COVER PAGE
COVER PAGE - shares | 6 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-36436 | |
Entity Registrant Name | DECKERS OUTDOOR CORP | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-3015862 | |
Entity Address, Address Line One | 250 Coromar Drive | |
Entity Address, City or Town | Goleta | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 93117 | |
City Area Code | 805 | |
Local Phone Number | 967-7611 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | DECK | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 27,976,092 | |
Entity Central Index Key | 0000910521 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Mar. 31, 2019 |
ASSETS | ||
Cash and cash equivalents | $ 177,673 | $ 589,692 |
Trade accounts receivable, net of allowances ($13,540 and $18,824 as of September 30, 2019 and March 31, 2019, respectively) | 334,601 | 178,602 |
Inventories, net of reserves ($10,949 and $9,723 as of September 30, 2019 and March 31, 2019, respectively) | 558,875 | 278,842 |
Prepaid expenses | 23,334 | 19,901 |
Other current assets | 35,055 | 26,028 |
Income tax receivable | 5,493 | 2,340 |
Total current assets | 1,135,031 | 1,095,405 |
Property and equipment, net of accumulated depreciation ($250,885 and $235,939 as of September 30, 2019 and March 31, 2019, respectively) | 212,323 | 213,796 |
Operating lease assets | 227,988 | |
Goodwill | 13,990 | 13,990 |
Other intangible assets, net of accumulated amortization ($73,061 and $71,186 as of September 30, 2019 and March 31, 2019, respectively) | 49,284 | 51,494 |
Deferred tax assets, net | 31,253 | 30,870 |
Other assets | 21,790 | 21,651 |
Total assets | 1,691,659 | 1,427,206 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Short-term borrowings | 13,599 | 603 |
Trade accounts payable | 313,387 | 124,974 |
Accrued payroll | 28,650 | 54,462 |
Operating lease liabilities | 48,944 | |
Other accrued expenses | 40,213 | 47,963 |
Income taxes payable | 13,947 | 19,283 |
Value added tax payable | 7,107 | 3,239 |
Total current liabilities | 465,847 | 250,524 |
Mortgage payable | 30,592 | 30,901 |
Long-term operating lease liabilities | 201,578 | |
Income tax liability | 62,180 | 60,616 |
Deferred rent obligations | 21,107 | |
Other long-term liabilities | 15,158 | 18,928 |
Total long-term liabilities | 309,508 | 131,552 |
Commitments and contingencies | ||
Stockholders' equity | ||
Common stock ($0.01 par value; 125,000 shares authorized; shares issued and outstanding of 27,975 and 29,141 as of September 30, 2019 and March 31, 2019, respectively) | 280 | 291 |
Additional paid-in capital | 184,557 | 178,227 |
Retained earnings | 756,264 | 889,266 |
Accumulated other comprehensive loss | (24,797) | (22,654) |
Total stockholders' equity | 916,304 | 1,045,130 |
Total liabilities and stockholders' equity | $ 1,691,659 | $ 1,427,206 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Mar. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowances | $ 13,540 | $ 18,824 |
Inventory reserves | 10,949 | 9,723 |
Accumulated depreciation | 250,885 | 235,939 |
Accumulated amortization | $ 73,061 | $ 71,186 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares (in shares) | 125,000,000 | 125,000,000 |
Common stock, issued shares (in shares) | 27,975,000 | 29,141,000 |
Common stock, outstanding shares (in shares) | 27,975,000 | 29,141,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 542,205 | $ 501,913 | $ 819,044 | $ 752,507 |
Cost of sales | 269,181 | 250,026 | 416,001 | 385,655 |
Gross profit | 273,024 | 251,887 | 403,043 | 366,852 |
Selling, general and administrative expenses | 175,893 | 161,475 | 337,329 | 315,854 |
Income from operations | 97,131 | 90,412 | 65,714 | 50,998 |
Interest income | (1,530) | (814) | (4,396) | (2,400) |
Interest expense | 1,524 | 1,640 | 2,670 | 2,874 |
Other income, net | (86) | (189) | (178) | (200) |
Total other (income) expense, net | (92) | 637 | (1,904) | 274 |
Income before income taxes | 97,223 | 89,775 | 67,618 | 50,724 |
Income tax expense | 19,413 | 15,403 | 9,159 | 6,759 |
Net income | 77,810 | 74,372 | 58,459 | 43,965 |
Other comprehensive income (loss), net of tax | ||||
Unrealized gain (loss) on cash flow hedges | 1,497 | 1,180 | ||
Unrealized gain (loss) on cash flow hedges | (1,197) | 4,126 | ||
Foreign currency translation loss | (3,391) | (3,861) | (3,323) | (11,324) |
Total other comprehensive loss | (1,894) | (5,058) | (2,143) | (7,198) |
Comprehensive income | $ 75,916 | $ 69,314 | $ 56,316 | $ 36,767 |
Net income per share | ||||
Basic (in dollars per share) | $ 2.73 | $ 2.49 | $ 2.03 | $ 1.46 |
Diluted (in dollars per share) | $ 2.71 | $ 2.48 | $ 2.01 | $ 1.45 |
Weighted-average common shares outstanding | ||||
Basic (in shares) | 28,483 | 29,849 | 28,785 | 30,134 |
Diluted (in shares) | 28,705 | 30,028 | 29,039 | 30,327 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Mar. 31, 2018 | 30,447,000 | ||||
Beginning balance at Mar. 31, 2018 | $ 940,779 | $ 304 | $ 167,587 | $ 785,871 | $ (12,983) |
Increase (Decrease) in Stockholders' Equity | |||||
Stock compensation expense (in shares) | 2,000 | ||||
Stock compensation expense | 3,526 | 3,526 | |||
Shares issued upon vesting (in shares) | 6,000 | ||||
Shares issued upon vesting | 0 | ||||
Shares withheld for taxes | (328) | (328) | |||
Repurchases of common stock (in shares) | (86,000) | ||||
Repurchases of common stock | (9,999) | $ 0 | (9,999) | ||
Net income (loss) | (30,407) | (30,407) | |||
Total other comprehensive loss | (2,140) | (2,140) | |||
Ending balance (in shares) at Jun. 30, 2018 | 30,369,000 | ||||
Ending balance at Jun. 30, 2018 | 902,151 | $ 304 | 170,785 | 746,185 | (15,123) |
Beginning balance (in shares) at Mar. 31, 2018 | 30,447,000 | ||||
Beginning balance at Mar. 31, 2018 | 940,779 | $ 304 | 167,587 | 785,871 | (12,983) |
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 43,965 | ||||
Total other comprehensive loss | (7,198) | ||||
Ending balance (in shares) at Sep. 30, 2018 | 29,371,000 | ||||
Ending balance at Sep. 30, 2018 | 846,787 | $ 294 | 171,094 | 695,580 | (20,181) |
Beginning balance (in shares) at Jun. 30, 2018 | 30,369,000 | ||||
Beginning balance at Jun. 30, 2018 | 902,151 | $ 304 | 170,785 | 746,185 | (15,123) |
Increase (Decrease) in Stockholders' Equity | |||||
Stock compensation expense (in shares) | 2,000 | ||||
Stock compensation expense | 3,926 | 3,926 | |||
Shares issued upon vesting (in shares) | 65,000 | ||||
Shares issued upon vesting | 475 | $ 1 | 474 | ||
Shares withheld for taxes | (4,091) | (4,091) | |||
Repurchases of common stock (in shares) | (1,065,000) | ||||
Repurchases of common stock | (124,736) | $ (11) | (124,725) | ||
Net income (loss) | 74,372 | 74,372 | |||
Total other comprehensive loss | (5,058) | (5,058) | |||
Ending balance (in shares) at Sep. 30, 2018 | 29,371,000 | ||||
Ending balance at Sep. 30, 2018 | 846,787 | $ 294 | 171,094 | 695,580 | (20,181) |
Beginning balance (in shares) at Mar. 31, 2019 | 29,141,000 | ||||
Beginning balance at Mar. 31, 2019 | 1,045,130 | $ 291 | 178,227 | 889,266 | (22,654) |
Increase (Decrease) in Stockholders' Equity | |||||
Stock compensation expense (in shares) | 1,000 | ||||
Stock compensation expense | 3,424 | 3,424 | |||
Shares issued upon vesting (in shares) | 4,000 | ||||
Shares issued upon vesting | 0 | ||||
Exercise of stock options (in shares) | 46,000 | ||||
Exercise of stock options | 2,773 | $ 1 | 2,772 | ||
Shares withheld for taxes | (374) | (374) | |||
Repurchases of common stock (in shares) | (227,000) | ||||
Repurchases of common stock | (35,005) | $ (2) | (35,003) | ||
Net income (loss) | (19,351) | (19,351) | |||
Total other comprehensive loss | (249) | (249) | |||
Ending balance (in shares) at Jun. 30, 2019 | 28,965,000 | ||||
Ending balance at Jun. 30, 2019 | 995,279 | $ 290 | 184,049 | 833,843 | (22,903) |
Beginning balance (in shares) at Mar. 31, 2019 | 29,141,000 | ||||
Beginning balance at Mar. 31, 2019 | $ 1,045,130 | $ 291 | 178,227 | 889,266 | (22,654) |
Increase (Decrease) in Stockholders' Equity | |||||
Repurchases of common stock (in shares) | (1,296,201) | ||||
Repurchases of common stock | $ (190,405) | ||||
Net income (loss) | 58,459 | ||||
Total other comprehensive loss | (2,143) | ||||
Ending balance (in shares) at Sep. 30, 2019 | 27,975,000 | ||||
Ending balance at Sep. 30, 2019 | 916,304 | $ 280 | 184,557 | 756,264 | (24,797) |
Beginning balance (in shares) at Jun. 30, 2019 | 28,965,000 | ||||
Beginning balance at Jun. 30, 2019 | 995,279 | $ 290 | 184,049 | 833,843 | (22,903) |
Increase (Decrease) in Stockholders' Equity | |||||
Stock compensation expense (in shares) | 3,000 | ||||
Stock compensation expense | 5,075 | 5,075 | |||
Shares issued upon vesting (in shares) | 73,000 | ||||
Shares issued upon vesting | 618 | $ 1 | 617 | ||
Exercise of stock options (in shares) | 3,000 | ||||
Exercise of stock options | 186 | 186 | |||
Shares withheld for taxes | (5,370) | (5,370) | |||
Repurchases of common stock (in shares) | (1,069,000) | ||||
Repurchases of common stock | (155,400) | $ (11) | (155,389) | ||
Net income (loss) | 77,810 | 77,810 | |||
Total other comprehensive loss | (1,894) | (1,894) | |||
Ending balance (in shares) at Sep. 30, 2019 | 27,975,000 | ||||
Ending balance at Sep. 30, 2019 | $ 916,304 | $ 280 | $ 184,557 | $ 756,264 | $ (24,797) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
OPERATING ACTIVITIES | ||
Net income | $ 58,459 | $ 43,965 |
Reconciliation of net income to cash used in operating activities: | ||
Depreciation, amortization and accretion | 19,966 | 22,134 |
Loss on extinguishment of debt | 0 | 445 |
Bad debt expense | 976 | 2,394 |
Deferred tax benefit | (412) | (2,009) |
Stock-based compensation | 8,401 | 7,362 |
Employee stock purchase plan | 96 | 90 |
Excess tax benefits from stock-based compensation | (2,004) | (1,336) |
Loss (gain) on disposal of property and equipment | 391 | (94) |
Impairment of intangible and other long-lived assets | 123 | 0 |
Restructuring charges | 0 | 295 |
Changes in operating assets and liabilities: | ||
Trade accounts receivable, net | (156,975) | (158,883) |
Inventories, net | (280,032) | (227,257) |
Prepaid expenses and other current assets | (15,049) | (4,965) |
Income tax receivable | (3,152) | 445 |
Net operating lease assets and liabilities | (817) | |
Other assets | (139) | 1,722 |
Trade accounts payable | 188,413 | 183,638 |
Accrued expenses | (31,056) | (27,928) |
Income taxes payable | (3,331) | 1,921 |
Long-term liabilities | (14) | (2,675) |
Net cash used in operating activities | (216,156) | (160,736) |
INVESTING ACTIVITIES | ||
Purchases of property and equipment | (14,944) | (14,091) |
Proceeds from sale of property and equipment, net | 240 | 68 |
Net cash used in investing activities | (14,704) | (14,023) |
FINANCING ACTIVITIES | ||
Proceeds from short-term borrowings | 29,463 | 108,001 |
Repayments of short-term borrowings | (16,000) | (37,000) |
Debt issuance costs on short-term borrowings | 0 | (1,276) |
Proceeds from issuance of stock for employee stock purchase plan | 618 | 475 |
Proceeds from exercise of options | 2,959 | 0 |
Repurchase of common stock | (190,405) | (134,735) |
Cash paid for shares withheld for taxes | (5,744) | (4,590) |
Repayment of mortgage principal | (294) | (279) |
Net cash used in financing activities | (179,403) | (69,404) |
Effect of foreign currency exchange rates on cash | (1,756) | (3,615) |
Net change in cash and cash equivalents | (412,019) | (247,778) |
Cash and cash equivalents at beginning of period | 589,692 | 429,970 |
Cash and cash equivalents at end of period | 177,673 | 182,192 |
Cash paid during the period | ||
Income taxes, net of refunds of $5,282 and $3,730, as of September 30, 2019 and 2018, respectively | 17,508 | 8,682 |
Interest | 1,118 | 2,272 |
Operating leases | 30,093 | |
Non-cash investing activities | ||
Accrued for purchases of property and equipment | 4,260 | 2,968 |
Accrued for asset retirement obligations | $ 96 | $ 70 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (PARENTHETICAL) - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Cash Flows [Abstract] | ||
Income tax refunds | $ 5,282 | $ 3,730 |
General
General | 6 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | 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. As part of its Omni-Channel platform, the Company's proprietary brands are aligned across its Fashion Lifestyle group, including the UGG and Koolaburra brands, and Performance Lifestyle group, including the HOKA, Teva, and Sanuk brands. The Company sells its products through domestic and international retailers, international distributors, and directly to its global consumers through its DTC business, which is comprised of its retail stores and E‑Commerce websites. Independent third-party contractors manufacture all the Company's products. A significant part of the Company's business is seasonal, requiring it to build inventory levels during certain quarters in its fiscal year to support higher selling seasons, which contributes to the variation in its results from quarter to quarter. Basis of Presentation The unaudited condensed consolidated financial statements and accompanying notes thereto (referred to herein as condensed consolidated financial statements ) as of September 30, 2019 and for the three and six months ended September 30, 2019 and 2018 were prepared in accordance with accounting principles generally accepted in the United States (US GAAP) for interim financial information pursuant to Rule 10-01 of Regulation S-X issued by the SEC. Accordingly, they do not include all the information and disclosures required by US GAAP for annual financial statements and accompanying notes thereto. The condensed consolidated balance sheet as of March 31, 2019 was derived from the Company's audited consolidated financial statements . In the opinion of management, the condensed consolidated financial statements include all normal and recurring entries necessary to fairly present the results of the interim periods presented but are not necessarily indicative of results to be achieved for full fiscal years or other interim periods. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2019 , filed with the SEC on May 30, 2019 ( 2019 Annual Report ). Consolidation. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Reclassifications . Certain reclassifications were made for prior periods presented to conform to the current period presentation. Use of Estimates. The preparation of the Company's condensed 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 standard pronouncements, and other factors that management believes to be reasonable. These estimates are based on information available as of the date of the condensed consolidated financial statements and actual results could differ materially from the results assumed or implied based on these estimates. Significant areas requiring the use of management estimates relate to inventory write-downs, trade accounts receivable allowances, including variable consideration for net sales provided to customers, contract assets and liabilities, stock-based compensation, impairment assessments, goodwill and other intangible assets, depreciation and amortization, income tax receivables and liabilities, uncertain tax positions, the fair value of financial instruments, the reasonably certain lease term, lease classification, and the Company's incremental borrowing rate (IBR) utilized to discount its operating lease assets and liabilities. Reportable Operating Segments The Company's six reportable operating segments include the worldwide wholesale operations for each of the UGG brand, HOKA brand, Teva brand, Sanuk brand, and Other brands, as well as DTC. Refer to Note 12, “Reportable Operating Segments,” for further information on the Company's reportable operating segments. Recent Accounting Pronouncements Recently Adopted. The Financial Accounting Standards Board (FASB) has issued Accounting Standard Updates (ASUs) that have been adopted by the Company for its annual and interim reporting periods as stated below. The following is a summary of each standard and the impact on the Company: Standard Description Impact on Adoption ASU No. 2016-02, Leases (as amended by ASUs 2015-14, 2018-01, 2018-10, 2018-11, 2018-20, and 2019-01) Requires a lessee to recognize a lease asset and lease liability in its condensed consolidated balance sheets. A lessee should recognize a right-of-use (ROU) asset representing its right to use the underlying asset for the estimated lease term, and a liability for related lease payments. The Company adopted this ASU (the new lease standard) on a modified retrospective basis beginning April 1, 2019. On adoption, the Company recorded a $230,048 increase to total assets due to the recognition of ROU assets, net of prior legacy US GAAP lease-related balances for deferred rent obligations and tenant allowances of $27,895, as previously recorded in other accrued expenses, deferred rent obligations, and other long-term liabilities, in the condensed consolidated balance sheets. In addition, the Company recorded a corresponding $254,538 increase to total liabilities due to the recognition of lease liabilities, net of a prior legacy US GAAP lease-related balance for prepaid rent of $4,846, as previously recorded in prepaid expenses, in the condensed consolidated balance sheets. ROU assets and lease liabilities include lease obligations for operating leases for retail stores, showrooms, offices, and distribution facilities. ROU assets and related lease liabilities are presented as operating lease assets and operating lease liabilities in the condensed consolidated balance sheets. including its borrowing strategy subject to leverage ratios. However, it did result in additional disclosures and presentation changes to the condensed consolidated statement of cash flows, including supplemental cash flow disclosure, as well as expanded disclosures on existing and new lease commitments. Standard Description Impact on Adoption ASU No. 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities (as amended by ASUs 2018-16 and 2019-04) Seeks to improve the transparency and understandability of information conveyed to financial statement users about an entity's risk management activities and to reduce the complexity of and simplify the application of hedge accounting. This ASU eliminates the requirement to separately measure and report hedge ineffectiveness. The Company adopted this ASU (the new hedging standard) beginning April 1, 2019 on a prospective basis, which did not have a material impact on the condensed consolidated financial statements. However, the Company made a change in accounting policy with respect to ineffective hedges and elected not to exclude hedge components from the periodic assessment of hedge effectiveness. Under legacy US GAAP, these amounts were excluded from hedge effectiveness and therefore as a component of accumulated other comprehensive loss (AOCL), and immediately recognized in selling, general and administrative (SG&A) expenses in the condensed consolidated statements of comprehensive income. Under the new hedge standard, these gains or losses will now be recognized as a component of AOCL and will be reclassified to earnings in the condensed consolidated statements of comprehensive income in the same period or periods as the related net sales are recorded. The comparative condensed consolidated financial statements have not been restated and continue to be reported under legacy US GAAP in effect for those prior reporting periods presented. Refer to Note 9, “Derivative Instruments,” for further information on the Company's hedging instruments. Not Yet Adopted. The FASB has issued the following ASUs that have not yet been adopted by the Company. The following is a summary of each standard, planned adoption date, and the expected impact on the Company: Standard Description Planned Period of Adoption Expected Impact on Adoption ASU No. 2017-04, Goodwill and Other: Simplifying the Test for Goodwill Impairment (as amended by ASU 2019-06) Requires annual and interim goodwill impairment test s be performed by comparing the fair value of a reporting unit with its carrying amount, effectively eliminating step two of the goodwill impairment test under legacy US GAAP. The amount by which the carrying amount exceeds the reporting unit’s fair value will continue to be recognized as an impairment charge. Q1 FY 2021 The adoption of this ASU is not expected to have a material impact on the Company's condensed consolidated financial statements. ASU No. 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (as amended by ASUs 2018-19, 2019-04, and 2019-05) Replaces the incurred loss impairment methodology in legacy US GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Q1 FY 2021 The Company is currently evaluating the impact on adoption of this ASU; however, the Company does not expect that the adoption will have a material impact on its condensed consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 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 the customer can 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. Components of variable consideration include estimated discounts, markdowns or chargebacks, and sales returns. Estimated variable consideration is included in the transaction price to the extent that it is probable that a significant reversal of the cumulative revenue recognized will not occur in a future period. The Company's customer contracts do not have a significant financing component due to their short durations, which are typically effective for one year or less and have payment terms that are generally 30 - 60 days. Contract Assets and Liabilities Contract assets represent the Company’s right to consideration subject to conditions other than the passage of time, such as additional performance obligations to be satisfied. Contract liabilities are performance obligations that the Company expects to satisfy or relieve within the next 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 assets and liabilities are recorded in other current assets and other accrued expenses, respectively, in the condensed consolidated balance sheets . Sales Returns. The following table provides activity during the six months ended September 30, 2019 related to estimated sales returns for the Company’s existing customer contracts for all channels: Contract Asset Contract Liability Balance, March 31, 2019 $ 10,441 $ (24,787 ) Net additions to sales return allowance* 12,297 (37,604 ) Actual returns (14,763 ) 43,080 Balance, September 30, 2019 $ 7,975 $ (19,311 ) The following table provides activity during the six months ended September 30, 2018 related to estimated sales returns for the Company’s existing customer contracts for all channels: Contract Asset Contract Liability Balance, March 31, 2018 $ 11,251 $ (23,156 ) Net additions to sales return allowance* 12,277 (38,098 ) Actual returns (14,650 ) 40,538 Balance, September 30, 2018 $ 8,878 $ (20,716 ) * Net additions to sales return allowance include provision for anticipated sales returns which consists of both contractual return rights and discretionary authorized returns. Loyalty Programs . The Company has a customer loyalty program for the UGG brand in its DTC channel which allows customers to earn rewards from qualifying purchases or activities. As of September 30, 2019 and March 31, 2019 , the Company's contract liability for loyalty programs was $5,170 and $5,171 , respectively. Refer to Note 12, “Reportable Operating Segments,” for further information on the Company's disaggregation of revenue by reportable operating segment. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets The Company's goodwill and other intangible assets are recorded in the condensed consolidated balance sheets , as follows: September 30, 2019 March 31, 2019 Goodwill UGG brand $ 6,101 $ 6,101 HOKA brand 7,889 7,889 Total goodwill 13,990 13,990 Other intangible assets Indefinite-lived intangible assets Trademarks 15,454 15,454 Definite-lived intangible assets Trademarks 55,245 55,245 Other 51,646 51,981 Total gross carrying amount 106,891 107,226 Accumulated amortization (73,061 ) (71,186 ) Net definite-lived intangible assets 33,830 36,040 Total other intangible assets, net 49,284 51,494 Total $ 63,274 $ 65,484 Amortization Expense Aggregate amortization expense for amortizable intangible assets during the six months ended September 30, 2019 and 2018 was $2,201 and $3,400 , respectively. A reconciliation of the changes in total other intangible assets, net, recorded in the condensed consolidated balance sheets is as follows: Balance, March 31, 2019 $ 51,494 Amortization expense (2,201 ) Foreign currency translation net loss (9 ) Balance, September 30, 2019 $ 49,284 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 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. 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, trade accounts payable, accrued payroll, and other accrued expenses, approximates fair value due to their short-term nature. The carrying amount of the Company’s short-term borrowings and mortgage payable, which are considered Level 2 liabilities, approximates fair value based upon current rates and terms available to the Company for similar debt. The assets and liabilities that are measured on a recurring basis at fair value in the condensed consolidated balance sheets were as follows: Measured Using September 30, 2019 Level 1 Level 2 Level 3 Non-qualified deferred compensation asset $ 7,332 $ 7,332 $ — $ — Non-qualified deferred compensation liability (4,380 ) (4,380 ) — — Designated Derivative Contracts asset 1,557 — 1,557 — Non-Designated Derivative Contracts asset 317 — 317 — Non-Designated Derivative Contracts liability (172 ) — (172 ) — Measured Using March 31, 2019 Level 1 Level 2 Level 3 Non-qualified deferred compensation asset $ 7,300 $ 7,300 $ — $ — Non-qualified deferred compensation liability (4,447 ) (4,447 ) — — The Company sponsors a non-qualified deferred compensation program that permits a select group of management employees to defer earnings to a future date on a non-qualified basis. Deferred compensation is recognized based on the fair value of the participants' accounts. A rabbi trust was established as a reserve for benefits payable under this program, with the assets invested in Company-owned life insurance policies. As of September 30, 2019 , the non-qualified deferred compensation asset of $7,332 was recorded in other long-term assets in the condensed consolidated balance sheets . As of September 30, 2019 , the non-qualified deferred compensation liability of $4,380 was recorded in the condensed consolidated balance sheets , with $988 in other accrued expenses and $3,392 in other long-term liabilities. The Level 2 inputs consist of forward spot rates at the end of the applicable reporting period. The fair values of assets and liabilities associated with derivative instruments and hedging activities are recorded in other current assets and other accrued expenses, respectively, in the condensed consolidated balance sheets . Refer to Note 9, “Derivative Instruments,” for further information, including definitions of the terms Designated Derivative Contracts and Non-Designated Derivative Contracts. |
Income Taxes
Income Taxes | 6 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense and the effective income tax rate were as follows: Three Months Ended September 30, Six Months Ended September 30, 2019 2018 2019 2018 Income tax expense $ 19,413 $ 15,403 $ 9,159 $ 6,759 Effective income tax rate 20.0 % 17.2 % 13.5 % 13.3 % The tax provisions for the three and six months ended September 30, 2019 and 2018 were computed using the estimated effective income tax rates applicable to each of the domestic and foreign taxable jurisdictions for the full fiscal year and were adjusted for discrete items that occurred within the periods presented. During the three months ended September 30, 2019, the increase in the effective income tax rate, compared to the prior period, was due to changes in the jurisdictional mix of worldwide income before income taxes forecasted for the fiscal year ending March 31, 2020, as well as an increase in net discrete tax expenses, primarily driven by favorable return to provision differences in the prior period. During the six months ended September 30, 2019, the increase in the effective income tax rate, compared to the prior period, was due to changes in the jurisdictional mix of worldwide income before income taxes forecasted for the fiscal year ending March 31, 2020, partially offset by a net discrete tax benefit, primarily driven by the favorable settlement of a state income tax audit recorded during the current period. Due to the enactment of the Tax Cuts and Jobs Act (Tax Reform Act) in December 2017, the Company is subject to US taxation of its foreign subsidiary earnings considered global intangible low-taxed income, as well as limitations on the deductibility of executive compensation, which are included in income tax expense in the condensed consolidated statements of comprehensive income for the periods presented above. The Company continues to evaluate new guidance and legislation as it is issued. Unrecognized Tax Benefits . During the six months ended September 30, 2019 , the amount of gross unrecognized tax benefits and associated penalties and interest increased by $2,700 to $16,098 , primarily related to state income tax reserves recorded in income tax liability in the condensed consolidated balance sheets . |
Revolving Credit Facilities and
Revolving Credit Facilities and Mortgage Payable | 6 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facilities and Mortgage Payable | Revolving Credit Facilities and Mortgage Payable Primary Credit Facility In September 2018, the Company entered into a credit agreement that 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 September 20, 2023. At the Company's election, interest under the Primary Credit Facility is tied to the adjusted London Interbank Offered Rate (LIBOR) or the Alternate Base Rate (ABR). Interest for borrowings made in foreign currencies is based on currency-specific LIBOR or the Canadian deposit offered rate (CDOR) if made in Canadian dollars. As of September 30, 2019 , the effective interest rates for US dollar LIBOR and ABR, with relevant spreads for borrowings made during the reporting period, were 3.14% and 5.13% , respectively. During the six months ended September 30, 2019 , the Company borrowed and repaid $16,000 under the Primary Credit Facility. As of September 30, 2019 , the Company had no outstanding balance under the Primary Credit Facility and had outstanding letters of credit of $549 . As of September 30, 2019 , available borrowings under the Primary Credit Facility were $399,451 . Subsequent to September 30, 2019 through October 31, 2019 , the Company borrowed $34,000 and made $25,000 of repayments under the Primary Credit Facility. At October 31, 2019 , the Company had an outstanding balance of $9,000 , outstanding letters of credit of $549 , and had available borrowings of $390,451 under the Primary Credit Facility. China Credit Facility In August 2013, Deckers (Beijing) Trading Co., LTD, 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 $42,012 , with an overdraft facility sublimit of CNY 100,000 , or $14,004 . The China Credit Facility is payable on demand and subject to annual review with a defined aggregate period of borrowing of up to 12 months. The obligations under the China Credit Facility are guaranteed by the Company for 108.5% of the facility amount in US dollars. Interest is based on the People’s Bank of China (PBOC) market rate multiplied by a variable liquidity factor. As of September 30, 2019 , the effective interest rate was 4.20% . During the six months ended September 30, 2019 , the Company borrowed $12,981 and made no repayments under the China Credit Facility. As of September 30, 2019 , the Company had an outstanding balance of $12,981 , outstanding bank guarantees of $28 , and available borrowings of $29,003 under the China Credit Facility. Subsequent to September 30, 2019 through October 31, 2019 , the Company borrowed $5,874 , had an outstanding balance of $18,855 , outstanding bank guarantees of $28 , and had available borrowings of approximately $23,129 under the China Credit Facility. Japan Credit Facility In March 2016, Deckers Japan, G.K., a wholly-owned subsidiary of the Company, entered into a credit agreement in Japan (as amended, the Japan Credit Facility) that provides for an uncommitted revolving line of credit of up to JPY 5,500,000 , or $50,928 , for a maximum term of six months for each draw on the facility. The Japan Credit Facility renews annually and is guaranteed by the Company. The Company has renewed the Japan Credit Facility through January 31, 2020. Interest is based on the Tokyo Interbank Offered Rate (TIBOR), plus 0.40% . As of September 30, 2019 , the effective interest rate was 0.48% . During the six months ended September 30, 2019 , the Company made no borrowings or repayments under the Japan Credit Facility. As of September 30, 2019 , the Company had no outstanding balance under the Japan Credit Facility and available borrowings of $50,928 . Subsequent to September 30, 2019 through October 31, 2019 , the Company made no additional borrowings, had no outstanding balance, and had available borrowings of approximately $50,928 under the Japan Credit Facility. Mortgage In July 2014, the Company obtained a mortgage secured by the property on which its corporate headquarters is located for $33,931 . As of September 30, 2019 , the outstanding principal balance under the mortgage was $31,210 , which includes $618 in short-term borrowings and $30,592 in mortgage payable in the condensed consolidated balance sheets . The mortgage has a fixed interest rate of 4.928% . Payments include interest and principal in an amount that amortizes the principal balance over a 30 -year period; however, the loan will mature and requires a balloon payment of $23,695 , in addition to any then-outstanding balance, on July 1, 2029 . Debt Covenants As of September 30, 2019 , and through October 31, 2019 , the Company was in compliance with all debt covenants under its revolving credit facilities and mortgage. Foreign Currency Exchange Rates The amounts disclosed above for the China Credit Facility and Japan Credit Facility were translated into US dollars using applicable foreign currency exchange spot rates in effect as of September 30, 2019 . As a result, there are differences between the net borrowing and repayment amounts within this footnote disclosure and those same amounts recorded in the condensed consolidated statements of cash flows . Any amounts outstanding are recorded in short-term borrowings in the condensed consolidated balance sheets |
Leases and Other Commitments
Leases and Other Commitments | 6 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Leases and Other Commitments | Leases and Other Commitments Leases The Company primarily leases retail stores, showrooms, offices, and distribution facilities under operating lease contracts. Some of the Company's operating leases contain extension options of anywhere from 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. Operating lease assets and 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 condensed 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 periods covered by the Company's options to extend (or not to terminate) the lease that are 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. Rent expense for operating lease payments is recognized on a straight-line basis over the lease term in SG&A expenses in the condensed consolidated statements of comprehensive income . Lease payments recognized in the operating lease liability are (1) fixed payments, including in-substance fixed payments, owed over the lease term, as well as fixed rate increases and (2) exclude any lease prepayments as of the period presented. Operating lease assets and liabilities are presented separately in the condensed consolidated balance sheets . 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. 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 liabilities and are recognized in rent expense and recorded as a component of SG&A expenses in the condensed 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 include 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. 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 condensed consolidated statements of comprehensive income . 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. 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 noncollateralized 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. Remeasurements . The Company monitors for events that require a change in estimates for its operating lease assets and liabilities, such as modifications to the terms of the contract, including the lease term. When a change in estimates results in the remeasurement of the operating lease liability, a corresponding adjustment is made to the carrying amount of the operating lease asset. Reassessments may include impairments of operating lease assets as determined under the requirements of ASC Subtopic 360-10, Property, Plant, and Equipment – Overall (ASC 360). Any impairment charges incurred under the requirements of ASC 360 are allocated to the long-lived assets in the defined asset group, which include the operating lease asset unless doing so would reduce the carrying amount of the operating lease asset to an amount less than zero. Impairment charges are recorded in SG&A expenses in the condensed consolidated statements of comprehensive income . After impairment, the operating lease asset is remeasured and amortized on a straight-line basis over the remaining lease term, with no impact to the operating lease liability. Rent Expense . The components of rent expense for operating leases recorded in the condensed consolidated statements of comprehensive income were as follows: Three Months Ended September 30, 2019 Six Months Ended September 30, 2019 Operating $ 14,455 $ 28,702 Variable 6,135 11,589 Short-term 718 1,260 Total $ 21,308 $ 41,551 The components of rent expense for operating leases recorded in the condensed consolidated statements of comprehensive income under legacy US GAAP were as follows: Three Months Ended September 30, 2018 Six Months Ended September 30, 2018 Minimum rentals $ 15,350 $ 30,150 Contingent rentals 1,733 2,938 Total $ 17,083 $ 33,088 Operating Lease Liabilities . Maturities of undiscounted operating lease liabilities remaining as of September 30, 2019 under the new lease standard, with a reconciliation to the present value of operating lease liabilities recorded in the condensed consolidated balance sheets , were as follows: Years Ending March 31, Amount 2020 $ 25,908 2021 51,849 2022 43,816 2023 38,797 2024 33,990 Thereafter 84,744 Total undiscounted future lease payments 279,104 Less: Imputed interest (28,582 ) Total $ 250,522 Operating lease liabilities recorded in the condensed consolidated balance sheets exclude $38,977 of legally binding undiscounted minimum lease payments due pursuant to a lease signed but not yet commenced for a new flagship store location that will replace an existing flagship store during the fiscal year ending March 31, 2021. Future minimum commitments under operating lease contracts as of March 31, 2019 under legacy US GAAP were as follows: Years Ending March 31, Amount 2020 $ 53,015 2021 47,803 2022 40,629 2023 35,915 2024 31,329 Thereafter 81,746 Total $ 290,437 Supplemental Disclosure . Key estimates and judgments related to operating lease assets and liabilities that are outstanding and presented in the condensed consolidated balance sheets are as follows: September 30, 2019 Weighted-average remaining lease term in years 6.4 Weighted-average discount rate 3.3 % Supplemental information for amounts presented in the condensed consolidated statements of cash flows related to operating leases is as follows: Three Months Ended September 30, 2019 Six Months Ended September 30, 2019 Non-cash operating activities Operating lease assets obtained in exchange for lease liabilities* $ 11,715 $ 28,137 Reductions to operating lease assets resulting from reductions to lease liabilities* (2,120 ) (4,669 ) *Amounts disclosed include non-cash additions or reductions resulting from lease remeasurements. Other Commitments During the six months ended September 30, 2019 , there were no material changes outside the ordinary course of business to the obligations reported in the 2019 Annual Report |
Leases and Other Commitments | Leases and Other Commitments Leases The Company primarily leases retail stores, showrooms, offices, and distribution facilities under operating lease contracts. Some of the Company's operating leases contain extension options of anywhere from 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. Operating lease assets and 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 condensed 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 periods covered by the Company's options to extend (or not to terminate) the lease that are 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. Rent expense for operating lease payments is recognized on a straight-line basis over the lease term in SG&A expenses in the condensed consolidated statements of comprehensive income . Lease payments recognized in the operating lease liability are (1) fixed payments, including in-substance fixed payments, owed over the lease term, as well as fixed rate increases and (2) exclude any lease prepayments as of the period presented. Operating lease assets and liabilities are presented separately in the condensed consolidated balance sheets . 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. 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 liabilities and are recognized in rent expense and recorded as a component of SG&A expenses in the condensed 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 include 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. 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 condensed consolidated statements of comprehensive income . 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. 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 noncollateralized 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. Remeasurements . The Company monitors for events that require a change in estimates for its operating lease assets and liabilities, such as modifications to the terms of the contract, including the lease term. When a change in estimates results in the remeasurement of the operating lease liability, a corresponding adjustment is made to the carrying amount of the operating lease asset. Reassessments may include impairments of operating lease assets as determined under the requirements of ASC Subtopic 360-10, Property, Plant, and Equipment – Overall (ASC 360). Any impairment charges incurred under the requirements of ASC 360 are allocated to the long-lived assets in the defined asset group, which include the operating lease asset unless doing so would reduce the carrying amount of the operating lease asset to an amount less than zero. Impairment charges are recorded in SG&A expenses in the condensed consolidated statements of comprehensive income . After impairment, the operating lease asset is remeasured and amortized on a straight-line basis over the remaining lease term, with no impact to the operating lease liability. Rent Expense . The components of rent expense for operating leases recorded in the condensed consolidated statements of comprehensive income were as follows: Three Months Ended September 30, 2019 Six Months Ended September 30, 2019 Operating $ 14,455 $ 28,702 Variable 6,135 11,589 Short-term 718 1,260 Total $ 21,308 $ 41,551 The components of rent expense for operating leases recorded in the condensed consolidated statements of comprehensive income under legacy US GAAP were as follows: Three Months Ended September 30, 2018 Six Months Ended September 30, 2018 Minimum rentals $ 15,350 $ 30,150 Contingent rentals 1,733 2,938 Total $ 17,083 $ 33,088 Operating Lease Liabilities . Maturities of undiscounted operating lease liabilities remaining as of September 30, 2019 under the new lease standard, with a reconciliation to the present value of operating lease liabilities recorded in the condensed consolidated balance sheets , were as follows: Years Ending March 31, Amount 2020 $ 25,908 2021 51,849 2022 43,816 2023 38,797 2024 33,990 Thereafter 84,744 Total undiscounted future lease payments 279,104 Less: Imputed interest (28,582 ) Total $ 250,522 Operating lease liabilities recorded in the condensed consolidated balance sheets exclude $38,977 of legally binding undiscounted minimum lease payments due pursuant to a lease signed but not yet commenced for a new flagship store location that will replace an existing flagship store during the fiscal year ending March 31, 2021. Future minimum commitments under operating lease contracts as of March 31, 2019 under legacy US GAAP were as follows: Years Ending March 31, Amount 2020 $ 53,015 2021 47,803 2022 40,629 2023 35,915 2024 31,329 Thereafter 81,746 Total $ 290,437 Supplemental Disclosure . Key estimates and judgments related to operating lease assets and liabilities that are outstanding and presented in the condensed consolidated balance sheets are as follows: September 30, 2019 Weighted-average remaining lease term in years 6.4 Weighted-average discount rate 3.3 % Supplemental information for amounts presented in the condensed consolidated statements of cash flows related to operating leases is as follows: Three Months Ended September 30, 2019 Six Months Ended September 30, 2019 Non-cash operating activities Operating lease assets obtained in exchange for lease liabilities* $ 11,715 $ 28,137 Reductions to operating lease assets resulting from reductions to lease liabilities* (2,120 ) (4,669 ) *Amounts disclosed include non-cash additions or reductions resulting from lease remeasurements. Other Commitments During the six months ended September 30, 2019 , there were no material changes outside the ordinary course of business to the obligations reported in the 2019 Annual Report |
Stock Compensation
Stock Compensation | 6 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Compensation | Stock Compensation The Company grants various types of stock-based compensation under the 2006 Equity Incentive Plan, as amended, and the 2015 Stock Incentive Plan, as amended (2015 SIP), including time-based restricted stock units (RSUs), performance-based restricted stock units (PSUs), stock appreciation rights, and non-qualified stock options (NQSOs). The Company typically makes annual grants of RSUs (Annual RSUs) and PSUs (Annual PSUs) to key employees and certain executive officers, and long-term incentive plan (LTIP) awards to certain officers. During the six months ended September 30, 2019 , except for the grant activity summarized below, no awards were granted under these plans. Refer to the 2019 Annual Report for further information on previously granted awards under these plans. Annual Awards The Company granted Annual RSUs and Annual PSUs under the 2015 SIP, as summarized below: Six Months Ended September 30, 2019 2018 Shares Granted Weighted-average grant date fair value per share Shares Granted Weighted-average grant date fair value per share Annual RSUs 38,307 $ 173.65 59,235 $ 115.65 Annual PSUs 19,938 174.36 31,320 116.34 Total 58,245 $ 173.89 90,555 $ 115.89 Stock-based compensation is recorded net of estimated forfeitures in SG&A expenses in the condensed consolidated statements of comprehensive income . The Annual RSUs vest in equal annual installments over three years following the date of grant. The Annual PSUs are earned based on the achievement of pre-established Company performance criteria measured over the fiscal year during which they are granted and, to the extent the performance criteria are met, vest in equal annual installments over three years thereafter. As of September 30, 2019 , the Company estimates that the target performance criteria related to the Annual PSUs for the fiscal year ending March 31, 2020 will be achieved. Future unrecognized stock-based compensation expense for Annual RSUs and Annual PSUs outstanding as of September 30, 2019 was $13,593 . Subsequent to September 30, 2019 through October 31, 2019 , the Company granted no material Annual RSUs and no Annual PSUs. Long-Term Incentive Plan Awards In September 2019, the Company approved LTIP awards under the 2015 SIP for the issuance of PSUs (2020 LTIP PSUs), which were awarded to certain members of the Company's senior management team, including the Company's named executive officers. The 2020 LTIP PSUs are subject to vesting based on service conditions over three years , as well as the Company meeting certain revenue and pre-tax income performance targets for the fiscal year ending March 31, 2022 (Measurement Period) and incorporates a relative total shareholder return (TSR) modifier for the 36 -month performance period commencing on April 1, 2019 and ending March 31, 2022 (Performance Period). To the extent financial performance is achieved above the threshold levels for each of these performance criteria, the number of 2020 LTIP PSUs that will vest will increase up to a maximum of 200% of the targeted amount for that award. No vesting of any portion of the 2020 LTIP PSUs will occur if the Company fails to achieve revenue and pre-tax income amounts equal to at least 90% of the threshold amounts for these criteria. Following the determination of the Company’s achievement with respect to the revenue and pre-tax income criteria for the Measurement Period, the vesting of each 2020 LTIP PSU will be subject to adjustment based on the application of a relative TSR modifier. The amount of the adjustment will be determined based on a comparison of the Company's TSR relative to the TSR of a pre-determined set of peer group companies for the Performance Period. A Monte-Carlo simulation model was used to determine the grant date fair value by simulating a range of possible future stock prices for the Company and each member of the peer group over the Performance Period. The Company granted awards at the target performance level of 38,174 2020 LTIP PSUs during the three months ended September 30, 2019 . The grant date fair value of these 2020 LTIP PSUs was $146.96 per share. Based on the Company's current long-range forecast, the Company determined that the achievement of at least the target performance criteria for these awards was probable as of the grant date . Future unrecognized stock-based compensation expense for all LTIP PSUs outstanding as of September 30, 2019 , including the LTIP PSUs for the fiscal year ended March 31, 2019 and the 2020 LTIP PSUs, was $10,147 . |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments The Company may enter into foreign currency forward or option contracts (derivative contracts). 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 after-tax unrealized gains or losses from changes in the fair value of Designated Derivative Contracts are recognized as a component of AOCL and are reclassified to earnings in the condensed consolidated statements of comprehensive income in the same period or periods as the related net sales are recorded. The Company includes all hedge components in its assessment of effectiveness for its derivative contracts. When it is probable that a forecasted transaction will not occur, the Company discontinues hedge accounting and the accumulated gains or losses in other comprehensive income or loss (OCI) related to the hedging relationship are immediately recorded in earnings in the condensed consolidated statements of comprehensive income . As of September 30, 2019 , the Company had the following derivative contracts recorded at fair value in the condensed consolidated balance sheets : Designated Derivative Contracts Non-Designated Derivative Contracts Total Notional value $ 48,528 $ 42,825 $ 91,353 Fair value recorded in other current assets 1,557 317 1,874 Fair value recorded in other accrued expenses — (172 ) (172 ) As of March 31, 2019 , the Company had no outstanding derivative contracts. As of September 30, 2019 , the Company's outstanding derivative contracts were held by a total of six counterparties, all with various maturity dates within the next six months . The following table summarizes the effect of Designated Derivative Contracts: Three Months Ended September 30, Six Months Ended September 30, 2019 2018 2019 2018 Amount of gain recognized in OCI $ 2,190 $ 588 $ 1,773 $ 7,358 Amount of gain reclassified from AOCL into net sales 216 2,166 216 2,166 Amount of gain excluded from effectiveness testing recognized in SG&A expenses* — 634 — 1,480 *Amounts presented for the three and six months ended September 30, 2018 were recognized under legacy US GAAP. Beginning April 1, 2019, under the new hedging standard, these amounts are now recognized as a component of AOCL and were reclassified into earnings during the three and six months ended September 30, 2019 . Amounts of income tax effects recorded in the condensed consolidated statements of comprehensive income for changes in AOCL for unrealized gains or losses for Designated Derivative Contracts were as follows: Three Months Ended September 30, Six Months Ended September 30, 2019 2018 2019 2018 Income tax expense (benefit) $ 477 $ (381 ) $ 377 $ 1,066 The following table summarizes the effect of Non-Designated Derivative Contracts: Three Months Ended September 30, Six Months Ended September 30, 2019 2018 2019 2018 Amount of gain recognized in SG&A expenses $ 502 $ 250 $ 146 $ 737 The non-performance risk of the Company and the counterparties did not have a material impact on the fair value of its derivative contracts. As of September 30, 2019 , the amount of unrealized gains on derivative contracts recognized in AOCL is expected to be reclassified into income within the next nine months . Refer to Note 10, “Stockholders' Equity,” for further information. Subsequent to September 30, 2019 through October 31, 2019 , the Company entered into a Non-Designated Derivative Contract with a notional value totaling $6,427 , which is expected to mature over the next two months , and no additional Designated Derivative Contracts. As of October 31, 2019 , the Company’s outstanding hedging contracts were held by an aggregate of six counterparties. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders' Equity Stock Repurchase Programs The Company's Board of Directors has authorized various stock repurchase programs pursuant to which the Company may repurchase its common stock. The Company's stock repurchase programs do not obligate it to acquire any amount of common stock and may be suspended at any time at the Company's discretion. As of September 30, 2019 , the aggregate remaining approved amount under the Company's stock repurchase programs was $159,807 . Stock repurchase activity under these programs for the six months ended September 30, 2019 was as follows: Total number of shares repurchased* 1,296,201 Average price paid per share $ 146.89 Dollar value of shares repurchased $ 190,405 *All shares were repurchased as part of publicly-announced programs in open-market transactions. Subsequent to September 30, 2019 through October 31, 2019 , the Company made no share repurchases, leaving the aggregate remaining approved amount under the Company's stock repurchase programs at $159,807 . Accumulated Other Comprehensive Loss The components within AOCL, net of tax, recorded in the condensed consolidated balance sheets , were as follows: September 30, 2019 March 31, 2019 Unrealized gain on cash flow hedges $ 1,180 $ — Cumulative foreign currency translation loss (25,977 ) (22,654 ) Total $ (24,797 ) $ (22,654 ) |
Basic and Diluted Shares
Basic and Diluted Shares | 6 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Shares | Basic and Diluted Shares The reconciliation of basic to diluted weighted-average common shares outstanding, was as follows: Three Months Ended September 30, Six Months Ended September 30, 2019 2018 2019 2018 Basic 28,483,000 29,849,000 28,785,000 30,134,000 Dilutive effect of equity awards 222,000 179,000 254,000 193,000 Diluted 28,705,000 30,028,000 29,039,000 30,327,000 Excluded* Annual RSUs and Annual PSUs 54,000 29,000 52,000 55,000 LTIP PSUs 153,000 84,000 153,000 84,000 LTIP NQSOs 170,000 377,000 170,000 377,000 Deferred Non-Employee Director Equity Awards — — — 1,000 *The equity awards excluded from the dilutive effect are excluded due to one of the following: (1) the shares were anti-dilutive; (2) the necessary conditions had not been satisfied for the shares to be issuable based on the Company's performance for the relevant performance period; or (3) the Company recorded a net loss during the period presented. The number of shares stated for each of these excluded awards is the maximum number of shares issuable pursuant to these awards. For those awards with performance criteria, the actual number of shares to be issued pursuant to such awards will be based on Company performance in future periods, net of forfeitures. Refer to Note 8, “Stock Compensation,” for further information. |
Reportable Operating Segments
Reportable Operating Segments | 6 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Reportable Operating Segments | Reportable Operating Segments The Company's six reportable operating segments include the worldwide wholesale operations for each of the UGG brand, HOKA brand, Teva brand, Sanuk brand, and Other brands, as well as DTC. Information reported to the Chief Operating Decision Maker (CODM), who is the Company's Principal Executive Officer (PEO), is organized into these reportable operating segments and is consistent with how the CODM evaluates the Company's performance and allocates resources. The Company does not consider international operations to be a separate reportable operating segment, and the CODM reviews such operations in the aggregate with the reportable operating segments. Inter-segment sales from the Company’s wholesale reportable operating segments to the DTC reportable operating segment are at the Company’s cost, and there is no inter-segment profit on these inter-segment sales, nor are they reflected in income (loss) from operations of the wholesale reportable operating segments. The Company evaluates reportable operating segment performance primarily based on net sales and income (loss) from operations. The wholesale operations of each brand are generally managed separately because each requires different marketing, research and development, design, sourcing, and sales strategies. The income (loss) from operations of each of the reportable operating segments includes only those costs which are specifically related to each reportable operating segment, which consist primarily of cost of sales, research and development, design, sales and marketing, depreciation, amortization, and the direct costs of employees within those reportable operating segments. The Company does not allocate corporate overhead costs or non-operating income and expenses to reportable operating segments, which include unallocable overhead costs associated with distribution centers, certain executive and stock compensation, accounting, finance, legal, information technology, human resources, and facilities, among others. Reportable operating segment information, with a reconciliation to the condensed consolidated statements of comprehensive income , is summarized as follows: Three Months Ended September 30, Six Months Ended September 30, 2019 2018 2019 2018 Net sales UGG brand wholesale $ 332,020 $ 319,589 $ 417,420 $ 400,942 HOKA brand wholesale 60,959 43,561 124,965 83,515 Teva brand wholesale 17,091 15,878 47,922 49,074 Sanuk brand wholesale 8,166 10,933 22,773 31,436 Other brands wholesale 25,282 18,064 27,009 20,701 Direct-to-Consumer 98,687 93,888 178,955 166,839 Total $ 542,205 $ 501,913 $ 819,044 $ 752,507 Three Months Ended September 30, Six Months Ended September 30, 2019 2018 2019 2018 Income (loss) from operations UGG brand wholesale $ 135,663 $ 134,029 $ 145,104 $ 139,898 HOKA brand wholesale 14,054 8,170 25,412 13,898 Teva brand wholesale 3,523 1,847 11,839 9,911 Sanuk brand wholesale 238 291 2,173 4,491 Other brands wholesale 6,958 5,287 7,090 5,637 Direct-to-Consumer 2,935 2,975 (1,637 ) (4,449 ) Unallocated overhead costs (66,240 ) (62,187 ) (124,267 ) (118,388 ) Total $ 97,131 $ 90,412 $ 65,714 $ 50,998 Assets allocated to each reportable operating segment include trade accounts receivable, net, inventories, net, property and equipment, net, operating lease assets, goodwill, other intangible assets, net, and certain other assets that are specifically identifiable for one of the Company's reportable operating segments. Unallocated assets are those assets not directly related to a specific reportable operating segment and generally include cash and cash equivalents, deferred tax assets, net, and various other corporate assets shared by the Company's reportable operating segments. Assets allocated to each reportable operating segment, with a reconciliation to the condensed consolidated balance sheets , were as follows: September 30, 2019 March 31, 2019 Assets UGG brand wholesale $ 691,484 $ 240,411 HOKA brand wholesale 84,589 94,157 Teva brand wholesale 39,521 76,370 Sanuk brand wholesale 44,534 71,285 Other brands wholesale 65,479 14,618 Direct-to-Consumer 240,048 95,501 Total assets from reportable operating segments 1,165,655 592,342 Unallocated cash and cash equivalents 177,673 589,692 Unallocated deferred tax assets, net 31,253 30,870 Unallocated other corporate assets 317,078 214,302 Total $ 1,691,659 $ 1,427,206 |
Concentration of Business
Concentration of Business | 6 Months Ended |
Sep. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
Concentration of Business | Concentration of Business Regions and Customers The Company sells its products to customers throughout the US and to foreign customers in various countries, with concentrations as follows: Three Months Ended September 30, Six Months Ended September 30, 2019 2018 2019 2018 International net sales $ 184,234 $ 190,320 $ 293,778 $ 299,207 % of net sales 34.0 % 37.9 % 35.9 % 39.8 % Net sales in foreign currencies $ 159,059 $ 162,587 $ 218,416 $ 227,013 % of net sales 29.3 % 32.4 % 26.7 % 30.2 % Ten largest customers as % of net sales 36.6 % 36.6 % 30.4 % 31.6 % For the three and six months ended September 30, 2019 and 2018 , no single foreign country comprised 10.0% or more of the Company's total net sales. No single customer accounted for 10.0% or more of the Company's total net sales during the three and six months ended September 30, 2019 and 2018 . The Company sells its products to customers for trade accounts receivable and, as of September 30, 2019 , had one customer that represented 11.8% of trade accounts receivable, net, compared to no customers that exceeded 10.0% of trade accounts receivable, net as of March 31, 2019 . 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. Suppliers The Company's production is concentrated at a limited number of independent manufacturing factories, primarily in Asia. Sheepskin is the principal raw material for certain UGG brand products and most of the Company's sheepskin is purchased from two tanneries in China, which is sourced primarily from Australia and the United Kingdom. The supply of sheepskin can be adversely impacted by weather patterns, harvesting decisions, incidents of disease, and the price of other commodities, such as wool and leather. Furthermore, the price of sheepskin is impacted by numerous other factors, including demand for the Company's products, demand for sheepskin by competitors, changes in consumer preferences, and changes in discretionary spending. In an effort to partially reduce its dependency on sheepskin, the Company began using a proprietary raw material, UGGpure, which is a re-purposed wool woven into a durable backing, in some of its UGG brand products. The Company currently purchases UGGpure from two suppliers. The other production materials used by the Company are sourced primarily from Asia. The Company's operations are subject to the customary risks of doing business abroad, including, but not limited to, foreign currency exchange rate fluctuations, customs duties and related fees, various import controls and other nontariff barriers, restrictions on the transfer of funds, labor unrest and strikes, and, in certain parts of the world, political instability. Long-Lived Assets Long-lived assets, which consist of property and equipment, net, recorded in the condensed consolidated balance sheets , were as follows: September 30, 2019 March 31, 2019 US $ 196,598 $ 196,702 Foreign* 15,725 17,094 Total $ 212,323 $ 213,796 * No single foreign country’s net property and equipment comprised 10.0% or more of the Company’s total property and equipment, net, as of September 30, 2019 and March 31, 2019 . |
General (Policies)
General (Policies) | 6 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements and accompanying notes thereto (referred to herein as condensed consolidated financial statements ) as of September 30, 2019 and for the three and six months ended September 30, 2019 and 2018 were prepared in accordance with accounting principles generally accepted in the United States (US GAAP) for interim financial information pursuant to Rule 10-01 of Regulation S-X issued by the SEC. Accordingly, they do not include all the information and disclosures required by US GAAP for annual financial statements and accompanying notes thereto. The condensed consolidated balance sheet as of March 31, 2019 was derived from the Company's audited consolidated financial statements . In the opinion of management, the condensed consolidated financial statements include all normal and recurring entries necessary to fairly present the results of the interim periods presented but are not necessarily indicative of results to be achieved for full fiscal years or other interim periods. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2019 , filed with the SEC on May 30, 2019 ( 2019 Annual Report ). |
Consolidation | Consolidation. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Reclassifications | Reclassifications . Certain reclassifications were made for prior periods presented to conform to the current period presentation. |
Use of Estimates | Use of Estimates. The preparation of the Company's condensed 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 standard pronouncements, and other factors that management believes to be reasonable. These estimates are based on information available as of the date of the condensed consolidated financial statements and actual results could differ materially from the results assumed or implied based on these estimates. Significant areas requiring the use of management estimates relate to inventory write-downs, trade accounts receivable allowances, including variable consideration for net sales provided to customers, contract assets and liabilities, stock-based compensation, impairment assessments, goodwill and other intangible assets, depreciation and amortization, income tax receivables and liabilities, uncertain tax positions, the fair value of financial instruments, the reasonably certain lease term, lease classification, and the Company's incremental borrowing rate (IBR) utilized to discount its operating lease assets and liabilities. |
Reportable Operating Segments | Reportable Operating Segments The Company's six The Company's six reportable operating segments include the worldwide wholesale operations for each of the UGG brand, HOKA brand, Teva brand, Sanuk brand, and Other brands, as well as DTC. Information reported to the Chief Operating Decision Maker (CODM), who is the Company's Principal Executive Officer (PEO), is organized into these reportable operating segments and is consistent with how the CODM evaluates the Company's performance and allocates resources. The Company does not consider international operations to be a separate reportable operating segment, and the CODM reviews such operations in the aggregate with the reportable operating segments. Inter-segment sales from the Company’s wholesale reportable operating segments to the DTC reportable operating segment are at the Company’s cost, and there is no inter-segment profit on these inter-segment sales, nor are they reflected in income (loss) from operations of the wholesale reportable operating segments. The Company evaluates reportable operating segment performance primarily based on net sales and income (loss) from operations. The wholesale operations of each brand are generally managed separately because each requires different marketing, research and development, design, sourcing, and sales strategies. The income (loss) from operations of each of the reportable operating segments includes only those costs which are specifically related to each reportable operating segment, which consist primarily of cost of sales, research and development, design, sales and marketing, depreciation, amortization, and the direct costs of employees within those reportable operating segments. The Company does not allocate corporate overhead costs or non-operating income and expenses to reportable operating segments, which include unallocable overhead costs associated with distribution centers, certain executive and stock compensation, accounting, finance, legal, information technology, human resources, and facilities, among others. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted. The Financial Accounting Standards Board (FASB) has issued Accounting Standard Updates (ASUs) that have been adopted by the Company for its annual and interim reporting periods as stated below. The following is a summary of each standard and the impact on the Company: Standard Description Impact on Adoption ASU No. 2016-02, Leases (as amended by ASUs 2015-14, 2018-01, 2018-10, 2018-11, 2018-20, and 2019-01) Requires a lessee to recognize a lease asset and lease liability in its condensed consolidated balance sheets. A lessee should recognize a right-of-use (ROU) asset representing its right to use the underlying asset for the estimated lease term, and a liability for related lease payments. The Company adopted this ASU (the new lease standard) on a modified retrospective basis beginning April 1, 2019. On adoption, the Company recorded a $230,048 increase to total assets due to the recognition of ROU assets, net of prior legacy US GAAP lease-related balances for deferred rent obligations and tenant allowances of $27,895, as previously recorded in other accrued expenses, deferred rent obligations, and other long-term liabilities, in the condensed consolidated balance sheets. In addition, the Company recorded a corresponding $254,538 increase to total liabilities due to the recognition of lease liabilities, net of a prior legacy US GAAP lease-related balance for prepaid rent of $4,846, as previously recorded in prepaid expenses, in the condensed consolidated balance sheets. ROU assets and lease liabilities include lease obligations for operating leases for retail stores, showrooms, offices, and distribution facilities. ROU assets and related lease liabilities are presented as operating lease assets and operating lease liabilities in the condensed consolidated balance sheets. including its borrowing strategy subject to leverage ratios. However, it did result in additional disclosures and presentation changes to the condensed consolidated statement of cash flows, including supplemental cash flow disclosure, as well as expanded disclosures on existing and new lease commitments. Standard Description Impact on Adoption ASU No. 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities (as amended by ASUs 2018-16 and 2019-04) Seeks to improve the transparency and understandability of information conveyed to financial statement users about an entity's risk management activities and to reduce the complexity of and simplify the application of hedge accounting. This ASU eliminates the requirement to separately measure and report hedge ineffectiveness. The Company adopted this ASU (the new hedging standard) beginning April 1, 2019 on a prospective basis, which did not have a material impact on the condensed consolidated financial statements. However, the Company made a change in accounting policy with respect to ineffective hedges and elected not to exclude hedge components from the periodic assessment of hedge effectiveness. Under legacy US GAAP, these amounts were excluded from hedge effectiveness and therefore as a component of accumulated other comprehensive loss (AOCL), and immediately recognized in selling, general and administrative (SG&A) expenses in the condensed consolidated statements of comprehensive income. Under the new hedge standard, these gains or losses will now be recognized as a component of AOCL and will be reclassified to earnings in the condensed consolidated statements of comprehensive income in the same period or periods as the related net sales are recorded. The comparative condensed consolidated financial statements have not been restated and continue to be reported under legacy US GAAP in effect for those prior reporting periods presented. Refer to Note 9, “Derivative Instruments,” for further information on the Company's hedging instruments. Not Yet Adopted. The FASB has issued the following ASUs that have not yet been adopted by the Company. The following is a summary of each standard, planned adoption date, and the expected impact on the Company: Standard Description Planned Period of Adoption Expected Impact on Adoption ASU No. 2017-04, Goodwill and Other: Simplifying the Test for Goodwill Impairment (as amended by ASU 2019-06) Requires annual and interim goodwill impairment test s be performed by comparing the fair value of a reporting unit with its carrying amount, effectively eliminating step two of the goodwill impairment test under legacy US GAAP. The amount by which the carrying amount exceeds the reporting unit’s fair value will continue to be recognized as an impairment charge. Q1 FY 2021 The adoption of this ASU is not expected to have a material impact on the Company's condensed consolidated financial statements. ASU No. 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (as amended by ASUs 2018-19, 2019-04, and 2019-05) Replaces the incurred loss impairment methodology in legacy US GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Q1 FY 2021 The Company is currently evaluating the impact on adoption of this ASU; however, the Company does not expect that the adoption will have a material impact on its condensed consolidated financial statements. |
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 the customer can 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. Components of variable consideration include estimated discounts, markdowns or chargebacks, and sales returns. Estimated variable consideration is included in the transaction price to the extent that it is probable that a significant reversal of the cumulative revenue recognized will not occur in a future period. The Company's customer contracts do not have a significant financing component due to their short durations, which are typically effective for one year or less and have payment terms that are generally 30 - 60 days. Contract Assets and Liabilities Contract assets represent the Company’s right to consideration subject to conditions other than the passage of time, such as additional performance obligations to be satisfied. Contract liabilities are performance obligations that the Company expects to satisfy or relieve within the next 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 assets and liabilities are recorded in other current assets and other accrued expenses, respectively, in the condensed consolidated balance sheets . Sales Returns. The following table provides activity during the six months ended September 30, 2019 related to estimated sales returns for the Company’s existing customer contracts for all channels: Contract Asset Contract Liability Balance, March 31, 2019 $ 10,441 $ (24,787 ) Net additions to sales return allowance* 12,297 (37,604 ) Actual returns (14,763 ) 43,080 Balance, September 30, 2019 $ 7,975 $ (19,311 ) The following table provides activity during the six months ended September 30, 2018 related to estimated sales returns for the Company’s existing customer contracts for all channels: Contract Asset Contract Liability Balance, March 31, 2018 $ 11,251 $ (23,156 ) Net additions to sales return allowance* 12,277 (38,098 ) Actual returns (14,650 ) 40,538 Balance, September 30, 2018 $ 8,878 $ (20,716 ) * Net additions to sales return allowance include provision for anticipated sales returns which consists of both contractual return rights and discretionary authorized returns. Loyalty Programs . The Company has a customer loyalty program for the UGG brand in its DTC channel which allows customers to earn rewards from qualifying purchases or activities. As of September 30, 2019 and March 31, 2019 , the Company's contract liability for loyalty programs was $5,170 and $5,171 , respectively. Refer to Note 12, “Reportable Operating Segments,” for further information on the Company's disaggregation of revenue by reportable operating segment. |
Fair Value Measurement | The Level 2 inputs consist of forward spot rates at the end of the applicable reporting period. The fair values of assets and liabilities associated with derivative instruments and hedging activities are recorded in other current assets and other accrued expenses, respectively, in the condensed consolidated balance sheets . Refer to Note 9, “Derivative Instruments,” for further information, including definitions of the terms Designated Derivative Contracts and Non-Designated Derivative Contracts. 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. 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, trade accounts payable, accrued payroll, and other accrued expenses, approximates fair value due to their short-term nature. The carrying amount of the Company’s short-term borrowings and mortgage payable, which are considered Level 2 liabilities, approximates fair value based upon current rates and terms available to the Company for similar debt. |
Deferred Compensation | The Company sponsors a non-qualified deferred compensation program that permits a select group of management employees to defer earnings to a future date on a non-qualified basis. Deferred compensation is recognized based on the fair value of the participants' accounts. A rabbi trust was established as a reserve for benefits payable under this program, with the assets invested in Company-owned life insurance policies. |
Share-based Compensation | Stock-based compensation is recorded net of estimated forfeitures in SG&A expenses in the condensed consolidated statements of comprehensive income . The Annual RSUs vest in equal annual installments over three years following the date of grant. The Annual PSUs are earned based on the achievement of pre-established Company performance criteria measured over the fiscal year during which they are granted and, to the extent the performance criteria are met, vest in equal annual installments over three years three years , as well as the Company meeting certain revenue and pre-tax income performance targets for the fiscal year ending March 31, 2022 (Measurement Period) and incorporates a relative total shareholder return (TSR) modifier for the 36 -month performance period commencing on April 1, 2019 and ending March 31, 2022 (Performance Period). To the extent financial performance is achieved above the threshold levels for each of these performance criteria, the number of 2020 LTIP PSUs that will vest will increase up to a maximum of 200% of the targeted amount for that award. No vesting of any portion of the 2020 LTIP PSUs will occur if the Company fails to achieve revenue and pre-tax income amounts equal to at least 90% of the threshold amounts for these criteria. Following the determination of the Company’s achievement with respect to the revenue and pre-tax income criteria for the Measurement Period, the vesting of each 2020 LTIP PSU will be subject to adjustment based on the application of a relative TSR modifier. The amount of the adjustment will be determined based on a comparison of the Company's TSR relative to the TSR of a pre-determined set of peer group companies for the Performance Period. A Monte-Carlo simulation model was used to determine the grant date fair value by simulating a range of possible future stock prices for the Company and each member of the peer group over the Performance Period. |
Derivatives | The Company may enter into foreign currency forward or option contracts (derivative contracts). 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 after-tax unrealized gains or losses from changes in the fair value of Designated Derivative Contracts are recognized as a component of AOCL and are reclassified to earnings in the condensed consolidated statements of comprehensive income in the same period or periods as the related net sales are recorded. The Company includes all hedge components in its assessment of effectiveness for its derivative contracts. When it is probable that a forecasted transaction will not occur, the Company discontinues hedge accounting and the accumulated gains or losses in other comprehensive income or loss (OCI) related to the hedging relationship are immediately recorded in earnings in the condensed consolidated statements of comprehensive income . |
Net Income Per Share | The equity awards excluded from the dilutive effect are excluded due to one of the following: (1) the shares were anti-dilutive; (2) the necessary conditions had not been satisfied for the shares to be issuable based on the Company's performance for the relevant performance period; or (3) the Company recorded a net loss during the period presented. The number of shares stated for each of these excluded awards is the maximum number of shares issuable pursuant to these awards. For those awards with performance criteria, the actual number of shares to be issued pursuant to such awards will be based on Company performance in future periods, net of forfeitures. |
General (Tables)
General (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following is a summary of each standard and the impact on the Company: Standard Description Impact on Adoption ASU No. 2016-02, Leases (as amended by ASUs 2015-14, 2018-01, 2018-10, 2018-11, 2018-20, and 2019-01) Requires a lessee to recognize a lease asset and lease liability in its condensed consolidated balance sheets. A lessee should recognize a right-of-use (ROU) asset representing its right to use the underlying asset for the estimated lease term, and a liability for related lease payments. The Company adopted this ASU (the new lease standard) on a modified retrospective basis beginning April 1, 2019. On adoption, the Company recorded a $230,048 increase to total assets due to the recognition of ROU assets, net of prior legacy US GAAP lease-related balances for deferred rent obligations and tenant allowances of $27,895, as previously recorded in other accrued expenses, deferred rent obligations, and other long-term liabilities, in the condensed consolidated balance sheets. In addition, the Company recorded a corresponding $254,538 increase to total liabilities due to the recognition of lease liabilities, net of a prior legacy US GAAP lease-related balance for prepaid rent of $4,846, as previously recorded in prepaid expenses, in the condensed consolidated balance sheets. ROU assets and lease liabilities include lease obligations for operating leases for retail stores, showrooms, offices, and distribution facilities. ROU assets and related lease liabilities are presented as operating lease assets and operating lease liabilities in the condensed consolidated balance sheets. including its borrowing strategy subject to leverage ratios. However, it did result in additional disclosures and presentation changes to the condensed consolidated statement of cash flows, including supplemental cash flow disclosure, as well as expanded disclosures on existing and new lease commitments. Standard Description Impact on Adoption ASU No. 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities (as amended by ASUs 2018-16 and 2019-04) Seeks to improve the transparency and understandability of information conveyed to financial statement users about an entity's risk management activities and to reduce the complexity of and simplify the application of hedge accounting. This ASU eliminates the requirement to separately measure and report hedge ineffectiveness. The Company adopted this ASU (the new hedging standard) beginning April 1, 2019 on a prospective basis, which did not have a material impact on the condensed consolidated financial statements. However, the Company made a change in accounting policy with respect to ineffective hedges and elected not to exclude hedge components from the periodic assessment of hedge effectiveness. Under legacy US GAAP, these amounts were excluded from hedge effectiveness and therefore as a component of accumulated other comprehensive loss (AOCL), and immediately recognized in selling, general and administrative (SG&A) expenses in the condensed consolidated statements of comprehensive income. Under the new hedge standard, these gains or losses will now be recognized as a component of AOCL and will be reclassified to earnings in the condensed consolidated statements of comprehensive income in the same period or periods as the related net sales are recorded. The comparative condensed consolidated financial statements have not been restated and continue to be reported under legacy US GAAP in effect for those prior reporting periods presented. Refer to Note 9, “Derivative Instruments,” for further information on the Company's hedging instruments. Not Yet Adopted. The FASB has issued the following ASUs that have not yet been adopted by the Company. The following is a summary of each standard, planned adoption date, and the expected impact on the Company: Standard Description Planned Period of Adoption Expected Impact on Adoption ASU No. 2017-04, Goodwill and Other: Simplifying the Test for Goodwill Impairment (as amended by ASU 2019-06) Requires annual and interim goodwill impairment test s be performed by comparing the fair value of a reporting unit with its carrying amount, effectively eliminating step two of the goodwill impairment test under legacy US GAAP. The amount by which the carrying amount exceeds the reporting unit’s fair value will continue to be recognized as an impairment charge. Q1 FY 2021 The adoption of this ASU is not expected to have a material impact on the Company's condensed consolidated financial statements. ASU No. 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (as amended by ASUs 2018-19, 2019-04, and 2019-05) Replaces the incurred loss impairment methodology in legacy US GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Q1 FY 2021 The Company is currently evaluating the impact on adoption of this ASU; however, the Company does not expect that the adoption will have a material impact on its condensed consolidated financial statements. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability | Sales Returns. The following table provides activity during the six months ended September 30, 2019 related to estimated sales returns for the Company’s existing customer contracts for all channels: Contract Asset Contract Liability Balance, March 31, 2019 $ 10,441 $ (24,787 ) Net additions to sales return allowance* 12,297 (37,604 ) Actual returns (14,763 ) 43,080 Balance, September 30, 2019 $ 7,975 $ (19,311 ) The following table provides activity during the six months ended September 30, 2018 related to estimated sales returns for the Company’s existing customer contracts for all channels: Contract Asset Contract Liability Balance, March 31, 2018 $ 11,251 $ (23,156 ) Net additions to sales return allowance* 12,277 (38,098 ) Actual returns (14,650 ) 40,538 Balance, September 30, 2018 $ 8,878 $ (20,716 ) * Net additions to sales return allowance include provision for anticipated sales returns which consists of both contractual return rights and discretionary authorized returns. |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill and other intangible assets | The Company's goodwill and other intangible assets are recorded in the condensed consolidated balance sheets , as follows: September 30, 2019 March 31, 2019 Goodwill UGG brand $ 6,101 $ 6,101 HOKA brand 7,889 7,889 Total goodwill 13,990 13,990 Other intangible assets Indefinite-lived intangible assets Trademarks 15,454 15,454 Definite-lived intangible assets Trademarks 55,245 55,245 Other 51,646 51,981 Total gross carrying amount 106,891 107,226 Accumulated amortization (73,061 ) (71,186 ) Net definite-lived intangible assets 33,830 36,040 Total other intangible assets, net 49,284 51,494 Total $ 63,274 $ 65,484 |
Schedule of finite-lived intangible assets | A reconciliation of the changes in total other intangible assets, net, recorded in the condensed consolidated balance sheets is as follows: Balance, March 31, 2019 $ 51,494 Amortization expense (2,201 ) Foreign currency translation net loss (9 ) Balance, September 30, 2019 $ 49,284 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The assets and liabilities that are measured on a recurring basis at fair value in the condensed consolidated balance sheets were as follows: Measured Using September 30, 2019 Level 1 Level 2 Level 3 Non-qualified deferred compensation asset $ 7,332 $ 7,332 $ — $ — Non-qualified deferred compensation liability (4,380 ) (4,380 ) — — Designated Derivative Contracts asset 1,557 — 1,557 — Non-Designated Derivative Contracts asset 317 — 317 — Non-Designated Derivative Contracts liability (172 ) — (172 ) — Measured Using March 31, 2019 Level 1 Level 2 Level 3 Non-qualified deferred compensation asset $ 7,300 $ 7,300 $ — $ — Non-qualified deferred compensation liability (4,447 ) (4,447 ) — — |
Income Taxes - (Tables)
Income Taxes - (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | Income tax expense and the effective income tax rate were as follows: Three Months Ended September 30, Six Months Ended September 30, 2019 2018 2019 2018 Income tax expense $ 19,413 $ 15,403 $ 9,159 $ 6,759 Effective income tax rate 20.0 % 17.2 % 13.5 % 13.3 % |
Leases and Other Commitments -
Leases and Other Commitments - (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease, Cost | The components of rent expense for operating leases recorded in the condensed consolidated statements of comprehensive income were as follows: Three Months Ended September 30, 2019 Six Months Ended September 30, 2019 Operating $ 14,455 $ 28,702 Variable 6,135 11,589 Short-term 718 1,260 Total $ 21,308 $ 41,551 Supplemental information for amounts presented in the condensed consolidated statements of cash flows related to operating leases is as follows: Three Months Ended September 30, 2019 Six Months Ended September 30, 2019 Non-cash operating activities Operating lease assets obtained in exchange for lease liabilities* $ 11,715 $ 28,137 Reductions to operating lease assets resulting from reductions to lease liabilities* (2,120 ) (4,669 ) *Amounts disclosed include non-cash additions or reductions resulting from lease remeasurements. condensed consolidated balance sheets are as follows: September 30, 2019 Weighted-average remaining lease term in years 6.4 Weighted-average discount rate 3.3 % |
Lessee, Operating Lease, Disclosure | The components of rent expense for operating leases recorded in the condensed consolidated statements of comprehensive income under legacy US GAAP were as follows: Three Months Ended September 30, 2018 Six Months Ended September 30, 2018 Minimum rentals $ 15,350 $ 30,150 Contingent rentals 1,733 2,938 Total $ 17,083 $ 33,088 |
Lessee, Operating Lease, Liability, Maturity | Maturities of undiscounted operating lease liabilities remaining as of September 30, 2019 under the new lease standard, with a reconciliation to the present value of operating lease liabilities recorded in the condensed consolidated balance sheets , were as follows: Years Ending March 31, Amount 2020 $ 25,908 2021 51,849 2022 43,816 2023 38,797 2024 33,990 Thereafter 84,744 Total undiscounted future lease payments 279,104 Less: Imputed interest (28,582 ) Total $ 250,522 |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum commitments under operating lease contracts as of March 31, 2019 under legacy US GAAP were as follows: Years Ending March 31, Amount 2020 $ 53,015 2021 47,803 2022 40,629 2023 35,915 2024 31,329 Thereafter 81,746 Total $ 290,437 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Nonvested Stock Units Activity | The Company granted Annual RSUs and Annual PSUs under the 2015 SIP, as summarized below: Six Months Ended September 30, 2019 2018 Shares Granted Weighted-average grant date fair value per share Shares Granted Weighted-average grant date fair value per share Annual RSUs 38,307 $ 173.65 59,235 $ 115.65 Annual PSUs 19,938 174.36 31,320 116.34 Total 58,245 $ 173.89 90,555 $ 115.89 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | As of September 30, 2019 , the Company had the following derivative contracts recorded at fair value in the condensed consolidated balance sheets : Designated Derivative Contracts Non-Designated Derivative Contracts Total Notional value $ 48,528 $ 42,825 $ 91,353 Fair value recorded in other current assets 1,557 317 1,874 Fair value recorded in other accrued expenses — (172 ) (172 ) |
Schedule of location and amount of gains and losses related to derivatives designated as hedging instruments reported in consolidated financial statements | The following table summarizes the effect of Designated Derivative Contracts: Three Months Ended September 30, Six Months Ended September 30, 2019 2018 2019 2018 Amount of gain recognized in OCI $ 2,190 $ 588 $ 1,773 $ 7,358 Amount of gain reclassified from AOCL into net sales 216 2,166 216 2,166 Amount of gain excluded from effectiveness testing recognized in SG&A expenses* — 634 — 1,480 *Amounts presented for the three and six months ended September 30, 2018 were recognized under legacy US GAAP. Beginning April 1, 2019, under the new hedging standard, these amounts are now recognized as a component of AOCL and were reclassified into earnings during the three and six months ended September 30, 2019 . Amounts of income tax effects recorded in the condensed consolidated statements of comprehensive income for changes in AOCL for unrealized gains or losses for Designated Derivative Contracts were as follows: Three Months Ended September 30, Six Months Ended September 30, 2019 2018 2019 2018 Income tax expense (benefit) $ 477 $ (381 ) $ 377 $ 1,066 |
Schedule of location and amount of gains and losses related to derivatives not designated as hedging instruments reported in consolidated financial statements | The following table summarizes the effect of Non-Designated Derivative Contracts: Three Months Ended September 30, Six Months Ended September 30, 2019 2018 2019 2018 Amount of gain recognized in SG&A expenses $ 502 $ 250 $ 146 $ 737 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock Repurchases | Stock repurchase activity under these programs for the six months ended September 30, 2019 was as follows: Total number of shares repurchased* 1,296,201 Average price paid per share $ 146.89 Dollar value of shares repurchased $ 190,405 *All shares were repurchased as part of publicly-announced programs in open-market transactions. |
Components of accumulated other comprehensive income | The components within AOCL, net of tax, recorded in the condensed consolidated balance sheets , were as follows: September 30, 2019 March 31, 2019 Unrealized gain on cash flow hedges $ 1,180 $ — Cumulative foreign currency translation loss (25,977 ) (22,654 ) Total $ (24,797 ) $ (22,654 ) |
Basic and Diluted Shares (Table
Basic and Diluted Shares (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares | The reconciliation of basic to diluted weighted-average common shares outstanding, was as follows: Three Months Ended September 30, Six Months Ended September 30, 2019 2018 2019 2018 Basic 28,483,000 29,849,000 28,785,000 30,134,000 Dilutive effect of equity awards 222,000 179,000 254,000 193,000 Diluted 28,705,000 30,028,000 29,039,000 30,327,000 Excluded* Annual RSUs and Annual PSUs 54,000 29,000 52,000 55,000 LTIP PSUs 153,000 84,000 153,000 84,000 LTIP NQSOs 170,000 377,000 170,000 377,000 Deferred Non-Employee Director Equity Awards — — — 1,000 *The equity awards excluded from the dilutive effect are excluded due to one of the following: (1) the shares were anti-dilutive; (2) the necessary conditions had not been satisfied for the shares to be issuable based on the Company's performance for the relevant performance period; or (3) the Company recorded a net loss during the period presented. The number of shares stated for each of these excluded awards is the maximum number of shares issuable pursuant to these awards. For those awards with performance criteria, the actual number of shares to be issued pursuant to such awards will be based on Company performance in future periods, net of forfeitures. Refer to Note 8, “Stock Compensation,” for further information. |
Reportable Operating Segments (
Reportable Operating Segments (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of business segments information | Reportable operating segment information, with a reconciliation to the condensed consolidated statements of comprehensive income , is summarized as follows: Three Months Ended September 30, Six Months Ended September 30, 2019 2018 2019 2018 Net sales UGG brand wholesale $ 332,020 $ 319,589 $ 417,420 $ 400,942 HOKA brand wholesale 60,959 43,561 124,965 83,515 Teva brand wholesale 17,091 15,878 47,922 49,074 Sanuk brand wholesale 8,166 10,933 22,773 31,436 Other brands wholesale 25,282 18,064 27,009 20,701 Direct-to-Consumer 98,687 93,888 178,955 166,839 Total $ 542,205 $ 501,913 $ 819,044 $ 752,507 Three Months Ended September 30, Six Months Ended September 30, 2019 2018 2019 2018 Income (loss) from operations UGG brand wholesale $ 135,663 $ 134,029 $ 145,104 $ 139,898 HOKA brand wholesale 14,054 8,170 25,412 13,898 Teva brand wholesale 3,523 1,847 11,839 9,911 Sanuk brand wholesale 238 291 2,173 4,491 Other brands wholesale 6,958 5,287 7,090 5,637 Direct-to-Consumer 2,935 2,975 (1,637 ) (4,449 ) Unallocated overhead costs (66,240 ) (62,187 ) (124,267 ) (118,388 ) Total $ 97,131 $ 90,412 $ 65,714 $ 50,998 Assets allocated to each reportable operating segment, with a reconciliation to the condensed consolidated balance sheets , were as follows: September 30, 2019 March 31, 2019 Assets UGG brand wholesale $ 691,484 $ 240,411 HOKA brand wholesale 84,589 94,157 Teva brand wholesale 39,521 76,370 Sanuk brand wholesale 44,534 71,285 Other brands wholesale 65,479 14,618 Direct-to-Consumer 240,048 95,501 Total assets from reportable operating segments 1,165,655 592,342 Unallocated cash and cash equivalents 177,673 589,692 Unallocated deferred tax assets, net 31,253 30,870 Unallocated other corporate assets 317,078 214,302 Total $ 1,691,659 $ 1,427,206 |
Concentration of Business (Tabl
Concentration of Business (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
Schedules of Revenue Concentration of Risk | The Company sells its products to customers throughout the US and to foreign customers in various countries, with concentrations as follows: Three Months Ended September 30, Six Months Ended September 30, 2019 2018 2019 2018 International net sales $ 184,234 $ 190,320 $ 293,778 $ 299,207 % of net sales 34.0 % 37.9 % 35.9 % 39.8 % Net sales in foreign currencies $ 159,059 $ 162,587 $ 218,416 $ 227,013 % of net sales 29.3 % 32.4 % 26.7 % 30.2 % Ten largest customers as % of net sales 36.6 % 36.6 % 30.4 % 31.6 % |
Schedule of long-lived assets, which consist of property and equipment, by major country | Long-lived assets, which consist of property and equipment, net, recorded in the condensed consolidated balance sheets , were as follows: September 30, 2019 March 31, 2019 US $ 196,598 $ 196,702 Foreign* 15,725 17,094 Total $ 212,323 $ 213,796 * No single foreign country’s net property and equipment comprised 10.0% or more of the Company’s total property and equipment, net, as of September 30, 2019 and March 31, 2019 . |
General - Narrative (Details)
General - Narrative (Details) | 6 Months Ended |
Sep. 30, 2019segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 6 |
General - New Accounting Pronou
General - New Accounting Pronouncements (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Apr. 01, 2019 | Mar. 31, 2019 | Jul. 01, 2018 | Apr. 01, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Operating lease assets | $ 227,988 | ||||
Deferred rent obligations | $ 21,107 | ||||
Total | $ 250,522 | ||||
Retained earnings | $ (1,069) | $ (252) | $ 720 | ||
Accounting Standards Update 2016-02 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Operating lease assets | 230,048 | ||||
Deferred rent obligations | (27,895) | ||||
Total | 254,538 | ||||
Prepaid rent | (4,846) | ||||
Retained earnings | $ (1,069) |
Revenue Recognition - Narrativ
Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Mar. 31, 2018 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Contract length | Contract assets represent the Company’s right to consideration subject to conditions other than the passage of time, such as additional performance obligations to be satisfied. Contract liabilities are performance obligations that the Company expects to satisfy or relieve within the next 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 liability | $ 19,311 | $ 24,787 | $ 20,716 | $ 23,156 |
Minimum | ||||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Payment terms | 30 days | |||
Maximum | ||||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Payment terms | 60 days | |||
Loyalty Programs | ||||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Contract liability | $ 5,170 | $ 5,171 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Contract Asset | ||
Balance, March 31, 2019 | $ 10,441 | $ 11,251 |
Net additions to sales return allowance | 12,297 | 12,277 |
Actual returns | (14,763) | (14,650) |
Balance, September 30, 2019 | 7,975 | 8,878 |
Contract Liability | ||
Balance, March 31, 2019 | (24,787) | (23,156) |
Net additions to sales return allowance | (37,604) | (38,098) |
Actual returns | 43,080 | 40,538 |
Balance, September 30, 2019 | $ (19,311) | $ (20,716) |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Mar. 31, 2019 |
Indefinite-lived intangible assets | ||
Goodwill | $ 13,990 | $ 13,990 |
Trademarks | 15,454 | 15,454 |
Definite-lived intangible assets | ||
Total gross carrying amount | 106,891 | 107,226 |
Accumulated amortization | (73,061) | (71,186) |
Net definite-lived intangible assets | 33,830 | 36,040 |
Total other intangible assets, net | 49,284 | 51,494 |
Total | 63,274 | 65,484 |
UGG brand wholesale | ||
Indefinite-lived intangible assets | ||
Goodwill | 6,101 | 6,101 |
HOKA brand wholesale | ||
Indefinite-lived intangible assets | ||
Goodwill | 7,889 | 7,889 |
Trademarks | ||
Definite-lived intangible assets | ||
Total gross carrying amount | 55,245 | 55,245 |
Other Intangible Assets | ||
Definite-lived intangible assets | ||
Total gross carrying amount | $ 51,646 | $ 51,981 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 2,201 | $ 3,400 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets Schedule of Changes in Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Finite-lived Intangible Assets [Roll Forward] | ||
Intangible assets, net, beginning balance | $ 51,494 | |
Amortization expense | (2,201) | $ (3,400) |
Foreign currency translation net gain (loss) | (9) | |
Intangible assets, net, ending balance | $ 49,284 |
Fair Value Measurements Schedul
Fair Value Measurements Schedule of Fair Value Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Mar. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-qualified deferred compensation asset | $ 7,332 | $ 7,300 |
Non-qualified deferred compensation liability | (4,380) | (4,447) |
Derivative contracts liability | (172) | |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-qualified deferred compensation asset | 7,332 | 7,300 |
Non-qualified deferred compensation liability | (4,380) | $ (4,447) |
Non-Designated Derivative Contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative contracts assets | 317 | |
Derivative contracts liability | (172) | |
Non-Designated Derivative Contracts | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative contracts assets | 317 | |
Derivative contracts liability | (172) | |
Derivatives designated as cash flow hedges | Designated Derivative Contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative contracts assets | 1,557 | |
Derivative contracts liability | 0 | |
Derivatives designated as cash flow hedges | Designated Derivative Contracts | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative contracts assets | $ 1,557 |
Fair Value Measurements Narrati
Fair Value Measurements Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Mar. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-qualified deferred compensation asset | $ 7,332 | $ 7,300 |
Non-qualified deferred compensation liability | 4,380 | $ 4,447 |
Other Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-qualified deferred compensation asset | 7,332 | |
Other Accrued Liabilities, Current | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Accrued deferred compensation liability | 988 | |
Other Long Term Liabilities | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other long term liabilities | $ 3,392 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 19,413 | $ 15,403 | $ 9,159 | $ 6,759 |
Effective income tax rate | 20.00% | 17.20% | 13.50% | 13.30% |
Income Taxes - Narrative (Deta
Income Taxes - Narrative (Details) $ in Thousands | 6 Months Ended |
Sep. 30, 2019USD ($) | |
Income Tax Disclosure [Abstract] | |
Increase (decrease) in unrecognized tax benefits | $ 2,700 |
Unrecognized tax benefits and penalties and interest | $ 16,098 |
Revolving Credit Facilities a_2
Revolving Credit Facilities and Mortgage Payable - Primary Credit Facility (Details) - Primary Credit Facility - Line of Credit - USD ($) | 1 Months Ended | 6 Months Ended | |
Oct. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
LIBOR based interest rates | |||
Notes Payable and Long-Term Debt | |||
Interest rate, effective percentage | 3.14% | ||
Alternate Base Rate based interest rates | |||
Notes Payable and Long-Term Debt | |||
Interest rate, effective percentage | 5.13% | ||
Revolving Credit Facility | |||
Notes Payable and Long-Term Debt | |||
Term of agreement (in years) | 5 years | ||
Current borrowing capacity | $ 400,000,000 | ||
Proceeds from lines of credit | $ 16,000,000 | ||
Repayments of lines of credit | (16,000,000) | ||
Long-term line of credit | 0 | ||
Outstanding letters of credit | 549,000 | ||
Amount available under the credit agreement | $ 399,451,000 | ||
Revolving Credit Facility | Subsequent Event | |||
Notes Payable and Long-Term Debt | |||
Proceeds from lines of credit | $ 34,000,000 | ||
Repayments of lines of credit | (25,000,000) | ||
Long-term line of credit | 9,000,000 | ||
Outstanding letters of credit | 549,000 | ||
Amount available under the credit agreement | $ 390,451,000 | ||
Maximum | |||
Notes Payable and Long-Term Debt | |||
Capacity available for letters of credit | $ 25,000,000 |
Revolving Credit Facilities a_3
Revolving Credit Facilities and Mortgage Payable - China Line of Credit (Details) | 1 Months Ended | 6 Months Ended | ||
Oct. 31, 2019USD ($) | Aug. 31, 2013USD ($) | Sep. 30, 2019USD ($) | Aug. 31, 2013CNY (¥) | |
China Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Guarantor obligation | 108.50% | |||
Line of Credit | Subsequent Event | Second Amended China Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Amount available under the credit agreement | $ 23,129,000 | |||
Line of Credit | Subsequent Event | Second Amended China Credit Facility, Overdraft Sublimit | ||||
Debt Instrument [Line Items] | ||||
Long-term line of credit | 18,855,000 | |||
Line of Credit | Revolving Credit Facility | Second Amended China Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 42,012,000 | ¥ 300,000,000 | ||
Interest rate, effective percentage | 4.20% | |||
Proceeds from lines of credit | $ 12,981,000 | |||
Repayments of lines of credit | 0 | |||
Long-term line of credit | 12,981,000 | |||
Outstanding bank guarantees | 28,000 | |||
Amount available under the credit agreement | $ 29,003,000 | |||
Line of Credit | Revolving Credit Facility | Second Amended China Credit Facility, Overdraft Sublimit | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility overdraft facility sublimit | $ 14,004,000 | ¥ 100,000,000 | ||
Line of Credit | Revolving Credit Facility | Subsequent Event | Second Amended China Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Proceeds from lines of credit | 5,874,000 | |||
Outstanding bank guarantees | $ 28,000 | |||
Maximum | Second Amended China Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument term | 12 months |
Revolving Credit Facilities a_4
Revolving Credit Facilities and Mortgage Payable - Japan Line of Credit (Details) - Japan Credit Facility | 1 Months Ended | 6 Months Ended | ||
Oct. 31, 2019USD ($) | Mar. 31, 2016JPY (¥) | Sep. 30, 2019USD ($) | Mar. 31, 2016USD ($) | |
Notes Payable and Long-Term Debt | ||||
Maximum borrowing capacity | ¥ 5,500,000,000 | $ 50,928,000 | ||
Maximum | ||||
Notes Payable and Long-Term Debt | ||||
Debt instrument term | 6 months | |||
Tokyo Interbank Offered Rate (TIBOR) | ||||
Notes Payable and Long-Term Debt | ||||
Spread on variable interest rate (as a percent) | 0.40% | |||
Interest rate, effective percentage | 0.48% | |||
Revolving Credit Facility | Line of Credit | ||||
Notes Payable and Long-Term Debt | ||||
Proceeds from lines of credit | $ 0 | |||
Repayments of lines of credit | 0 | |||
Current borrowing capacity | 0 | |||
Amount available under the credit agreement | $ 50,928,000 | |||
Subsequent Event | Line of Credit | ||||
Notes Payable and Long-Term Debt | ||||
Amount available under the credit agreement | $ 50,928,000 | |||
Long-term line of credit | 0 | |||
Subsequent Event | Revolving Credit Facility | Line of Credit | ||||
Notes Payable and Long-Term Debt | ||||
Proceeds from lines of credit | $ 0 |
Revolving Credit Facilities a_5
Revolving Credit Facilities and Mortgage Payable - Mortgage (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Jul. 31, 2014 | Sep. 30, 2019 | Mar. 31, 2019 | |
Debt Instrument [Line Items] | |||
Short-term borrowings | $ 13,599 | $ 603 | |
Mortgage payable | 30,592 | $ 30,901 | |
Mortgages | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 33,931 | ||
Long-term debt gross | 31,210 | ||
Short-term borrowings | 618 | ||
Mortgage payable | $ 30,592 | ||
Fixed interest rate | 4.928% | ||
Debt amortization period | 30 years | ||
Balloon payment to be paid | $ 23,695 |
Leases and Other Commitments _2
Leases and Other Commitments - Leases Narrative (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Lessee, Lease, Description [Line Items] | |
Lease commitments for leases not yet commenced | $ 38,977 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease renewal term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease renewal term | 15 years |
Leases and Other Commitments _3
Leases and Other Commitments - Schedule of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Lease, Cost [Abstract] | ||||
Operating | $ 14,455 | $ 28,702 | ||
Variable | 6,135 | 11,589 | ||
Short-term | 718 | 1,260 | ||
Total | $ 21,308 | $ 41,551 | ||
Operating Lease Cost Under Legacy GAAP | ||||
Minimum rentals | $ 15,350 | $ 30,150 | ||
Contingent rentals | 1,733 | 2,938 | ||
Total | $ 17,083 | $ 33,088 |
Leases and Other Commitments _4
Leases and Other Commitments - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Mar. 31, 2019 |
Future Operating Lease Payments Due [Abstract] | ||
2020 | $ 25,908 | |
2021 | 51,849 | |
2022 | 43,816 | |
2023 | 38,797 | |
2024 | 33,990 | |
Thereafter | 84,744 | |
Total undiscounted future lease payments | 279,104 | |
Less: Imputed interest | (28,582) | |
Total | $ 250,522 | |
Future Minimum Lease Commitments Under Legacy GAAP | ||
2020 | $ 53,015 | |
2021 | 47,803 | |
2022 | 40,629 | |
2023 | 35,915 | |
2024 | 31,329 | |
Thereafter | 81,746 | |
Total | $ 290,437 |
Leases and Other Commitments _5
Leases and Other Commitments - Schedule of Supplemental Lease Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Weighted-average remaining lease term in years | 6 years 4 months 24 days | 6 years 4 months 24 days |
Weighted-average discount rate | 3.30% | 3.30% |
Right-of-use assets obtained in exchange for lease liabilities | $ 11,715 | $ 28,137 |
Reductions to right-of-use assets resulting from reductions to lease liabilities | $ (2,120) | $ (4,669) |
Stock Compensation - Narrative
Stock Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
LTIP NQSOs | Stock Incentive Plan 2015 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted (in shares) | 0 | ||||
Annual RSUs | Stock Incentive Plan 2015 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period (in years) | 3 years | ||||
Granted (in shares) | 38,307 | 59,235 | |||
Weighted-average grant date fair value (in dollars per share) | $ 173.65 | $ 115.65 | |||
Annual PSUs | Stock Incentive Plan 2015 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period (in years) | 3 years | ||||
Granted (in shares) | 19,938 | 31,320 | |||
Weighted-average grant date fair value (in dollars per share) | $ 174.36 | $ 116.34 | |||
Annual RSUs and Annual PSUs | Stock Incentive Plan 2015 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized stock compensation expense | $ 13,593 | $ 13,593 | $ 13,593 | ||
Granted (in shares) | 58,245 | 90,555 | |||
Weighted-average grant date fair value (in dollars per share) | $ 173.89 | $ 115.89 | |||
LTIP PSUs | 2015 SIP | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized stock compensation expense | $ 10,147 | $ 10,147 | $ 10,147 | ||
2007 LTIP SARs | Stock Incentive Plan 2015 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 0 | ||||
Subsequent Event | Annual RSUs | Stock Incentive Plan 2015 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 0 | ||||
Subsequent Event | Annual PSUs | Stock Incentive Plan 2015 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 0 | ||||
2020 | LTIP PSUs | 2015 SIP | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period (in years) | 3 years | ||||
Award requisite service period | 36 months | ||||
Granted (in shares) | 38,174 | ||||
Weighted-average grant date fair value (in dollars per share) | $ 146.96 | ||||
2020 | Maximum | LTIP PSUs | 2015 SIP | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting rights percentage | 200.00% | ||||
2020 | Minimum | LTIP PSUs | 2015 SIP | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Financial performance achievement percentage | 90.00% |
Stock Compensation - Annual Awa
Stock Compensation - Annual Awards (Details) - Stock Incentive Plan 2015 - $ / shares | 6 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Annual RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 38,307 | 59,235 |
Weighted-average grant date fair value (in dollars per share) | $ 173.65 | $ 115.65 |
Annual PSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 19,938 | 31,320 |
Weighted-average grant date fair value (in dollars per share) | $ 174.36 | $ 116.34 |
Annual RSUs and Annual PSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 58,245 | 90,555 |
Weighted-average grant date fair value (in dollars per share) | $ 173.89 | $ 115.89 |
Derivative Instruments (Details
Derivative Instruments (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Oct. 31, 2019USD ($)counterparty | Sep. 30, 2019USD ($)counterparty | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)counterparty | Sep. 30, 2018USD ($) | Mar. 31, 2019USD ($) | |
Foreign currency exchange contracts and hedging | ||||||
Fair value recorded in other accrued expenses | $ (172,000) | $ (172,000) | ||||
Maturity of foreign currency derivatives | 9 months | |||||
Income tax expense (benefit) | $ 477,000 | $ 377,000 | ||||
Income tax expense (benefit) | $ (381,000) | $ 1,066,000 | ||||
Foreign currency exchange contracts | ||||||
Foreign currency exchange contracts and hedging | ||||||
Number of counterparties in derivative contracts | counterparty | 6 | 6 | ||||
Maturity of foreign currency derivatives | 6 months | |||||
Designated Derivative Contracts | Derivatives designated as cash flow hedges | ||||||
Foreign currency exchange contracts and hedging | ||||||
Fair value recorded in other current assets | $ 1,557,000 | $ 1,557,000 | ||||
Fair value recorded in other accrued expenses | 0 | 0 | ||||
Amount of gain recognized in OCI | 2,190,000 | 1,773,000 | ||||
Amount of gain recognized in OCI | 588,000 | 7,358,000 | ||||
Amount of gain reclassified from AOCL into net sales | 216,000 | 216,000 | ||||
Amount of gain reclassified from AOCL into net sales | 2,166,000 | 2,166,000 | ||||
Amount of gain excluded from effectiveness testing recognized in SG&A expenses | 634,000 | 1,480,000 | ||||
Non-Designated Derivative Contracts | ||||||
Foreign currency exchange contracts and hedging | ||||||
Fair value recorded in other current assets | 317,000 | 317,000 | ||||
Fair value recorded in other accrued expenses | (172,000) | (172,000) | ||||
Non-Designated Derivative Contracts | Foreign currency exchange contracts | ||||||
Foreign currency exchange contracts and hedging | ||||||
Amount of gain recognized in SG&A expenses | 502,000 | $ 250,000 | 146,000 | $ 737,000 | ||
Fair Value, Measurements, Recurring | ||||||
Foreign currency exchange contracts and hedging | ||||||
Fair value recorded in other current assets | 1,874,000 | 1,874,000 | ||||
Fair Value, Measurements, Recurring | Foreign currency exchange contracts | ||||||
Foreign currency exchange contracts and hedging | ||||||
Notional value | 91,353,000 | 91,353,000 | $ 0 | |||
Fair Value, Measurements, Recurring | Designated Derivative Contracts | Derivatives designated as cash flow hedges | Foreign currency exchange contracts | ||||||
Foreign currency exchange contracts and hedging | ||||||
Notional value | 48,528,000 | 48,528,000 | ||||
Fair Value, Measurements, Recurring | Non-Designated Derivative Contracts | Foreign currency exchange contracts | ||||||
Foreign currency exchange contracts and hedging | ||||||
Notional value | $ 42,825,000 | $ 42,825,000 | ||||
Subsequent Event | Foreign currency exchange contracts | ||||||
Foreign currency exchange contracts and hedging | ||||||
Number of counterparties in derivative contracts | counterparty | 6 | |||||
Subsequent Event | Designated Derivative Contracts | Derivatives designated as cash flow hedges | Foreign currency exchange contracts | ||||||
Foreign currency exchange contracts and hedging | ||||||
Notional value | $ 0 | |||||
Subsequent Event | Non-Designated Derivative Contracts | Foreign currency exchange contracts | ||||||
Foreign currency exchange contracts and hedging | ||||||
Notional value | $ 6,427,000 | |||||
Maturity of foreign currency derivatives | 2 months |
Stockholders' Equity - Repurcha
Stockholders' Equity - Repurchase Programs (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Oct. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2019 | |
Equity, Class of Treasury Stock [Line Items] | ||||||
Dollar value of shares remaining for repurchase | $ 159,807 | $ 159,807 | ||||
Shares repurchased (in shares) | 1,296,201 | |||||
Repurchased stock acquired average cost per share (in dollars per share) | $ 146.89 | |||||
Dollar value of shares repurchased | $ 155,400 | $ 35,005 | $ 124,736 | $ 9,999 | $ 190,405 | |
Subsequent Event | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Dollar value of shares remaining for repurchase | $ 159,807 | |||||
Shares repurchased (in shares) | 0 |
Stockholders' Equity - Accumul
Stockholders' Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Mar. 31, 2019 |
Stockholders' Equity Note [Abstract] | ||
Unrealized gain on cash flow hedges | $ 1,180 | |
Unrealized gain on cash flow hedges | $ 0 | |
Cumulative foreign currency translation loss | (25,977) | (22,654) |
Total | $ (24,797) | $ (22,654) |
Basic and Diluted Shares (Detai
Basic and Diluted Shares (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted average number of basic shares outstanding (in shares) | 28,483,000 | 29,849,000 | 28,785,000 | 30,134,000 |
Weighted average number diluted shares outstanding adjustment (in shares) | 222,000 | 179,000 | 254,000 | 193,000 |
Weighted average number of diluted shares outstanding (in shares) | 28,705,000 | 30,028,000 | 29,039,000 | 30,327,000 |
Annual RSUs and Annual PSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 54,000 | 29,000 | 52,000 | 55,000 |
LTIP PSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 153,000 | 84,000 | 153,000 | 84,000 |
LTIP NQSOs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 170,000 | 377,000 | 170,000 | 377,000 |
Deferred Non-Employee Director Equity Awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 0 | 0 | 1,000 |
Reportable Operating Segments_2
Reportable Operating Segments (Details) | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | Mar. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 6 | ||||
Net sales | $ 542,205,000 | $ 501,913,000 | $ 819,044,000 | $ 752,507,000 | |
(Loss) income from operations | 97,131,000 | 90,412,000 | 65,714,000 | 50,998,000 | |
Total assets | 1,691,659,000 | 1,691,659,000 | $ 1,427,206,000 | ||
Unallocated cash and cash equivalents | 177,673,000 | 177,673,000 | 589,692,000 | ||
Unallocated deferred tax assets, net | 31,253,000 | 31,253,000 | 30,870,000 | ||
Reportable segments | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | 1,165,655,000 | 1,165,655,000 | 592,342,000 | ||
Reportable segments | UGG brand wholesale | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | 691,484,000 | 691,484,000 | 240,411,000 | ||
Reportable segments | HOKA brand wholesale | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | 84,589,000 | 84,589,000 | 94,157,000 | ||
Reportable segments | Teva brand wholesale | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | 39,521,000 | 39,521,000 | 76,370,000 | ||
Reportable segments | Sanuk brand wholesale | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | 44,534,000 | 44,534,000 | 71,285,000 | ||
Reportable segments | Other brands wholesale | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | 65,479,000 | 65,479,000 | 14,618,000 | ||
Reportable segments | Direct-to-Consumer | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | 240,048,000 | 240,048,000 | 95,501,000 | ||
Segment reconciling items | |||||
Segment Reporting Information [Line Items] | |||||
Intersegment profit | 0 | ||||
(Loss) income from operations | (66,240,000) | (62,187,000) | (124,267,000) | (118,388,000) | |
Unallocated other corporate assets | 317,078,000 | 317,078,000 | $ 214,302,000 | ||
Wholesale | UGG brand wholesale | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 332,020,000 | 319,589,000 | 417,420,000 | 400,942,000 | |
Wholesale | HOKA brand wholesale | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 60,959,000 | 43,561,000 | 124,965,000 | 83,515,000 | |
Wholesale | Teva brand wholesale | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 17,091,000 | 15,878,000 | 47,922,000 | 49,074,000 | |
Wholesale | Sanuk brand wholesale | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 8,166,000 | 10,933,000 | 22,773,000 | 31,436,000 | |
Wholesale | Other brands wholesale | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 25,282,000 | 18,064,000 | 27,009,000 | 20,701,000 | |
Wholesale | Reportable segments | UGG brand wholesale | |||||
Segment Reporting Information [Line Items] | |||||
(Loss) income from operations | 135,663,000 | 134,029,000 | 145,104,000 | 139,898,000 | |
Wholesale | Reportable segments | HOKA brand wholesale | |||||
Segment Reporting Information [Line Items] | |||||
(Loss) income from operations | 14,054,000 | 8,170,000 | 25,412,000 | 13,898,000 | |
Wholesale | Reportable segments | Teva brand wholesale | |||||
Segment Reporting Information [Line Items] | |||||
(Loss) income from operations | 3,523,000 | 1,847,000 | 11,839,000 | 9,911,000 | |
Wholesale | Reportable segments | Sanuk brand wholesale | |||||
Segment Reporting Information [Line Items] | |||||
(Loss) income from operations | 238,000 | 291,000 | 2,173,000 | 4,491,000 | |
Wholesale | Reportable segments | Other brands wholesale | |||||
Segment Reporting Information [Line Items] | |||||
(Loss) income from operations | 6,958,000 | 5,287,000 | 7,090,000 | 5,637,000 | |
Directly to Consumer | Direct-to-Consumer | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 98,687,000 | 93,888,000 | 178,955,000 | 166,839,000 | |
Directly to Consumer | Reportable segments | Direct-to-Consumer | |||||
Segment Reporting Information [Line Items] | |||||
(Loss) income from operations | $ 2,935,000 | $ 2,975,000 | $ (1,637,000) | $ (4,449,000) |
Concentration of Business (Deta
Concentration of Business (Details) $ in Thousands | Sep. 30, 2019USD ($)suppliertannery | Mar. 31, 2019USD ($) | Sep. 30, 2019USD ($)suppliertannery | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)suppliertannery | Sep. 30, 2018USD ($) |
Concentration Risk [Line Items] | ||||||
Net sales | $ 542,205 | $ 501,913 | $ 819,044 | $ 752,507 | ||
Number of tanneries | tannery | 2 | 2 | 2 | |||
Number of suppliers | supplier | 2 | 2 | 2 | |||
Long-lived assets | $ 212,323 | $ 213,796 | $ 212,323 | $ 212,323 | ||
Sales Revenue, Net | International net sales | ||||||
Concentration Risk [Line Items] | ||||||
Net sales | $ 184,234 | $ 190,320 | $ 293,778 | $ 299,207 | ||
Concentration risk (as a percent) | 34.00% | 37.90% | 35.90% | 39.80% | ||
Sales Revenue, Net | Net sales in foreign currencies | ||||||
Concentration Risk [Line Items] | ||||||
Net sales | $ 159,059 | $ 162,587 | $ 218,416 | $ 227,013 | ||
Concentration risk (as a percent) | 29.30% | 32.40% | 26.70% | 30.20% | ||
Sales Revenue, Net | Customer Concentration Risk | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk (as a percent) | 36.60% | 36.60% | 30.40% | 31.60% | ||
Accounts Receivable | Customer Concentration Risk | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk (as a percent) | 11.80% | 0.00% | ||||
US | ||||||
Concentration Risk [Line Items] | ||||||
Long-lived assets | $ 196,598 | $ 196,702 | $ 196,598 | $ 196,598 | ||
Foreign | ||||||
Concentration Risk [Line Items] | ||||||
Long-lived assets | $ 15,725 | $ 17,094 | $ 15,725 | $ 15,725 |
Uncategorized Items - deck09302
Label | Element | Value |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (1,069,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 720,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (252,000) |