, as well as unallocated enterprise and shared brand expenses . Such
costs amounted to $ 68,899 , $ 56,676 , and $ 49,171 for the years ended March 31, 2026 , 2025 , and 2024 ,
respectively, and are recorded in SG&A expenses in the consolidated statements of comprehensive income . Refer
to Note 13, “Reportable Operating Segments,” for further information on the Company’s unallocated enterprise and
shared brand expenses.
Advertising, Marketing, and Promotion Expenses . Advertising, marketing, and promotion expenses include media
advertising (television, radio, print, social, digital), tactical advertising (signs, banners, point-of-sale materials) and
other promotional costs; and are specific to the Company’s brands and allocated to each reportable operating
segment, as applicable. Such costs amounted to $ 495,838 , $ 432,198 , and $ 348,852 f or the years ended March 31,
2026 , 2025 and 2024 , respectively, and are recorded in SG&A expenses in the consolidated statements of
comprehensive income . Advertising costs are expensed the first time the advertisement is run or communicated. All
other costs of advertising, marketing, and promotion are expensed as incurred. Included in prepaid expenses as of
March 31, 2026 , and 2025 are $ 3,519 and $ 4,045 , respectively, related to prepaid advertising, marketing, and
promotion expenses for programs expected to take place after such dates.
Stock-Based Compensation . All of the Company’s stock-based compensation is classified within stockholders’
equity. Stock-based compensation expense is measured at the grant date based on the fair value of the award and
is recorded, net of forfeitures, in SG&A expenses in the consolidated statements of comprehensive income ratably
over the vesting period. The grant date fair value of time-based restricted stock units ( RSU s) and of employees’
purchase rights under the employee stock purchase plans is determined based on the closing market price of the
Company’s common stock on the date of grant. The grant date fair value of long-term incentive plan performance-
based stock units ( LTIP PSU s), which include a market condition based on the Company’s relative total stockholder
return ( TSR ) as well as financial performance conditions and service requirements, is estimated as of the grant date
using a Monte Carlo simulation .
Determining the fair value and related expense of stock-based compensation requires judgment, including
estimating the percentage of awards that will be forfeited and probabilities of meeting the awards’ performance
criteria, as well as the Company’s reliance on the closing price of its stock on the New York Stock Exchange at or
near the time of grant. If actual forfeitures differ significantly from the estimates or if probabilities change during a
period, stock-based compensation expense and the Company’s results of operations could be materially impacted.
Refer to Note 9, “Stock-Based Compensation,” for further information on grant activity, types of awards, and
additional disclosure related to stock-based compensation.
Retirement Plan. The Company provides a 401(k) defined contribution plan that eligible US employees may elect to
participate through tax-deferred contributions or other deferrals. The Company matches 50 % of each eligible
participant’s deferrals on up to 6 % of eligible compensation. Internationally, the Company has various defined
contribution plans. Certain international locations require mandatory contributions under social programs, and the
Company contributes at least the statutory minimums . US 401(k) matching contributions totaled $ 6,824 , $ 6,528 ,
and $ 5,129 during the years ended March 31, 2026 , 2025 , and 2024 , respectively, and were recorded in SG&A
expenses in the consolidated statements of comprehensive income . In addition, the Company may also make
discretionary profit-sharing contributions to the plan. However, there were no Company profit-sharing contributions
for the years ended March 31, 2026 , 2025 , and 2024 .

Table of Contents                                                                                                                                                     F-19

DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

Non-qualified Deferred Compensation . T he Company sponsors an unfunded, non-qualified deferred compensation
plan ( NQDC Plan ) that provides certain members of its management team with the opportunity to defer
compensation into the NQDC Plan . The NQDC Plan year is from January 1st to December 31st. Participants may
defer up to 50 % of their annual base salary and up to 95 % of any cash incentive bonus under the NQDC Plan . The
Company may utilize a trust as an informal reserve for the benefits payable under the NQDC Plan , though assets
remain subject to claims of general creditors. The Company primarily funds its obligations under the NQDC Plan
through corporate-owned life insurance. Deferred compensation is recognized based on the fair value of the
participants’ accounts. Refer to Note 4, “Fair Value Measurements,” for further information on the fair value of
deferred compensation assets and liabilities.
Self-Insurance . The Company is self-insured for a significant portion of its employee medical, including pharmacy,
and dental liability exposures. Liabilities for self-insured exposures are accrued for the amounts expected to be paid
based on historical claims experience and actuarial data for forecasted settlements of claims filed and for incurred
but not yet reported claims. Accruals for self-insured exposures are included in accrued payroll in the consolidated
balance sheets . Excess liability insurance has been purchased to limit the amount of self-insured risk on claims.
Income Taxes . Income taxes are accounted for under the asset and liability method. Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to net operating loss carryforwards and
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 expected to apply to
taxable income during the years in which those temporary differences are expected to be recovered or settled. The
effect on deferred taxes of a change in tax rates is recorded in the consolidated statements of comprehensive
income in the period that includes the enactment date.
The Company recognizes the effect of income tax positions in the consolidated financial statements only if those
positions are more likely than not to be sustained upon examination. Recognized income tax positions are
measured at the largest amount of tax benefit that is more than 50% likely to be realized upon settlement. Changes
in recognition or measurement are recorded in the period in which the change in judgment occurs. The Company
records interest and penalties accrued for income tax contingencies as interest expense in the consolidated
statements of comprehensive income . Refer to Note 5, “Income Taxes,” for further information on tax impacts and
components of tax balances in the consolidated financial statements .
Comprehensive Income . Comprehensive income or loss is the total of net earnings and all other non-owner
changes in equity. Comprehensive income or loss includes net income or loss, foreign currency translation
adjustments, and unrealized gains and losses on cash flow hedges. Refer to Note 11, “Stockholders’ Equity,” for
further information on components of OCI .
Net Income per Share . Basic net income or loss per share represents net income or loss divided by the weighted-
average number of common shares outstanding for the period. Diluted net income or loss per share represents net
income or loss divided by the weighted-average number of shares outstanding, including the dilutive impact of
potential issuances of common stock. Refer to Note 12, “Basic and Diluted Shares,” for further information on a
reconciliation of basic to diluted weighted-average common shares outstanding .

Table of Contents                                                                                                                                                     F-20

DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

Note 2. Revenue Recognition and Business Concentrations

Disaggregated Revenue. Refer to Note 13, “Reportable Operating Segments,” for further information on the
Company’s disaggregation of revenue by reportable operating segment .
Channel Concentration. Net sales by channel were as follows:

 

Years Ended March 31,

2026

2025

2024

Wholesale

$ 3,208,107

$ 2,855,865

$ 2,432,307

Direct-to-Consumer

2,264,189

2,129,747

1,855,456

Total

$ 5,472,296

$ 4,985,612

$ 4,287,763

Geographic Concentration. Net sales by geography were as follows:

 

Years Ended March 31,

2026

2025

2024

Domestic

$ 3,191,518

$ 3,186,709

$ 2,863,674

International

2,280,778

1,798,903

1,424,089

Total

$ 5,472,296

$ 4,985,612

$ 4,287,763

Foreign Currency Concentration. For the years ended March 31, 2026 , 2025 , and 2024 , no single international
country comprised 10.0% or more of the Company’s total net sales. For the years ended March 31, 2026 , 2025 , and
2024 , net sales in foreign currencies, which exclude US denominated distributor sales, were $ 1,748,061 ,
$ 1,376,782 , and $ 1,105,057 , respectively.
Customer Concentration . For the years ended March 31, 2026 , 2025 , and 2024 , no single global customer
comprised 10.0% or more of the Company’s total net sales. As of March 31, 2026 , the Company has one customer
that represents 18.5 % of trade accounts receivable, net, compared to one customer that represents 13.6 % of trade
accounts receivable, net, as of March 31, 2025 . Management performs regular evaluations concerning the ability of
the Company’s customers to satisfy their obligations to the Company and recognizes an allowance for doubtful
accounts based on these evaluations.
V ariable Consideration . Components of variable consideration include the estimated sales return asset and
liability, as well as allowances for chargebacks and sales discounts. Estimated variable consideration is included in
the transaction price only to the extent it is probable that a significant reversal of cumulative revenue recognized will
not occur in a future period . The Company reassesses these estimates at each reporting period and adjusts them,
as necessary, to reflect changes in facts and circumstances.
Sales Return Asset and Liability . Reserves are recorded for anticipated future returns of goods shipped prior to the
end of the reporting period. In general, the Company accepts returns for damaged or defective products for up to
one year. Returns are generally accepted from customers and end consumers up to 90 day s from the point of sale
for cash or credit.
Sales returns are a refund asset for the right to recover the inventory and a refund liability for the stand-ready right
of return. Changes to the refund asset for the right to recover the inventory are recorded against cost of sales and
changes in the refund liability are recorded against gross sales in the consolidated statements of comprehensive
income . The refund asset for the right to recover the inventory is recorded in other current assets and the related
refund liability is recorded in other accrued expenses in the consolidated balance sheets . The amounts of these
reserves are 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.

Table of Contents                                                                                                                                                     F-21

DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

The following table summarizes changes in the estimated sales returns for the periods presented:

Sales Return
Asset

Sales Return
Liability

Balance, March 31, 2024

$ 13,866

$ ( 55,327 )

Net additions to sales return liability (1)

74,150

( 306,968 )

Actual returns

( 66,896 )

298,833

Balance, March 31, 2025 (2)

21,120

( 63,462 )

Net additions to sales return liability (1)

81,681

( 328,887 )

Actual returns

( 75,072 )

312,294

Balance, March 31, 2026 (2)

$ 27,729

$ ( 80,055 )

(1) Net additions to the sales return liability include a provision for anticipated sales returns, which consists of both contractual
return rights and discretionary authorized returns.
(2) As of March 31, 2026 , and 2025 , the sales return liability includes $ 63,907 and $ 47,216 , respectively, for the wholesale
channel and $ 16,148 and $ 16,246 , respectively, for the DTC channel.
Allowance for Chargebacks. The Company provides a trade accounts receivable allowance for chargebacks for
wholesale channel sales. When customers pay their invoices, they may take deductions against their invoices that
can include chargebacks for price adjustments, short shipments, and other reasons. Therefore, the Company
records 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. Additions to the allowance
are recorded against gross sales or SG&A expenses in the consolidated statements of comprehensive income .
Allowance for Sales Discounts. The Company provides a trade accounts receivable allowance for sales discounts
for wholesale channel sales, which reflects a discount that customers may take, generally based on meeting certain
order, shipment or prompt payment terms. The Company uses the amount of the discounts that are available to be
taken against the period end trade accounts receivable to estimate and record a corresponding reserve for sales
discounts. Additions to the allowance are recorded against gross sales in the consolidated statements of
comprehensive income .
Contract Liabilities . Contract liabilities are performance obligations that the Company expects to satisfy or relieve
within the n ext 12 months , advance consideration obtained prior to satisfying a performance obligation, or
unconditional obligations to provide goods or services under non-cancelable contracts before the transfer of goods
or services to the customer has occurred. Contract liabilities are recorded in other accrued expenses in the
consolidated balance sheets and include loyalty programs and other deferred revenue.
Loyalty Programs . The Company has certain loyalty programs in its DTC channel where consumers can earn
rewards from qualifying purchases that are considered a material right for discounts on future purchases. The
Company defers recognition of revenue for unredeemed loyalty awards acquired through qualifying purchases until
the earlier of actual or estimated redemption or expiration. Estimates are determined based on historical redemption
and expiration patterns. Activity related to loyalty programs for the contract liability recorded in other accrued
expenses in the consolidated balance sheets was as follows :

Years Ended March 31,

2026

2025

Beginning balance

$ ( 18,566 )

$ ( 17,586 )

Redemptions and expirations for loyalty certificates and points recognized in net
sales

105,066

68,080

Deferred revenue for loyalty points and certificates issued

( 107,500 )

( 69,060 )

Ending balance

$ ( 21,000 )

$ ( 18,566 )

Table of Contents                                                                                                                                                     F-22

DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

Deferred Revenue. Revenue is deferred for wholesale channel transactions when certain conditions outlined within
the contract terms, including the transfer of control or delivery of product, have not occurred, such as when a
wholesale channel customer prepays for ordered product. Activity related to deferred revenue for the contract
liability recorded in other accrued expenses in the consolidated balance sheets was as follow s:

Years Ended March 31,

2026

2025

Beginning balance

$ ( 27,305 )

$ ( 9,591 )

Additions of customer cash payments

( 100,874 )

( 80,732 )

Revenue recognized

98,040

63,018

Ending balance

$ ( 30,139 )

$ ( 27,305 )

Note 3. Property and Equipment

Property and equipment, net, are summarized as follows:

As of March 31,

 

Useful Life
(Years)

2026

2025

Land

Indefinite

$ 32,864

$ 32,864

Building

39.5

63,990

41,099

Machinery and equipment

1 - 10

304,343

282,838

Furniture and fixtures

3 - 7

60,132

47,464

Computer software

3 - 10

143,300

139,412

Leasehold improvements

1 - 11

179,482

137,806

Construction in progress

10,844

47,080

Gross property and equipment

794,955

728,563

Less accumulated depreciation and amortization

( 457,173 )

( 402,964 )

Total

$ 337,782

$ 325,599

Geographic Concentration. Property and equipment, net, by geography was as follows:

As of March 31,

2026

2025

United States

$ 281,119

$ 289,672

International (1)

56,663

35,927

Total

$ 337,782

$ 325,599

(1) As of March 31, 2026 , and 2025 , no property and equipment, net, associated with any single international country represented
10.0% or more of the Company’s total property and equipment, net.

Note 4. Fair Value Measurements

The accounting standard for fair value measurements provides a framework for measuring fair value, which is
defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in
the principal or most advantageous market in an orderly transaction between market participants on the
measurement date. The fair value hierarchy under this accounting standard requires an entity to maximize the use
of observable inputs, where available.

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DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

The following summarizes the three levels of inputs required:
• Level 1: Quoted prices in active markets for identical assets and liabilities.
• Level 2: Observable inputs other than quoted prices in active markets for identical assets and
liabilities.
• Level 3: Unobservable inputs in which little or no market activity exists, therefore requiring the
Company to develop its own assumptions.
The carrying amount of the Company’s financial instruments, which principally include cash and cash equivalents,
trade accounts receivable, net, trade accounts payable, accrued payroll, and other accrued expenses, approximates
fair value due to their short-term nature. When the Company makes short-term borrowings, the carrying amounts,
which are considered Level 2 liabilities, approximate fair value based upon current rates and terms available to the
Company for similar debt. The Company does not currently have any Level 3 assets or liabilities.
Assets and liabilities that are measured on a recurring basis at fair value in the consolidated balance sheets are as
follows:

As of

Measured Using

March 31, 2026

Level 1

Level 2

Level 3

Assets:

Cash equivalents:

Money-market funds

$ 1,462,683

$ 1,462,683

$ —

$ —

Other current assets:

Designated Derivative Contracts asset

7,316

—

7,316

—

Non-Designated Derivative Contracts asset

370

—

370

—

Other assets:

Non-qualified deferred compensation asset

22,845

22,845

—

—

Total assets measured at fair value

$ 1,493,214

$ 1,485,528

$ 7,686

$ —

Liabilities:

Other accrued expenses:

Non-qualified deferred compensation liability

$ ( 2,407 )

$ ( 2,407 )

$ —

$ —

Other long-term liabilities:

Non-qualified deferred compensation liability

( 29,291 )

( 29,291 )

—

—

Total liabilities measured at fair value

$ ( 31,698 )

$ ( 31,698 )

$ —

$ —

As of

Measured Using

March 31, 2025

Level 1

Level 2

Level 3

Assets:

Cash equivalents:

Money-market funds

$ 1,485,555

$ 1,485,555

$ —

$ —

Other current assets:

Designated Derivative Contracts asset

2,163

—

2,163

—

Non-Designated Derivative Contracts asset

75

—

75

—

Other assets:

Non-qualified deferred compensation asset

16,967

16,967

—

—

Total assets measured at fair value

$ 1,504,760

$ 1,502,522

$ 2,238

$ —

Table of Contents                                                                                                                                                     F-24

DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

As of

Measured Using

March 31, 2025

Level 1

Level 2

Level 3

Liabilities:

Other accrued expenses:

Designated Derivative Contracts liability

$ ( 64 )

$ —

$ ( 64 )

—

Non-qualified deferred compensation liability

( 2,345 )

( 2,345 )

—

—

Other long-term liabilities:

Non-qualified deferred compensation liability

( 22,793 )

( 22,793 )

—

—

Total liabilities measured at fair value

$ ( 25,202 )

$ ( 25,138 )

$ ( 64 )

$ —

The fair value of Designated Derivative Contracts and Non-Designated Derivative Contracts is determined by using
quoted market prices of the same or similar instruments, including spot and forward currency exchange rates,
adjusted for counterparty exposure and the Company’s own credit risk, if any. Refer to Note 10, “Derivative
Instruments,” for further information regarding Designated Derivative Contracts and Non-Designated Derivative
Contracts .
The Company’s non-financial assets, such as other long-lived assets and definite-lived intangible assets, which
include operating lease assets, machinery and equipment, leasehold improvements, definite-lived trademarks; as
well as indefinite-lived intangible assets and goodwill, are not required to be carried at fair value on a recurring basis
and are reported at carrying value. Instead, these assets are tested for impairment annually, or when an event
occurs or changes in circumstances indicate the carrying value may not be recoverable. When determining fair
value, Level 3 measurements are used for the estimates and assumptions, including undiscounted future cash flows
expected to be generated by the asset groups based upon historical experience, expected market conditions, as
well as management’s plans.

Note 5. Income Taxes

Income Before Income Taxes. Components of income before income taxes recorded in the consolidated
statements of comprehensive income were as follows:

Years Ended March 31,

2026

2025

2024

Domestic (1)

$ 1,084,446

$ 1,033,428

$ 688,981

Foreign

241,910

209,871

289,960

Total

$ 1,326,356

$ 1,243,299

$ 978,941

(1) Domestic income before income taxes for the year ended March 31, 2024 , is presented net of intercompany dividends (or
repatriated cash) of $ 250,000 . No intercompany dividends (or repatriated cash) that were subject to income taxes from a
foreign subsidiary were declared during years ended March 31, 2026 , and 2025 .

Table of Contents                                                                                                                                                     F-25

DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

Income Tax Expense. Components of income tax expense (benefit) recorded in the consolidated statements of
comprehensive income were as follows:

Years Ended March 31,

2026

2025

2024

Current income taxes

Federal

$ 205,062

$ 177,652

$ 146,939

State

34,461

43,847

32,065

Foreign

53,978

61,254

41,884

Total current income taxes

293,501

282,753

220,888

Deferred income taxes

Federal

11,649

( 1,134 )

( 3,113 )

State

3,329

219

( 2,336 )

Foreign

( 6,194 )

( 4,630 )

3,939

Total deferred income taxes

8,784

( 5,545 )

( 1,510 )

Total income tax expense

$ 302,285

$ 277,208

$ 219,378

Income Tax Expense Reconciliation . The following tables provide the reconciliation of income tax expense
(benefit) to the amount computed by applying the US federal statutory tax rate to income before income taxes. The
following table reflects the prospective adoption of ASU 2023-09 and the subsequent table provides prior year
reconciliations before the adoption of ASU 2023-09.

Year Ended March 31,

2026

US federal statutory tax rate

$ 278,535

21.0 %

Domestic

United States

State income taxes, net of federal income tax benefit (1)

30,417

2.3

Effect of cross-border tax laws

Foreign tax credits

( 25,919 )

( 2.0 )

Global intangible low-taxed income (commonly known as GILTI)

25,819

1.9

Foreign derived intangible income (commonly known as FDII)

( 19,456 )

( 1.5 )

Other

3,400

0.3

Tax credits

( 1,700 )

( 0.1 )

Changes in valuation allowances

( 4,060 )

( 0.3 )

Nontaxable or nondeductible items

7,862

0.6

Other adjustments

799

0.1

Effects of changes in tax laws or rates enacted in the current period (2)

—

—

Foreign tax effects

Other foreign jurisdictions

( 5,140 )

( 0.4 )

Changes in net unrecognized tax benefits

11,728

0.9

Effective income tax expense and rate

$ 302,285

22.8 %

(1) State taxes in California, New York, and Pennsylvania made up the majority (greater than 50 percent) of the tax effect in this
category.
(2) No impact applicable to the periods presented.

Table of Contents                                                                                                                                                     F-26

DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

Years Ended March 31,

2025

2024

Computed expected income taxes

$ 261,093

$ 205,578

State income taxes, net of federal income tax benefit

45,991

32,023

Foreign rate differential

( 13,078 )

( 15,976 )

Gross unrecognized tax benefits

( 1,594 )

1,301

Intercompany transfers of assets

10,430

( 1,817 )

US tax on foreign earnings

( 14,548 )

4,750

Other

( 11,086 )

( 6,481 )

Total

$ 277,208

$ 219,378

The following table presents cash paid for income taxes, net of refunds, reflecting the prospective adoption of ASU
2023-09:

Year Ended March 31,

2026

Federal

$ 181,284

State

18,465

Foreign

China

15,991

Other foreign jurisdictions

18,574

Total foreign

34,565

Total cash paid for income taxes, net of refunds

$ 234,314

For the years ended March 31, 2025 , and 2024 , cash paid for income taxes was $ 345,397 and $ 234,062 ,
respectively, gross of immaterial tax refunds.
Deferred Taxes. The tax effects of temporary differences that give rise to significant portions of deferred tax assets
and deferred tax liabilities are as follows:

As of March 31,

2026

2025

Deferred tax assets

Amortization of intangible assets

$ —

$ 12,413

Operating lease liabilities

42,032

38,051

Uniform capitalization adjustment to inventory

9,713

10,723

State related taxes and credit carryforwards

2,268

3,107

Reserves and accruals

80,216

69,803

Net operating loss carry-forwards

11,033

10,421

Other

964

1,188

Gross deferred tax assets

146,226

145,706

Valuation allowances

( 3,957 )

( 5,138 )

Total deferred tax assets

142,269

140,568

Deferred tax liabilities

Table of Contents                                                                                                                                                     F-27

DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

As of March 31,

2026

2025

Prepaid expenses

( 10,239 )

( 8,727 )

Operating lease assets

( 31,925 )

( 29,189 )

Depreciation of property and equipment

( 25,825 )

( 23,359 )

Other

( 5,779 )

( 1,702 )

Total deferred tax liabilities

( 73,768 )

( 62,977 )

Deferred tax assets, net

$ 68,501

$ 77,591

The deferred tax assets are currently expected to be realized between fiscal years 2027 and 2032 . Based on the
level of historical taxable income and projections for future taxable income over the periods in which the deferred
tax assets are deductible, management believes it is more likely than not that the results of future operations will
generate sufficient taxable income to realize the net deferred tax assets . T he Company’s tax valuation allowances,
and changes therein, are primarily driven by foreign losses in jurisdictions in which the Company expects limited
future profitability, as well as the release of a valuation allowance on domestic tax attributes .
Repatriation of Cash. Certain earnings of the Company’s non‑ US subsidiaries are subject to US taxation, including
amounts treated as global intangible low-taxed income (commonly known as GILTI), which limits the differences
between the financial reporting and income tax basis of foreign undistributed earnings. In addition, as of March 31,
2026 , foreign withholding taxes have not been provided on unremitted earnings of the Company’s non‑ US
subsidiaries, as these amounts are considered to be indefinitely reinvested. The Company expects to repatriate
foreign earnings, and the related cash, only to the extent such earnings have been or will be subject to US income
tax and such cash is not required to fund ongoing operations. Due to the number of foreign jurisdictions involved
and the variability in applicable tax laws, the Company is unable to reasonably estimate the amount of foreign
withholding taxes that may be incurred upon repatriation. No intercompany dividends subject to foreign withholding
tax were declared by the Company during the year ended March 31, 2026 .
Changes in Tax Law. The Company has evaluated and is currently monitoring the impact of recent tax law
changes on its consolidated financial statements for the following:
• On July 4, 2025, H.R. 1, also known as the One Big Beautiful Bill Act , was signed into law.
Elements relevant to the Company include the reinstatement of bonus depreciation, the deductibility
of domestic research and development expenses, and modifications to international provisions. The
legislation has multiple effective dates, with certain provisions effective during fiscal year 2026 and
other relevant provisions effective during the fiscal year ending March 31, 2027 ( next fiscal year ).
The Company applied the applicable provisions of the new tax law during fiscal year 2026 , which
did not have a material impact on the effective tax rate, but did provide cash tax benefits due to
accelerated tax deductions.
• Various jurisdictions in which the Company operates have enacted legislation in response to Pillar
Two model rules ( Pillar Two ) that were previously released by the Organization for Economic Co-
operation and Development (commonly known as OECD), introducing a 15% global minimum tax
rate applied on a country-by-country basis for large multinational corporations. The Company
applied the applicable provisions of the new tax law during fiscal year 2026 . The effects of the new
tax law are included in the ‘Foreign tax effects’ line item in the section above titled “Income Tax
Expense Reconciliation,” but did not have a material impact on the Company’s consolidated
financial statements . The Company will continue to monitor Pillar Two developments and reflect the
impact of legislative changes in future periods including the additional guidance released in January
2026 regarding the Side-by-Side Framework to exclude US parented companies from the scope of
some Pillar Two taxes.
Unrecognized Tax Benefits . When tax returns are filed, some positions taken are subject to uncertainty about the
merits of the position taken or the amount that would be ultimately sustained upon examination. The benefit of a tax

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DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

position is recorded in the consolidated financial statements during the period in which the Company believes it is
more likely than not that the position will be sustained upon examination by taxing authorities, and is presented in
the ‘Changes in net unrecognized tax benefits’ line item in the section above titled “Income Tax Expense
Reconciliation.” The recognition threshold is measured as the largest amount of tax benefit that is more than 50%
likely to be realized upon settlement. The portion of the benefit that exceeds the amount measured, as described
above, is recorded as a liability for unrecognized tax benefits, along with any associated interest and penalties, in
the consolidated balance sheets .
A reconciliation of the beginning and ending amounts of total gross unrecognized tax benefits are as follows:

Years Ended March 31,

2026

2025

2024

Beginning balance

$ 21,233

$ 45,620

$ 44,901

Gross increase related to current year tax positions

5,400

4,499

4,318

Gross increase related to prior year tax positions

8,669

4,662

4,629

Gross decrease related to prior year tax positions

( 4,738 )

( 4,309 )

( 4,698 )

Settlements with taxing authorities

( 1,800 )

( 22,793 )

( 582 )

Lapse of statute of limitations

( 2,426 )

( 6,446 )

( 2,948 )

Ending balance

$ 26,338

$ 21,233

$ 45,620

Total gross unrecognized tax benefits recorded in the consolidated balance sheets are as follows:

As of March 31,

2026

2025

Current liability

Income tax payable

$ 6,206

$ 5,688

Long-term liability

Income tax liability

20,132

15,545

Total

$ 26,338

$ 21,233

As of March 31, 2026 , and 2025 , gross unrecognized tax benefits exclude immaterial federal benefits for state
income taxes related to uncertain tax positions in the Company’s income tax returns that would affect the
Company’s effective tax rate, if recognized. Interest and penalties recorded in income tax liability in the consolidated
balance sheets as of March 31, 2026 , and 2025 , and in interest expense in the consolidated statements of
comprehensive income during the years ended March 31, 2026 , 2025 , and 2024 , were immaterial .
The Company has on-going income tax examinations in various state and foreign tax jurisdictions and regularly
assesses tax positions taken during years open to examination. The Company files income tax returns in the US
federal jurisdiction and various state, local, and foreign jurisdictions. With few exceptions, the Company is no longer
subject to US federal, state, local, or foreign income tax examinations by tax authorities before fiscal year 2022 .
Although the Company believes its tax estimates are reasonable and prepares its tax filings in accordance with all
applicable tax laws, the final determination with respect to any tax audits, and any related litigation, could be
materially different from the Company’s estimates or from its historical income tax provisions and accruals. The
results of an audit or litigation could have a material impact on results of operations or cash flows in the periods for
which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs,
settlements, penalties, or interest assessments. However, management does not currently expect any such audits
and inquiries to have a material impact on the Company’s consolidated financial statements .

Note 6. Revolving Credit Facilities

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DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

Primary Credit Facility . In December 2022, the Company refinanced in full and terminated its prior credit
agreement originally entered into in September 2018. The refinanced revolving credit facility agreement is with
Citibank, N.A. ( Citibank ), as administrative agent, Comerica Bank, as sole syndication agent, which was assumed
by Fifth Third bank, as successor by merger with Comerica Bank and the lenders party thereto ( Credit Agreement ).
The Credit Agreement provides for a five -year , $ 400,000 unsecured revolving credit facility ( Primary Credit Facility ),
contains a $ 25,000 sublimit for the issuance of letters of credit, and matures on December 19, 2027 , subject to
extension on early termination as described in the Credit Agreement .
In addition to allowing borrowings in US dollars, the Primary Credit Facility provides a $ 175,000 sublimit for
borrowings in Euros, Sterling, Canadian dollars, and any other foreign currency that is subsequently approved by
Citibank, each lender, and each bank issuing letters of credit. Subject to customary conditions, the Company has
the option to increase the maximum principal amount available up to an additional $ 300,000 , resulting in a
maximum available principal amount of $ 700,000 . However, none of the lenders have committed at this time to
provide any such increase in the commitment.
The obligations of the Company and each other borrower under the Primary Credit Facility are g uaranteed by the
Company’s existing and future wholly owned domestic subsidiaries that meet certain materiality thresholds, subject
to limited exceptions. All obligations under the Primary Credit Facility and the foregoing guaranty are unsecured,
and amounts borrowed may be prepaid at any time without a premium or penalty, subject to limited exceptions.
Certain of the Company’s international subsidiaries may also borrow under the Primary Credit Facility , which permits
the Company, subject to customary conditions, to designate one or more additional subsidiaries organized in
international jurisdictions to borrow. The Company is liable for the obligations of each international borrower, but the
obligations of the international borrowers are several (not joint) in nature.
Interest Rate Terms. At the Company’s election, revolving loans issued under the Primary Credit Facility will bear
interest at the adjusted term SOFR , the adjusted Euro InterBank Offered Rate ( EURIBOR ), the Sterling Overnight
Index Average ( SONIA ), the Canadian Dollar Offered Rate ( CDOR ), or the adjusted Alternate Base Rate ( ABR ), in
each case plus the applicable interest rate margin.
Interest for borrowings in US dollars will fluctuate between SOFR , plus 1.00 % and 0.10 % based on the Company’s
total net leverage ratio, and ABR , plus 0 % per annum. The applicable interest rate margin is based on a pricing grid
based on the Company’s total net leverage ratio and ranges from 1.00 % to 1.625 % per annum in the case of loans
based on the SOFR , EURIBOR , SONIA , or CDOR , and from 0.00 % to 0.625 % per annum in the case of loans
based on ABR . As of March 31, 2026 , the effective interest rates for the 1-month SOFR and ABR are 4.75 % and
6.75 % , respectively.
Commitment Fees. The Company is required to pay a fee rate that fluctuates between 0.125 % and 0.20 % per
annum on the daily unused amount of the Primary Credit Facility , with the exact commitment fee based on the
Company’s total net leverage ratio.
Borrowing Activity. During the year ended March 31, 2026 , the Company made no borrowings or repayments under
the Primary Credit Facility . As of March 31, 2026 , the Company has no outstanding balance, $ 593 of outstanding
letters of credit, and available borrowings of $ 399,407 under the Primary Credit Facility .
China Credit Facility . In October 2021 , Deckers (Beijing) Trading Co., LTD ( DBTC ), a wholly owned subsidiary of
the Company, entered into a credit agreement in China (as amended, the China Credit Facility ) that provides for an
uncommitted revolving line of credit of up to CNY 300,000 , or $ 43,512 , with an overdraft facility sublimit of
CNY 100,000 , or $ 14,504 . The China Credit Facility is payable on demand and subject to annual review with a
defined aggregate period of borrowing of up to 24 months , which was amended to increase from 12 months in
November 2023 . The obligations under the China Credit Facility are guaranteed by the Company for 108.5 % of the
facility amount in US dollars.

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DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

Interest Rate Terms. Interest is based on the People’s Bank of China market rate multiplied by a variable liquidity
factor. As of March 31, 2026 , the effective interest rate is 3.30 % .
Borrowing Activity. During the year ended March 31, 2026 , the Company made no borrowings or repayments under
the China Credit Facility . As of March 31, 2026 , the Company has no outstanding balance, outstanding bank
guarantees of $ 480 , and available borrowings of $ 43,032 under the China Credit Facility .
Debt Covenants. Under the Credit Agreement , the Company is subject to usual and customary representations and
warranties, and contains usual and customary affirmative and negative covenants, which include limitations on
liens, additional indebtedness, investments, restricted payments, indemnification provisions in favor of the lenders
and transactions with affiliates. The financial covenant requires the total net leverage ratio to be no greater than
3.75 to 1.00 .
Under the Credit Agreement , the Company is also subject to other customary limitations, as well as usual and
customary events of default, which include non-payment of principal, interest, fees and other amounts; breach of a
representation or warranty; non-performance of covenants and obligations; default on other material debt;
bankruptcy or insolvency; material judgments; incurrence of certain material Employee Retirement Income Security
Act of 1974 ( ERISA ) liabilities; and a change of control of the Company. Under the China Credit Facility , DBTC is
subject to usual and customary representations and warranties, and usual and customary affirmative and negative
covenants, which include limitations on liens and additional indebtedness. As of March 31, 2026 , the Company is in
compliance with all financial covenants under the Primary Credit Facility and China Credit Facility .

Note 7. Leases

The Company primarily leases retail stores, showrooms, offices, and distribution facilities under operating lease
contracts which vary in lease terms. Some of the Company’s operating leases contain extension options between
one to 15 years . Historically, the Company has not entered into finance leases, and its lease agreements generally
do not contain residual value guarantees, options to purchase underlying assets, or material restrictive covenants.
Variable Lease Payments . Certain leases require additional payments based on (1) actual or forecasted sales
volume (either monthly or annually), (2) reimbursement for real estate taxes (tax), (3) common area maintenance
( CAM ), and (4) insurance (collectively, variable lease payments). Variable lease payments are generally excluded
from operating lease assets and lease liabilities and are recorded in rent expense as a component of SG&A
expenses in the consolidated statements of comprehensive income . Some leases are dependent upon forecasted
annual sales volume, and lease payments are recognized on a straight-line basis as rent expense over each annual
period when the achievement of the related sales target is reasonably likely to occur. Other variable lease
payments, such as tax, CAM , and insurance, are recognized in rent expense as incurred. Some leases contain one
fixed lease payment that includes variable lease payments, which are considered non-lease components. The
Company has elected to account for these instances as a single lease component and the total of these fixed
payments is used to measure the operating lease assets and lease liabilities.
Discount Rate. The Company discounts its unpaid lease payments using the interest rate implicit in the lease or, if
the rate cannot be readily determined, its IBR . Generally, the Company cannot determine the interest rate implicit in
the lease because it does not have access to the lessor’s estimated residual value or the amount of the lessor’s
deferred initial direct costs. The Company has a centralized treasury function, which enables the Company to use a
portfolio approach to discount lease obligations. Therefore, the Company generally derives a discount rate at the
lease commencement date by utilizing its IBR , which is based on what the Company would have to pay on a
collateralized basis to borrow an amount equal to its lease payments under similar terms. Because the Company
does not currently borrow on a collateralized basis under its revolving credit facilities, it uses the interest rate it pays
on its non-collateralized borrowings under its Primary Credit Facility as an input for deriving an appropriate IBR ,
adjusted for the amount of the lease payments, the lease term, and the effect on that rate of designating specific
collateral with a value equal to the unpaid lease payments for that lease.

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DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

Rent Expense. The components of rent expense for operating leases , excluding certain occupancy costs such as
maintenance and utilities, primarily recorded in SG&A expenses i n the consolidated statements of comprehensive
income were as follows:

Years Ended March 31,

2026

2025

2024

Operating

$ 88,921

$ 68,020

$ 64,006

Variable

48,396

39,284

40,615

Short-term

9,907

9,912

6,931

Total

$ 147,224

$ 117,216

$ 111,552

Operating Lease Liabilities. Maturities of undiscounted operating lease payments remaining as of March 31, 2026 ,
with a reconciliation to the present value of operating lease liabilities recorded in the consolidated balance sheets ,
are as follows:

Years Ending March 31,

Amount

2027

$ 95,325

2028

86,252

2029

67,082

2030

53,029

2031

37,522

Thereafter

97,346

Total undiscounted operating lease payments

436,556

Less: Imputed interest

( 61,362 )

Total

$ 375,194

As of March 31, 2026 , operating lease liabilities recorded in the consolidated balance sheets exclude undiscounted
minimum operating lease payments totaling $ 22,727 related to leases signed during fiscal year 2026 that had not
yet commenced. These p rimarily relate to showroom and new retail store leases and are expected to commence
during the next fiscal year .
Supplemental Disclosure . Key estimates and judgments related to operating lease assets and lease liabilities that
are outstanding and presented in the consolidated balance sheets are as follows:

As of March 31,

2026

2025

Weighted-average remaining lease term in years

5.8

5.5

Weighted-average discount rate

4.9 %

4.5 %

Supplemental non-cash information for amounts presented in the consolidated statements of cash flows related to
operating leases, were as follows (1) :

Years Ended March 31,

2026

2025

2024

Operating lease assets obtained in exchange for lease liabilities

$ 174,848

$ 70,179

$ 78,255

Reductions to operating lease assets for reductions to lease
liabilities

( 2,778 )

( 2,096 )

( 8,418 )

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DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

(1) Amounts disclosed include non-cash additions or reductions resulting from lease remeasurements, as well as reductions for
tenant improvement allowances. Non-cash additions during fiscal year 2026 primarily relate to investments in the Company’s
global retail store footprint made in the ordinary course of business.

Note 8. Commitments and Contingencies

Purchase Obligations. The Company has various types of purchase obligations for which no liability has been
recorded in the consolidated balance sheets , as it expects to fulfill these commitments in the normal course of
business , as follows:

Payments Due by Period

Less than
1 Year

1-3 Years

3-5 Years

Total

Purchase obligations for product (1)

$ 980,776

$ —

$ —

$ 980,776

Purchase obligations for commodities (2)

84,702

26,278

—

110,980

Other purchase obligations (3)

118,326

159,836

4,347

282,509

Total

$ 1,183,804

$ 186,114

$ 4,347

$ 1,374,265

(1) Purchase obligations for product consist primarily of open purchase orders issued to independent manufacturers in the ordinary
course of business and reflect the Company’s estimate of future payment commitments based on information currently
available. These obligations may be cancelled in limited situations and such cancellations are infrequent.
(2) Purchase obligations for commodities represent remaining commitments under existing supply agreements, which are subject
to minimum volume commitments (collectively, commodity contracts ). The Company currently enters into fixed purchasing
contracts with designated suppliers of sheepskin and sugarcane-derived ( EVA ) . The Company expects purchases under
commodity contracts in the ordinary course of business will eventually exceed the minimum commitment levels. The reported
amount generally reflects remaining minimum commitments expected to 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 . As of March 31, 2026 , and 2025 , the
Company had no outstanding deposits on supply agreements, and no refunds were received during the year ended March 31,
2026 , as a result of such agreements. During the year ended March 31, 2025 , the Company received a $ 16,243 refund for
outstanding deposits on supply agreements related to year ended March 31, 2024 . Subsequent to March 31, 2026, through
May 1, 2026, the Company entered into additional commodity contracts for an aggregate minimum volume commitment of
$ 111,800 .
(3) Other purchase obligations consist of non-cancellable fixed and estimated variable minimum commitments for information
technology ( IT ) services, 3PL service fees and other supply chain services, promotional expenses, and other commitments
under service and collaboration contracts.
Litigation. From time to time, the Company is involved in various legal proceedings, disputes, and other claims
arising in the ordinary course of business, including employment, intellectual property, product liability, and breach of
contract claims. Although the results of these matters cannot be predicted with certainty, the Company believes it is
not currently a party to any legal proceedings, disputes, or other claims for which a material loss is considered
probable and for which the amount (or range) of loss is reasonably estimable. However, regardless of the merit of
the claims raised or the outcome, these matters can have an adverse impact on the Company as a result of legal
costs, diversion of management’s time and resources, and other factors.
Indemnification. The Company has agreed to indemnify certain of its licensees, distributors, and promotional
partners in connection with claims related to the use of the Company’s intellectual property. The terms of such
agreements generally do not provide for a limitation on the maximum potential future payments. These agreements
may or may not be made pursuant to a written contract. In addition, from time to time, the Company also agrees to
standard indemnification provisions in commercial agreements in the ordinary course of business. Management
believes the likelihood of any payments under any of these arrangements is remote and would be immaterial. This
determination is made based on a prior history of insignificant claims and related payments.

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DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Fiscal Years Ended March 31, 2026 , 2025 , and 2024
(amounts in thousands, except per share data)

Note 9. Stock-based Compensation

Stock Incentive Plans. In September 2015, the Company’s stockholders approved the 2015 Stock Incentive Plan
( 2015 SIP ), which initially reserved 7,650,000 shares of the Company’s common stock for issuance to employees,
directors, consultants, independent contractors, and advisors. The 2015 SIP provided for the issuance of a variety of
stock-based compensation awards, including RSU s, performance-based restricted stock units ( PSU s), LTIP PSU s,
stock appreciation rights, stock bonuses, incentive stock options ( ISO s), and non-qualified stock options ( NQSO s).
In September 2024, the Company’s stockholders approved the 2024 Stock Incentive Plan ( 2024 SIP ), which
replaced the 2015 SIP . Like the 2015 SIP , the primary purpose of the 2024 SIP is to encourage ownership in the
Company by key personnel, whose long-term service is considered essential to the Company’s continued success.
The 2024 SIP initially reserved 7,800,000 shares of the Company’s common stock for issuance to employees,
directors, consultants, independent contractors, and advisors. The maximum aggregate number of shares that may
be issued to employees under the 2024 SIP through the exercise of ISO s is 4,500,000 . As of March 31, 2026 ,
7,445,947 shares of common stock remained available for future issuance under the 2024 SIP , subject to
adjustment for future stock splits, stock dividends, and similar changes in capitalization.
Annual Stock Awards. During the years ended March 31, 2026 , 2025 , and 2024 , t he Company granted RSU and
LTIP PSU awards to certain members of the Company’s management team, which entitle the recipients to receive
shares of the Company’s common stock upon vesting. No dividends are paid or accumulated on any RSU or LTIP
PSU awards.
A summary of the status and changes of the Company’s nonvested shares is as follows:

RSU s

LTIP PSU s

Number of
Shares

Weighted-
Average
Grant-Date
Fair Value

Number of
Shares

Weighted-
Average
Grant-Date
Fair Value

Nonvested, March 31, 2023

535,746

$ 55.10

667,224

$ 57.98

Granted (1)

235,788

95.55

277,692

95.13

Vested (2)

( 264,888 )

( 52.19 )

( 301,368 )

( 61.39 )

Forfeited

( 39,864 )

( 77.07 )

( 112,404 )

( 87.15 )

Nonvested, March 31, 2024

466,782

75.31

531,144

69.29

Granted (1)

165,988

158.78

148,770

151.19

Vested (2)

( 235,872 )

( 70.69 )

( 327,868 )

( 55.07 )

Forfeited

( 31,026 )

( 96.52 )

( 51,708 )

( 80.76 )

Nonvested, March 31, 2025

365,872

114.34

300,338

123.42

Granted (1)

327,175

103.24

274,860

94.42

Vested (2)

( 200,370 )

( 96.02 )

( 157,992 )

( 98.81 )

Forfeited

( 28,310 )

( 116.51 )

( 7,922 )

( 102.91 )

Nonvested, March 31, 2026

464,367

$ 114.29

409,284

$ 113.84

(1) The amounts granted are the maximum amounts under the terms of the applicable LTIP PSU s.
(2) The amounts vested include shares withheld to cover taxes that are not issued to the recipient.
Restricted Stock Units. RSU s are subject to a time-based vesting condition and typically vest in equal annual
installments over three years following the date of grant.