DECK 10-K & 10-Q changes, risk factors and insider trading

Our short and long-term success is subject to numerous risks and uncertainties, many of which involve factors that are difficult to predict or beyond our control. As a result, investing in our common stock involves substantial risk. Before deciding to purchase, hold or sell our common stock, stockholders and potential stockholders should carefully consider the risks and uncertainties described below, in addition to the other information contained in or incorporated by reference into this Annual Report, as well as the other information we file with the SEC. If any of these risks are realized, our business, financial condition, results of operations, and prospects could be materially and adversely affected. In that case, the value of our common stock could decline, and stockholders may lose all or part of their investment. Furthermore, additional risks and uncertainties of which we are currently unaware, or which we currently consider to be immaterial, could have a material adverse effect on our business.

Certain statements made in this section constitute “forward-looking statements,” which are subject to numerous risks and uncertainties including those described in this section. Refer to the section entitled “Cautionary Note Regarding Forward-Looking Statements” within this Annual Report for additional information.

The footwear, apparel, and accessories industry is subject to rapid changes in consumer preferences, and if we do not accurately anticipate and promptly respond to consumer demand and spending patterns, including by successfully introducing new products, we could lose sales, our relationships with customers could be harmed, and our brand loyalty could be diminished.

The footwear, apparel, and accessories industry is subject to rapid changes in consumer preferences and fashion tastes, which makemakes it difficult to anticipate demand for our products and forecast our financialresults results.of operations. Our success isdepends, drivenin topart, some extent byon brand loyalty, and there can be no assurance that consumers will continue to prefer our brands. Consumer demand for our products depends in partrelies on the continued strength of our brands, which in turn depends on our ability to anticipate, understand, and respond promptly respond to theevolving rapidly changing preferences andpreferences, fashion tastes,trends, as well asand consumer spending patterns,patterns with appealing merchandise.merchandise and effective brand-building initiatives. As our brands and product offerings evolve, it is necessary for our products tomust appeal to an evena broader and more diverse range of consumers whose preferences cannot be predicted with certainty. New footwear models that we introduceproducts may not beachieve successfulmarket withacceptance, including due to pricing that consumers are unwilling to bear, or our brands may fall out of favorfavor, withwhich consumers.could impede our ability to maintain or grow sales, adversely affect brand perception, and negatively impact our results of operations. If we aredo unablenot effectively respond to anticipate,these identify,changes, orwe reactcould appropriatelyexperience toreduced changes in consumer preferences, our revenues may decrease, our brands’ image may suffer, our operating performance may decline,sales and we may not be able to execute our growth plans. Even if we develop and manufacture new footwear products and collaborations that consumers find appealing, their ultimate success may dependpressure on our pricing,gross profit as a percentage of net sales (gross margin), including as a result of reduced pricing power and weincreased mayreliance seton thepromotional prices of new styles too high for the market to bear.activity.

Further, theThe value of our brands is basedalso ondriven by evolving consumer perceptions, including as a result of shifting ethical, politicalpolitical, or social standards,standards. andConcerns concerns with respectrelated to product pricing, quality, design, technical performance, components or materials (including their sustainability), customer service, or customerthe serviceeffectiveness of our brand loyalty initiatives, including loyalty programs, could result in negative perceptionsperceptions, diminished consumer engagement, and thea loss of brand loyalty andor value. These concernsrisks may be exacerbatedamplified by negativeadverse publicity regardingconcerning us or our products, brands, marketing campaigns, partners, or endorsers, particularly where social media and digital marketing channels accelerate the dissemination, amplification, or persistence of negative claims, regardless of their accuracy, which could adversely affectharm our reputation and sales regardless of the accuracy of such claims. Social media and digital marketing campaigns, which accelerate the dissemination of information, can increase the challenges of containing negative claims. If consumers perceive our brands negatively, whether or not warranted, our brand image would become tarnished and our products would become less desirable, which could have a material adverse effect on our business. In addition, actions or statements by third‑party partners, collaborators, or organizations with which we are associated, including in connection with social or political issues, could lead to consumer backlash, operational disruptions, or reputational harm. If our brand-related initiatives, including loyalty programs, fail to drive sustained consumer engagement or incremental demand, or involve increased costs or operational complexity that negatively affect customer perceptions, we could experience reduced sales and pressure on our gross margin, adversely affecting our results of operations.

We sell a significant portion of our products through higher-end specialty and department store retailers,retailers as well as throughand online marketplaces. The businesses of theseThese customers may be adversely affected by factors such as changes in economic conditions, ongoing geopolitical conflicts and uncertainties, fluctuations ininstability, foreign currency exchange rates, failures or instability in the US banking system,fluctuations, reduced consumer demand for premium products, decreaseslimited inaccess availableto credit, and increased competition. If our customers face financial difficulties, it could have an adverse effect on our estimated allowances and reserves, and potentially result in us losing key customers.

If we are unsuccessful at managing productinventory manufacturingplanning, decisionsforecasting, toand offsetglobal thesupply inherentchain seasonality of our business,execution, we may be unable to accurately forecast our inventory and working capital requirements, which may have a material adverse effect on our financial condition and results of operations.

Like other companies in our industry, we have an extended design and manufacturing process, which involves product design, material purchases, inventory accumulation and the subsequent sale of the inventories, and accounts receivable collection. This cycle requires us to incur significant expenses relating to the design, manufacturing, and marketing of our products in advance of the realization of revenue from sales, and results in significant liquidity requirements and working capital fluctuations throughout our fiscal year. Because this cycle involves long lead times,year, which requiremay usbe to make manufacturing decisions months in advance of an anticipated purchasing decisionamplified by thesupplier consumer,performance itissues isand challengingbroader tosupply managechain ourconstraints. inventoryAs a result, these liquidity and working capital requirements.demands Further,may limit our ability to adjust inventory levels and respond efficiently to changes in consumer demand, particularly during periods of macroeconomic uncertainty. Our forecasting processes rely on assumptions, data, and systems that may not accurately reflect future consumer or customer demand, or supply chain disruptionsconditions, including manufacturing capacity, raw material availability, and logistics constraints. Further, variability and constraints within our global supply chain may drive higher inventory procurement positions that could negatively affect our grossworking profitcapital asand a percentage of net sales (gross margin) as a result of selling excess quantities thoughthrough close out channels. Further,As oncea manufacturingresult, decisionsour areinventory made,levels, itworking iscapital difficult to predictrequirements, and timely adjust expenses, accurately forecast our financial results, and meet the expectationsresults of analystsoperations andmay investors,be includingadversely asaffected by a resultnumber of factors, including:

•the effects of unfavorable or unexpected weather patterns onthat affect consumer spending and demand for ourseasonally-driven products, asparticularly the sales of a majority ofwithin our UGG brandbrand, productswhich aremay inherentlybe seasonalintensified andby the effects of climate change may pronounce these conditions;

•changes in consumer preferences, tastes, discretionary spending,spending andpatterns, prevailing fashion trendstrends, and pricing pressure that may require increased promotional activity to sell inventory;

•market acceptance of our current products and newcompeting products,offerings, and ofvariability competitivein products;product availability.

The evolution and expansion of our brands and product offerings have made our inventory management activities more challenging. For example, if we overestimate demand for any products or styles, we may be forced to incurincrease significantpromotional markdownsactivity or adjust pricing to sell excess inventories at reduced prices,inventories, which would result in lower revenuessales and reduced gross margin, and we may not be able to recover our investment in the development of new styles and product lines. On the other hand, if we underestimate demand, or if our independent manufacturing facilities are unable to supply Table of Contents 15 products in sufficient quantities,quantities or on a timely basis, we may experience inventory shortages that may prevent us from fulfilling customer orders or result in usdelays delayingin shipments to customers. If that occurred, we could lose sales, our relationships with customers could be harmed, and our brand loyalty could be diminished. In either event, these factors could have a material adverse effect on our financial condition and results of operations.

We rely upon a broad network of warehouses and distribution facilities to store, sort, package and distribute our products. In the US, we distribute products primarily through self-managed warehouses and DCs in Moreno Valley, California, and in Mooresville, Indiana, which feature a complex warehouse management system that enables us to efficiently pack products for direct shipment to our customers and consumers. We expect our recent domestic warehouse and DC expansion to create long-term capacity for the domestic growth of the UGG and HOKA brands. We could face a significant disruption in our domestic warehouse and DC operations if our warehouse management system does not perform as anticipated or ceases to function for an extended period of time, which could occur due to damage to the facility, failure of software or equipment, cyber-security incidents, power outages or similar problems. InAny addition,significant ifdisruption to our domestic warehouse andor DC operations could adversely affect our ability to fulfill customer orders. In addition, increased reliance on automation, data analytics, and scalingsystem effortsintegrations within our warehouse operations, including to address outdated or no longer supported software, systems and equipment, may increase the risk of system failures, data inaccuracies, or operational disruptions if such systems are impedednot implemented or delayedmaintained for any reason, it could result in shipment delays or the inability to deliver product at all, which would result in lost sales, strain our relationships with customers and consumers, and cause harm to our reputation, any ofeffectively, which could similarly have a material adverse effect on our business.

Internationally, we distribute our products through warehouses and DCs managed by 3PLs in certain international locations. For example, we are currently in the process of transitioning one of ourcertain international 3PLs3PL operations to a new partnerpartner. While we conduct diligence prior to entering into service agreements with an3PLs, upgraded warehouse management system beginning in October 2025. Wewe depend on 3PLsthese providers to manage the operation ofoperate their warehouses and DCs toin meeta manner that meets our business needs,and performance standards, and expectations,requirements, including with respect to data security,security and compliance with applicable data protection and privacy laws, and the provision of quality services on a timely basis at the prices we expect. While we believe we conduct appropriate diligence before entering into service agreements with 3PLs, ifIf our 3PLs fail to manage these responsibilities, including during or following an operational transition, system cutover, or data migration, or if their operations are disrupted as a result of factors outside of their control, such as sanctions that could in the future be imposed on other countries by the US government, or broader disruptions or inefficiencies in global logistics and transportation networks, our distribution operations could face significantdelays, disruption.reduced reliability, or increased costs. The loss of or disruption to the operations of any one or more of these facilities could materially and adversely affect our sales, business performance, and results of operations. Although we believe we possess adequate insurance to cover the potential effect of a disruption to the operations of these facilities, such insurance may not be sufficient to cover all of our potential losses and may not continue to be available to us on acceptable terms, or at all.

We rely upon independent manufacturers for mostall of our production needs, and the failure of these manufacturers to manage these responsibilities would prevent us from filling customer orders, which would result in loss of sales and harm our relationships with customers.

We rely upon independent manufacturers and their respective material suppliers for mostall of our production needs, the majority of which are located in Southeast Asia, predominatelypredominantly in Vietnam,Vietnam and Indonesia, which exposes us to geographic concentration risk, including risks arising from regional economic, political, environmental, or operational conditions, and we do not have direct control over these manufacturers or their suppliers. We expect our independent manufacturers to finance the production of goods ordered, maintain manufacturing capacity, comply with our policies, and store finished goods in a safe location pending shipment. Further,The because mostability of our independent manufacturers areto meet these expectations may be adversely affected by liquidity constraints or limitations in Southeasttheir Asia, we are subjectaccess to risksthird-party associatedfinancing witharrangements naturalsupporting disasters,their epidemics,supply geopolitical tensions,chains or otherworking eventscapital outside of our control affecting the region. If any of these were to occur, we may not be able to timely source raw and other materials, manufacture products, or fill customer orders, or products delivered may not meet our quality standards,needs, which wouldcould reduce available production capacity, delay shipments, or result in lost salessales. Disruptions arising from these geographic concentrations, our limited control over independent manufacturers and harmtheir suppliers, or our manufacturers’ inability to meet these expectations could adversely affect our relationshipsability withto customers.manufacture products or fulfill customer orders, which could negatively affect our results of operations.

ThereOur candependence beon noa assurancelimited number of akey long-term,manufacturing uninterruptedpartners supplymay of products fromincrease our independentexposure manufacturers.to disruptions, pricing changes, or capacity constraints. While we have long-standing relationships with most of these manufacturers, they could terminate our engagement, seek to increase their prices, or extract other concessions from us, and we may not be able to timely engage a suitable alternative. If we are required to find alternative manufacturers, we could experience manufacturing delays, increased manufacturing costs, and substantial disruption to our business, any of which could negatively affect our results of operations.

Our financial success is influenced by the success of our customers, and the loss of a key customer could have a material adverse effect on our financial condition and results of operations.

Much of our financial success is related to the ability of our customers,customers whichin includethe ourwholesale retailerchannel, including international distributors and distributorretail partners, to successfullyeffectively market and sell our brands to consumers. These relationships are typically governed by contractual arrangements. If a customer fails to satisfymeet contractual obligationsobligations, or meetsatisfy our expectations,expectations and standards, or experiences operational issues,or financial difficulties, it may be difficultchallenging and time-consuming to locateidentify and transition to an acceptable alternative. AnyIn disruptionaddition, todisputes under these relationshipsarrangements maycould result in increasedlitigation, costsarbitration, settlement costs, or lossoperational of customers. In addition, there is no guarantee a new customer will generate results that are more favorable than the terminated party.disruptions.

We depend on qualified talent and, if we are unable to retain or hire executive officers, key employees, and skilled talent, we may not be able to achieve our strategic objectives, andwhich could adversely affect our results of operations may be adversely impacted.operations.

To execute our growth plan, we must continue to attract and retain highly qualified talent, including executive officers and key employees. Further,In to continueaddition, to develop new products and successfully operate and grow our key business processes, itwe isrely importanton foremployees uswith tospecialized continueexpertise hiring and retaining talent in highly skilled footwear, apparel and accessoriesacross design, marketing, merchandising, sourcing, technology, operations, and support functions.functions, including talent in areas such as data analytics, digital commerce, and supply chain management. Competition for executive officers, key employees, and skilled talent is intense within our industryindustry, and therewe continuescontinue to beexperience upward pressure on the compensation paid to these professionals.costs. Changes to our Table of Contents 17 office environment or work models may not meet our employees’ expectations.expectations, Manyand many of the companies with which we compete for experienced talent have greater name recognition and financial resources than we have. Further, continuedContinued strength ofin our results may resultalso inincrease otherthe companiesrisk and competitors perceivingthat our employees asare moretargeted desirable.by competitors. If our overall employment propositionproposition, including compensation, benefits, culture, work model, or career development opportunities, is not perceived as favorable comparedrelative to other companies’, it could negatively affectemployers, our ability to attract, hire, and retain ourqualified employees.personnel could be adversely affected. We are committed to offering competitive compensation and benefits to employees across our business to positively affect attrition,benefits, which impactsmay increase our selling, general, and administrative (SG&A) expenses. OurFurther, our domestic headquarters are located in Goleta, California, which ismay notfurther generallylimit recognizedour as a prominent commercial center, and it is difficultability to attract qualified professionals due to our location. If we hire employees from competitors, their former employers may assert that we or these employees have breached legal obligations, resulting in a diversion of our time and resources. In addition, prospective and existing employees often consider the value of the stock-based compensation when deciding whether to take a job. If our stock price is volatile, it may adversely affect our ability to recruit and retain qualified talent and we may be unable to achieve our long-term strategic objectives, our results of operations may suffer, and it may damage our reputation as a preferred employer, which would challenge our ability to effectively compete across the global labor market.professionals.

The continued service of our executive officers and key employees is particularly important, and the departure of such talent may disrupt our business or result in the depletion of significant institutional knowledge. Our executive officers and key employees are employed on an at-will basis, which means that they can terminate their employment with us at any time. The loss of one or more of our executive officers or other key employees or significant turnover in our senior management, and the often-extensive process of identifying and hiring other talent to fill those key positions, could have a material adverse effect on our business.results of operations.

WeSheepskin useand sheepskinother raw materials are used to manufacture a significant portion of our products, and ifdisruptions wein arethe unableavailability, topricing, obtain sufficient sheepskin at acceptable prices that meets ouror quality expectations,standards orof ifthese there are legal or social impediments to our ability to use sheepskin, itinputs could have a material adverse effect on our business.

We rely on technical innovation to compete in the market for our products.products, and if we fail to innovate effectively or in a timely manner, our competitive position and results of operations could be adversely affected.

Our success relies in part on our continued innovation in both the materials we use and the design of our footwear. In particular, our HOKA brand maintains its competitiveness through continuous product innovation and timely introduction of new features and technologies that align with current and emerging consumer expectations.expectations, including our ability to bring such innovations to market ahead of or in line with competitors. Also, we continue to invest in research and development to increasingly incorporate recycled, renewable, regenerated, and certified/ natural materials (preferred materials) in our products as part of our sustainability efforts. We also increasingly use preferred synthetics, preferred regenerated or synthetic cellulosic fibers, and preferred plant fibers. Although we continue to refine our materials and develop new properties for specific applications, if we fail to introduce technical innovation in our products in a timely or commercially successful manner, or experience issues with the quality of our products or materials, consumer demand for our products could decline and we may experience reputational damage. In addition, if our competitors introduce superior or more cost-effective innovations, we may lose market share or be required to increase promotional activity to remain competitive. Further, as our brands transition to suppliers with recycled, renewable, regenerated, and certified/natural materials (preferred materials),materials, we may be subject to increased costs or supply constraints, which could reduce our sales and profitability and have a material adverse effect on our financial condition and results of operations. Our investments in research and development and new materials may not result in commercially successful products or may not generate the expected return on investment, which could adversely affect our results of operations.

The following discussion of our financial condition and results of operations should be read together with our consolidated financial statements in Part IV within this Annual Report. This discussion includes an analysis of our financial condition and results of operations for the years ended March 31, 2025, 2024,2026, and 20232025 and year-over-year comparisons between those periods. For an analysis of our financial condition and results of operations for the years ended March 31, 2025, and 2024 and year-over-year comparisons between those periods, refer to Part II,

Certain statements made in this section constitute “forward-looking statements,” which are subject to numerous risks and uncertainties. Our actual results of operations may differ materially from those expressed or implied by these forward-looking statements as a result of many factors, including those set forth in the section titled “Cautionary Note Regarding Forward-Looking Statements” and Part I, Item 1A, “Risk Factors,” within this Annual Report.

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

We are a global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories developed for both everyday casual lifestyle use and high-performance activities. We market our products primarily under five proprietary brands: UGG, HOKA, Teva, AHNU, and Koolaburra. Our brands compete across the fashion and casual lifestyle, performance, running, and outdoor markets. We believe our products are distinctive and appeal to a broad demographic. Our brands sell our products through quality domestic and international retailers,retailers and international distributors,distributors in our wholesale channel, and directly to global consumers through our DTC channel, which is comprised of an e‑commerce and retail store presence. We seek to differentiate our brands and products by offering diverse lines that emphasize fashion, performance, authenticity, functionality, quality, and comfort, and products tailored to a variety of activities, seasons, and demographic groups. Independent third-party contractors manufacture all of our products.

Consolidated financial performance highlights for fiscal year 2025,2026 (current period), compared to fiscal year 20242025 (the prior period), were as follows:

▪OtherUGG brandsbrand net sales decreasedincreased 8.6%8.2% to $221,171.$2,738,758.

•IncomeGross from operationsprofit as a percentage of net sales (operatinggross margin) increaseddecreased 20020 basis points to 23.6%.57.7%.

We expect ourOur business and industry willare continuesubject to be impacted by several important trends and uncertainties, including the following:

•Macroeconomic factors, including inflationary pressures, increased tariffs, geopoliticalrising unrest,supply andchain costs, high interest rates, foreign currency exchange rate volatility, escalating global conflicts, changes in discretionary spending, and recession risks, are creating a complex and challenging environment for our business and industry.industry that may continue to pressure our results of operations, including our gross margin. For example, prolonged or escalating conflicts in the Middle East could disrupt our supply chain and increase energy, transportation, and commodity costs, as well as cause shipping delays. While these factors did not materially impact our business or results of operations during fiscal year 2025, the fullcurrent impactperiod, of these factors is difficult to quantify andthey could negatively impactaffect us in future periods.

Brand and Omni-ChannelOmnichannel Strategy

•We remainare focused on increasing global consumer awarenessawareness, cultural relevance, and adoption of our brands, which has continuedcontributed positively to positively impact our financialresults results.of operations. Our effortsglobal brand growth strategy seeks to drive brand adoption are focused on building brand acceptance and heat through launches of innovative product offerings,innovation coupled withand marketing investments across multiple geographic marketsgeographies and channelschannels, ofwhile distribution,enhancing includingthe strategiccustomer experience through category expansion ofand theloyalty-driven global marketplace.engagement.

•WeDuring continuethe current period, promotional activity slightly increased compared to implementexceptionally alow marketplacelevels inventoryin managementthe strategyprior forperiod; our brands through segmentation and differentiation. During fiscal year 2025,however, we continued to experienceachieve alignmenthigh onlevels of full-price sell through by aligning product assortments thatwith resultedmarketplace indemand. higherThese full-priceefforts sell-through,contributed whichto benefitedlargely maintaining our gross marginsmargin across all channels of distribution. While gross margins continuecompared to bethe anprior areaperiod, ofeven strategicas focus,the weretail environment became more promotional. We may not experiencerealize these benefits to oursimilar gross marginsmargin benefits in our fiscal year ending March 31, 20262027 (next fiscal year) due to various factors, including impacts fromthe macroeconomic and geopolitical factors,factors discussed above,above asand well asthe potential impactsimpact from our pricing strategies.

•Our long-term strategy remainsis focusedto on buildinggrow our DTC channel to represent ana increasedlarger proportionportion of our total net sales,sales which includesby differentiating the consumer experience fromrelative to the wholesale channel toand drivedriving increases inconsumer acquisition and retentionretention. toWe sustainare stronginvesting marketin positionse-commerce platform upgrades, data analytics, consumer experience initiatives, and aselective highglobal levelretail ofstore demand for our brands.expansion. We expect increasedgrowth in our DTC channel’s net sales in the DTC channel willto continue to positively impact our gross margins.margin; However,however, as we also seek to expand doorsdistribution with wholesale partners to drive brand awareness and Table of Contents 34 market share in the near-term,share, our wholesale channel may represent a higherlarger portion of our total net sales in certain periods, which could pressure ourgross marginsmargin in those periods.

•We continueare to implement our internationalpursuing growth strategies for the HOKA brand and UGG brandsbrand to grow international sales to represent ana increasedlarger proportionportion of our total net sales. We continue to selectively expand our HOKA brand presence through additional locations with our wholesale partnerspartner locations and targeted DTC channel retail store expansion within our DTC channel.expansion. We are also continue to investinvesting in certain regions that provide influential market presence to build brand awareness, including through the launch of our US HOKA brand awareness,loyalty andprogram weduring fiscal year 2026. We expect to continue making these investments, includinginvesting in our next fiscal year. We continue to emphasize elevating the customerUGG experience for our brands through category expansionbrand and collaborations.HOKA brand global loyalty programs.

•To support our growing business,growth, we continue to invest in our network of global warehouses,distribution network, including our warehouses and DCs, andas 3PLs,well whichas have fixed and variable costs, with variable costs changing relative to changes in net sales.3PLs. We also continue to diversify our third-partyindependent manufacturers and the regions in which they operate.operate; Wehowever, we maintain a significant concentration of sourcing and manufacturing in Southeast Asia. In addition, we are currently negotiating the transition oftransitioning one of our international 3PLs to a new partnerpartner, withwhich anmay upgradedcreate warehousetemporary managementoperational system during our next fiscal year.risks. We expect to continue toupgrading investour inglobal anddistribution build upon these infrastructure capabilitiesnetwork to continue meeting customer and consumer demand.

As of March 31, 2025,2026, our three reportable operating segments include the worldwide operations of the UGGHOKA brand, HOKAUGG brand, and Other brands. Information reported to the CODM, who is our Principal Executive Officer (PEO), is organized into these reportable operating segments and is consistent with how the CODM evaluates our performance and allocates resources.

UGG Brand. The UGG brand is one of the most iconic and recognized footwear brands in our industry, which highlights our successful track record of building niche brands into lifestyle andconsumer-focused fashion lifestyle market leaders. Born on the California coast to warm surfers after they caught and rode the waves, we create iconic products and experiences that are made for people to feel comfort, softness, warmth, and confidence. With loyal consumers around the world, Table of Contents 35 innovative products, and elevated storytelling, the UGG brand has proven to be a highly resilient consumer-focused line of premium footwear, apparel, and accessories that has driven both domestic and international sales growth with year-round product offerings that appeal to a growing global audience and a broad demographic.

•Successful acquisition of a diverse global consumer base, and in particular focusing on key markets, through strategic marketing activations and collaborations that resonate with a fashionable consumer.

•High consumer brand loyalty due to elevated brand experiences and consistent delivery of crafted; purposefully built and luxuriously comfortable footwear, apparel, and accessories.

•ThoughtfulContinued expansion of our apparel and accessories businesses.

Other Brands. Other brands consist primarily of the Teva brand, AHNU brand, and Koolaburra brand. The Teva brand’s products are built for a range of outdoor pursuits and include a variety of footwear options, from classic sandals and shoes to boots. The AHNUOther brand’sbrands footwearreportable productsoperating fusesegment high-performanceincludes technologyfinancial withresults timelessof style crafted for everyday wear. Thethe Koolaburra brand and AHNU brand, for which wethe are phasingphase out of standalone operations bywere completed during the endthird and fourth quarters of calendarfiscal year 2025,2026, isas awell casualas footwearfinancial results for the former Sanuk brand thatduring usesthe plushprior materialsperiod through the sale date of August 15, 2024 (Sanuk Brand Sale Date). Refer to targetthe value-orientedsection consumers.titled “Reportable Operating Segments” in Note 1, “General,” of our consolidated financial statements in Part IV within this Annual Report for further information.

We disclose supplemental financial measures calculated and presented in accordance with generally accepted accounting principles in the United States (US GAAP); however, throughout this Annual ReportReport, including within our consolidated financial statements, we provide certain financial information on a non-GAAP basis (non-GAAP financial measures). We provide non-GAAP financial measures to provideand information that may assist investors in understanding our results of operations and assessing our prospects for future performance, which primarily consist of certain constant currency measures.measures Weand believetotal evaluating certainsegment-level financial and operating measures on a constant currency basis is important as it excludes the impact of foreign currency exchange rate fluctuations that are not indicative of our core results of operations and are largely outside of our control. However, our non-GAAP financial measures are not intended to represent and should not be considered more meaningful measures than, or alternatives to, measures of financial or operating performance as determined in accordance with US GAAP.information.

We believe presenting certain financial and operating measures on a constant currency basis is important as it excludes the impact of foreign currency exchange rate fluctuations that are not indicative of our core results of operations and are largely outside of our control. We calculate our constant currency non-GAAP financial measures for current period financial information, such as total net sales using the foreign currency exchange rates that were in effect during the previous comparable period, excluding the effects of foreign currency exchange rate hedges and remeasurements in the consolidated financial statements. We also report comparable DTC sales on a constant currency basis for DTC operations that were open throughout the current and prior reporting periods, and we may adjust prior reporting periods to conform to current yearperiod accounting policies. The information presented on a constant currency basis, as we present such information, may not necessarily be comparable to similarly titled information presented by other companies, and may not be appropriate measures for comparing our performance relative to other companies. Constant currency measures should not be considered in isolationisolation, or as an alternative to US dollar measures that reflect current period foreign currency exchange rates or to other financial or operating measures presented in accordance with US GAAP.

During the three months ended DecemberJune 31,30, 2025,2026, there were no material changes to the risks and uncertainties described in Part I, Item 1A, “Risk Factors,” of our 20252026 Annual Report.

The following discussion of our financial condition and results of operations should be read together with our condensed consolidated financial statements and the related notes included in Part I, Item 1, “Financial Statements,” within this Quarterly Report, and the audited consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of our 2025 Annual Report, filed with the SEC on May 23, 2025, which is available free of charge on the SEC’s website at www.sec.gov and our website at ir.deckers.com.

Certain statements made in this section constitute “forward-looking statements,” which are subject to numerous risks and uncertainties. Our actual results of operations may differ materially from those expressed or implied by these forward-looking statements as a result of many factors, including those set forth in the section titled “Cautionary Note Regarding Forward-Looking Statements” and Part II, Item 1A, “Risk Factors,” within this Quarterly Report.

We are a global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories developed for both everyday casual lifestyle use and high-performance activities. OurWe fivemarket our products primarily under three proprietary brands include: HOKA, UGG, Teva, Koolaburra, and AHNU. Refer to the section titled “Reportable Operating Segments,” in Note 1, “General,” of our condensed consolidated financial statements in Part I, Item 1 within this Quarterly Report, for further information on the phase out of standalone operations of the Koolaburra and AHNU brands.Teva.

Our brands compete across the fashion and casual lifestyle, performance, running, and outdoor markets. We believe our products are distinctive and appeal to a broad demographic. Our brands sell our products through quality domestic and international retailers and international distributors in our wholesale channel, and directly to global consumers through our DTC channel, which is comprised of an e-commerce and retail store presence. We seek to differentiate our brands and products by offering diverse lines that emphasize fashion, performance, authenticity, functionality, quality, and comfort, and products tailored to a variety of activities, seasons, and demographic groups. Independent third-party contractors manufacture all of our products.

Consolidated financial performance highlights for the ninethree months ended DecemberJune 31,30, 2025,2026, compared to the prior period, were as follows:

•Gross margin decreasedincreased 5060 basis points to 57.7%.56.4%.

•Income from operations increaseddecreased 10.0%6.0% to $1,106,174.$155,301.

WeOther expectFactors. ourOur business and industry willare continuesubject to beseveral impacted by severaladditional important trends and uncertainties, which have not materially changed from those described in our 20252026 Annual Report. Refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our 20252026 Annual Report for further discussion. Refer to Part I, Item 1A, “Risk Factors,” of our 20252026 Annual Report for detailed information on the risks and uncertainties that may cause our actual results to differ materially from our expectations.

As of DecemberJune 31,30, 2025,2026, our three reportable operating segments include the worldwide operations of the HOKA brand, UGG brand, and Other brands.

HOKA Brand. The HOKA brand is an authentic premium line of year-round performance footwear, which offers enhanced cushioning and inherent stability with minimal weight. Originally designed for ultra-runners, the brand now appeals to world champions, taste makers,tastemakers, and everyday athletes. ExpandedExpansion into additional product categories, elevated marketing campaigns, and investments in brand experiences, coupled with strategic marketplace presence; have fueled both domestic and international sales growth of the HOKA brand, which has quickly become a leading brand within run and outdoor specialty wholesale accounts and is growing across its global marketplace. The HOKA brand’s product line includes running, trail, hiking, fitness, and lifestyle footwear offerings, as well as select apparel and accessories.

UGG Brand. The UGG brand is one of the most iconic and recognized footwear brands in our industry, which highlights our successful track record of building niche brands into lifestyle and fashion market leaders. Born on the California coast to warm surfers after they caught and rode the waves, we create iconic products and experiences that are made for people to feel comfort, softness, warmth, and confidence. With loyal consumers around the world, innovative products, and elevated storytelling, the UGG brand has proven to be a highly resilient consumer-focused line of premium footwear, apparel, and accessories that has driven both domestic and international sales growth with year-round product offerings that appeal to a growing global audience and a broad demographic.

Other Brands. Other brands consist primarily of the Teva brand, Koolaburra brand, and AHNU brand. The Teva brand’s products are built for a range of outdoor pursuits and include a variety of footwear options, from classic sandals and shoes to boots.

ReferThe toOther brands reportable operating segment includes financial results of brands for which standalone operations have been phased out in the prior fiscal year as described in the section titled “Reportable Operating Segment Overview,” in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our 20252026 Annual Report for further discussion of our reportable operating segments.Report.

We disclose supplemental financial measures calculated and presented in accordance with US GAAP; however, throughout this Quarterly ReportReport, including within our condensed consolidated financial statements, we provide certain financial information on a non-GAAP basis (non-GAAP financial measures). We provide non-GAAP financial measures to provideand information that may assist investors in understanding our results of operations and assessing our prospects for future performance, which primarily consist of certain constant currency measures.measures Weand believetotal evaluating certainsegment-level financial and operating measures on a constant currency basis is important as it excludes the impact of foreign currency exchange rate fluctuations that are not indicative of our core results of operations and are largely outside of our control. However, our non-GAAP financial measures are not intended to represent and should not be considered more meaningful measures than, or alternatives to, measures of financial or operating performance as determined in accordance with US GAAP.information.

We believe presenting certain financial and operating measures on a constant currency basis is important as it excludes the impact of foreign currency exchange rate fluctuations that are not indicative of our core results of operations and are largely outside of our control. We calculate our constant currency non-GAAP financial measures for current period financial information, such as total net sales using the foreign currency exchange rates that were in effect during the previous comparable period, excluding the effects of foreign currency exchange rate hedges and remeasurements in the condensed consolidated financial statements. We also report comparable DTC sales on a constant currency basis for DTC operations that were open throughout the current and prior reporting periods, and we may adjust prior reporting periods to conform to current yearperiod accounting policies. The information presented on a constant currency basis, as we present such information, may not necessarily be comparable to similarly titled information presented by other companies, and may not be appropriate measures for comparing our performance relative to other companies. Constant currency measures should not be considered in isolationisolation, or as an alternative to US dollar measures that reflect current period foreign currency exchange rates or to other financial or operating measures presented in accordance with US GAAP.

Three Months Ended DecemberJune 31,30, 2025,2026, Compared to Three Months Ended DecemberJune 31,30, 2024.2025. Results of operations were as follows:

(1) The Other brands reportable operating segment for the threeprior months ended December 31, 2025period includes financial results for the phase out of the Koolaburra brand and AHNU brands through their respective phase out dates.brand. Refer to the section titled “Reportable Operating Segments,” in Note 1, “General,” of our condensed consolidated financial statements in Partour I,2026 ItemAnnual 1 within this Quarterly Report,Report for further information regarding the phase out of standalone operations of the Koolaburra and AHNU brands.information.

Total net sales increased primarily due to higher net sales for the HOKA brand and UGG brands across all channels,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 OtherUGG brandsbrand decreasedincreased primarily due to lowerhigher USglobal net sales inlargely thebalanced wholesaleacross channelboth drivenchannels, with international sales leading growth, supported by thehigher phasedomestic out of standalone operations of the Koolaburra brand.sales.

•Comparable DTC channel net sales for the 13 weeks ended DecemberJune 28, 2025,2026, increased by 7.3%,6.8%, compared to the prior period.

•We experienced ana increasedecrease of 4.8%1.4% in the total volume of units sold to 26,10014,500 from 24,900,14,700, compared to the prior period. Units sold include all categories such as footwear, apparel, accessories, home goods, and care kits.kits across all brands. Percentages may not calculate on rounded units. The prior period includes units sold by brands phased out in the prior fiscal year.

•Increased other SG&A expenses of approximately $14,500,$11,800, primarily due to higher sales commissions, IT expenses, 3PL service fees, credit card fees,expenses and othersales miscellaneous expenses; partially offset by lower bad debt expenses.commissions. The increase in other SG&A expenses was comprised of approximately $7,500 of unallocated enterprise and shared brand expenses and approximately $7,000$7,400 of expenses specific to our brands, primarily for the HOKA brand and UGG brands.brand, as well as approximately $4,400 of unallocated enterprise and shared brand expenses.

•Increased rentadvertising, marketing, and occupancypromotion expenses of approximately $6,300,$10,300, primarily due to higher rentpromotional marketing expenses for investmentsthe inHOKA ourbrand and UGG brand to drive global retailbrand storeawareness footprint.and market share gains, highlight new product categories, and provide localized marketing.

•DecreasedIncreased net foreign currency-related remeasurement losses recorded in unallocated enterprise and shared brand expenses of approximately $16,100,$5,800, primarily due to more favorableunfavorable changes in European,Asian, Asian,Canadian, and CanadianEuropean foreign currency exchange rates against the US dollar.

(1) The Other brands reportable operating segment for the threeprior months ended December 31, 2025period includes financial results for the phase out of the Koolaburra brand and AHNU brands through their respective phase out dates.brand. Refer to the section titled “Reportable Operating Segments,” in Note 1, “General,” of our condensed consolidated financial statements in Partour I,2026 ItemAnnual 1 within this Quarterly Report,Report for further information regarding the phase out of standalone operations of the Koolaburra and AHNU brands.information.

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

•The decreaseincrease in unallocated enterprise and shared brand expenses was primarily due to higher net foreign currency-related remeasurement gainslosses, andas payrollwell efficiencies for our owned warehouses and DCs, partially offset byas higher other SG&A expenses primarilydriven due to legal expenses,by IT expenses, partially offset by lower variable 3PL service fees, along with lower depreciation and otherrelated miscellaneous expenses.costs.