COVER PAGE
COVER PAGE - shares | 3 Months Ended | |
Jun. 30, 2023 | Jul. 13, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
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 $0.01 per share | |
Trading Symbol | DECK | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 26,134,458 | |
Entity Central Index Key | 0000910521 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --03-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
ASSETS | ||
Cash and cash equivalents | $ 1,046,889 | $ 981,795 |
Trade accounts receivable, net of allowances ($25,380 and $32,504 as of June 30, 2023, and March 31, 2023, respectively) | 271,203 | 301,511 |
Inventories | 740,553 | 532,852 |
Prepaid expenses | 40,028 | 33,788 |
Other current assets | 58,173 | 55,523 |
Income tax receivable | 18,313 | 4,784 |
Total current assets | 2,175,159 | 1,910,253 |
Property and equipment, net of accumulated depreciation ($324,572 and $317,508 as of June 30, 2023, and March 31, 2023, respectively) (Note 10) | 288,760 | 266,679 |
Operating lease assets | 219,200 | 213,302 |
Goodwill | 13,990 | 13,990 |
Other intangible assets, net of accumulated amortization ($81,594 and $81,033 as of June 30, 2023, and March 31, 2023, respectively) | 36,904 | 37,457 |
Deferred tax assets, net | 70,585 | 72,592 |
Other assets | 43,304 | 41,930 |
Total assets | 2,847,902 | 2,556,203 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Trade accounts payable | 523,014 | 265,605 |
Accrued payroll | 42,406 | 63,781 |
Operating lease liabilities | 51,234 | 50,765 |
Other accrued expenses | 83,499 | 86,753 |
Income tax payable | 28,013 | 17,322 |
Value added tax payable | 7,638 | 13,154 |
Total current liabilities | 735,804 | 497,380 |
Long-term operating lease liabilities | 209,367 | 195,723 |
Income tax liability | 62,480 | 62,032 |
Other long-term liabilities | 38,130 | 35,335 |
Total long-term liabilities | 309,977 | 293,090 |
Commitments and contingencies (Note 5) | ||
Stockholders' equity | ||
Common stock ($0.01 par value; 125,000 shares authorized; shares issued and outstanding of 26,136 and 26,176 as of June 30, 2023, and March 31, 2023, respectively) | 261 | 262 |
Additional paid-in capital | 239,659 | 232,932 |
Retained earnings | 1,609,535 | 1,571,574 |
Accumulated other comprehensive loss (Note 7) | (47,334) | (39,035) |
Total stockholders' equity | 1,802,121 | 1,765,733 |
Total liabilities and stockholders' equity | $ 2,847,902 | $ 2,556,203 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowances | $ 25,380 | $ 32,504 |
Accumulated depreciation | 324,572 | 317,508 |
Accumulated amortization | $ 81,594 | $ 81,033 |
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) | 26,136,000 | 26,176,000 |
Common stock, outstanding shares (in shares) | 26,136,000 | 26,176,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||
Net sales | $ 675,791 | $ 614,461 |
Cost of sales | 329,367 | 319,709 |
Gross profit | 346,424 | 294,752 |
Selling, general, and administrative expenses | 275,688 | 238,411 |
Income from operations (Note 9) | 70,736 | 56,341 |
Interest income | (11,287) | (1,214) |
Interest expense | 1,005 | 1,052 |
Other income, net | (346) | (499) |
Total other income, net | (10,628) | (661) |
Income before income taxes | 81,364 | 57,002 |
Income tax expense (Note 4) | 17,812 | 12,153 |
Net income | 63,552 | 44,849 |
Other comprehensive loss, net of tax | ||
Unrealized gain on cash flow hedges | 352 | 758 |
Foreign currency translation loss | (8,651) | (15,724) |
Total other comprehensive loss, net of tax | (8,299) | (14,966) |
Comprehensive income | $ 55,253 | $ 29,883 |
Net income per share | ||
Basic (in dollars per share) | $ 2.43 | $ 1.67 |
Diluted (in dollars per share) | $ 2.41 | $ 1.66 |
Weighted-average common shares outstanding (Note 8) | ||
Basic (in shares) | 26,165 | 26,777 |
Diluted (in shares) | 26,321 | 26,948 |
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, 2022 | 26,982,000 | ||||
Beginning balance at Mar. 31, 2022 | $ 1,538,825 | $ 270 | $ 210,825 | $ 1,352,685 | $ (24,955) |
Increase (Decrease) in Stockholders' Equity | |||||
Stock-based compensation (in shares) | 1,000 | ||||
Stock-based compensation | 3,735 | 3,735 | |||
Shares withheld for taxes | $ (43) | (43) | |||
Repurchases of common stock (Note 7) (in shares) | (384,413) | (384,000) | |||
Repurchases of common stock (Note 7) | $ (99,993) | $ (4) | (99,989) | ||
Net income | 44,849 | 44,849 | |||
Total other comprehensive loss | (14,966) | (14,966) | |||
Ending balance (in shares) at Jun. 30, 2022 | 26,599,000 | ||||
Ending balance at Jun. 30, 2022 | 1,472,407 | $ 266 | 214,517 | 1,297,545 | (39,921) |
Beginning balance (in shares) at Mar. 31, 2023 | 26,176,000 | ||||
Beginning balance at Mar. 31, 2023 | 1,765,733 | $ 262 | 232,932 | 1,571,574 | (39,035) |
Increase (Decrease) in Stockholders' Equity | |||||
Stock-based compensation (in shares) | 1,000 | ||||
Stock-based compensation | 6,877 | 6,877 | |||
Shares issued upon vesting (in shares) | 3,000 | ||||
Exercise of stock options (in shares) | 8,000 | ||||
Exercise of stock options | 548 | 548 | |||
Shares withheld for taxes | $ (698) | (698) | |||
Repurchases of common stock (Note 7) (in shares) | (52,410) | (52,000) | |||
Repurchases of common stock (Note 7) | $ (25,469) | $ (1) | (25,468) | ||
Excise taxes related to repurchases of common stock | (123) | (123) | |||
Net income | 63,552 | 63,552 | |||
Total other comprehensive loss | (8,299) | (8,299) | |||
Ending balance (in shares) at Jun. 30, 2023 | 26,136,000 | ||||
Ending balance at Jun. 30, 2023 | $ 1,802,121 | $ 261 | $ 239,659 | $ 1,609,535 | $ (47,334) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
OPERATING ACTIVITIES | ||
Net income | $ 63,552 | $ 44,849 |
Reconciliation of net income to net cash provided by (used in) operating activities: | ||
Depreciation, amortization, and accretion | 12,353 | 11,705 |
Amortization on cloud computing arrangements | 558 | 380 |
Bad debt (benefit) expense | (2,974) | 212 |
Deferred tax expense (benefit) | 478 | (644) |
Stock-based compensation | 6,989 | 3,834 |
Loss on disposal of long-lived assets | 0 | 15 |
Impairment of operating lease and other long-lived assets | 0 | 1,068 |
Changes in operating assets and liabilities: | ||
Trade accounts receivable, net | 33,282 | (19,520) |
Inventories | (207,701) | (332,713) |
Prepaid expenses and other current assets | (8,472) | 7,633 |
Income tax receivable | (13,529) | (349) |
Net operating lease assets and lease liabilities | 7,657 | (4,900) |
Other assets | (1,933) | 1,846 |
Trade accounts payable | 254,063 | 279,790 |
Other accrued expenses | (33,247) | (30,580) |
Income tax payable | 10,691 | 6,439 |
Other long-term liabilities | 3,495 | 2,014 |
Net cash provided by (used in) operating activities | 125,262 | (28,921) |
INVESTING ACTIVITIES | ||
Purchases of property and equipment | (30,732) | (12,467) |
Net cash used in investing activities | (30,732) | (12,467) |
FINANCING ACTIVITIES | ||
Proceeds from exercise of stock options | 548 | 0 |
Repurchases of common stock | (25,469) | (99,993) |
Cash paid for shares withheld for taxes | (698) | (43) |
Net cash used in financing activities | (25,619) | (100,036) |
Effect of foreign currency exchange rates on cash and cash equivalents | (3,817) | (6,873) |
Net change in cash and cash equivalents | 65,094 | (148,297) |
Cash and cash equivalents at beginning of period | 981,795 | 843,527 |
Cash and cash equivalents at end of period | 1,046,889 | 695,230 |
Cash paid during the period | ||
Income taxes, net of refunds of $4 and $250, as of June 30, 2023, and 2022, respectively | 19,712 | 13,313 |
Interest | 473 | 525 |
Operating leases | 14,974 | 17,589 |
Non-cash investing activities | ||
Changes in accounts payable and accrued expenses for purchases of property and equipment | (5,024) | (3,658) |
Accrued for asset retirement obligation assets related to leasehold improvements | 242 | 561 |
Leasehold improvements acquired through tenant allowances | 8,127 | 0 |
Non-cash financing activities | ||
Accrued excise taxes related to repurchase of common stock | $ 123 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Cash Flows [Abstract] | ||
Income tax refunds | $ 4 | $ 250 |
General
General | 3 Months Ended |
Jun. 30, 2023 | |
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 lifestyles use and high-performance activities. The Company's proprietary brands include the UGG, HOKA, Teva, Sanuk, and Koolaburra 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 of the Company's products. A significant part of the UGG brand's business has historically been seasonal, requiring the Company to build inventory levels during certain quarters in its fiscal year to support higher selling seasons, which has contributed to the variation in its results from quarter to quarter. However, as the Company continues to take steps to diversify and expand its product offerings by creating more year-round styles, and as net sales of the HOKA brand continue to increase as a percentage of the Company's aggregate net sales, the Company expects the impact from seasonality to continue to decrease over time. Basis of Presentation. The unaudited condensed consolidated financial statements and accompanying notes thereto (referred to herein as condensed consolidated financial statements) as of June 30, 2023, and for the three months ended June 30, 2023 (the current period), and 2022 (the prior period) are prepared in accordance with generally accepted accounting principles in the US (US GAAP) for interim financial information pursuant to Rule 10-01 of Regulation S-X issued by the SEC. Accordingly, the condensed consolidated financial statements 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, 2023, is 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 actual results to be achieved for full fiscal years or other interim periods. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2023 (prior fiscal year), which was filed with the SEC on May 26, 2023 (2023 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. 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 pronouncements and other factors that management believes to be reasonable. In addition, the Company has considered the potential impact of macroeconomic factors, including inflation, foreign currency exchange rate volatility, changes in interest rates, changes in commodity pricing, changes in discretionary spending and recessionary concerns, on its business and operations. Although the full impact of these factors is unknown and cannot be reasonably estimated, the Company believes it has made appropriate accounting estimates and assumptions based on the facts and circumstances available as of the reporting date. However, actual results could differ materially from these estimates and assumptions, which may result in material effects on the Company's financial condition, results of operations, and liquidity. To the extent there are differences between these estimates and actual results, the Company's condensed consolidated financial statements may be materially affected. Significant areas requiring the use of management estimates and assumptions relate to inventory write-downs; trade accounts receivable allowances, including variable consideration for net sales provided to customers, such as the sales return asset and liability; contract assets and liabilities; stock-based compensation; impairment assessments, including goodwill, other intangible assets, and long-lived 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 measure its operating lease assets and lease liabilities. Foreign Currency Translation. The Company considers the US dollar as its functional currency. The Company’s wholly owned foreign subsidiaries have various assets and liabilities, primarily cash, receivables, and payables, which are denominated in currencies other than its functional currency. The Company remeasures these monetary assets and liabilities using the exchange rate at the end of the reporting period, which results in gains and losses that are recorded in selling, general, and administrative (SG&A) expenses in the condensed consolidated statements of comprehensive income as incurred. In addition, the Company translates assets and liabilities of subsidiaries with reporting currencies other than US dollars into US dollars using the exchange rates at the end of the reporting period, which results in financial statement translation gains and losses recorded in other comprehensive income or loss (OCI) in the condensed consolidated statements of comprehensive income. Reportable Operating Segments. The Company's six reportable operating segments include the worldwide wholesale operations of the UGG brand, HOKA brand, Teva brand, Sanuk brand, and Other brands (primarily consisting of the Koolaburra brand), as well as DTC (collectively, the Company's reportable operating segments). Refer to Note 9, "Reportable Operating Segments," for further information on the Company's reportable operating segments. Recent Accounting Pronouncements. The Financial Accounting Standards Board has issued and Accounting Standards Update (ASU) that has recently been adopted by the Company and the following is a summary of its impact on the Company: Standard Description Impact Upon Adoption ASU 2022-04 - Supplier Finance Program (SFP) The ASU requires that a buyer in a SFP disclose qualitative and quantitative information about its program on an interim basis, including the nature of the SFP and key terms, outstanding amounts as of the end the reporting period, and presentation in its financial statements. The interim portion of this ASU is effective on a retrospective basis for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted. The annual requirement that requires a buyer in a SFP disclose an activity roll forward of outstanding balances as of the end of the reporting period has not yet to been adopted. This annual portion of this ASU is effective on a retrospective basis for fiscal years beginning after December 15, 2023. Early adoption is not permitted. The Company retrospectively adopted this ASU beginning on April 1, 2023, except for the roll forward requirements. Refer to Note 11, "Supplier Finance Program," for further information on the Company's SFP key terms and outstanding balances recorded in the condensed consolidated balance sheets. Management is currently evaluating the impact of the annual portion of this ASU on its condensed consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Jun. 30, 2023 | |
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 they have the ability to direct the use of and obtain substantially all the remaining benefits from the goods transferred. The amount of revenue recognized is based on the transaction price, which represents the invoiced amount less known actual amounts or estimates of variable consideration. Variable Consideration. Components of variable consideration include estimated allowance for sales discounts, allowance for chargebacks, and sales return asset and liability. Estimates for variable consideration are based on the amounts earned or estimates to be claimed as an adjustment to sales. Estimated variable consideration is included in the transaction price to the extent 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 to 60 days. Sales Return Asset and Liability. Reserves are recorded for anticipated future returns of goods shipped prior to the end of the reporting period. In general, the Company accepts returns for damaged or defective products for up to one year. The Company also has a policy whereby returns are generally accepted from customers and end consumers between 30 to 90 days from the point of sale for cash or credit. Sales returns are a refund asset for the right to recover the inventory and a refund liability for the stand-ready right of return. Changes to the refund asset for the right to recover the inventory are recorded against cost of sales and changes in the refund liability are recorded against gross sales in the condensed consolidated statements of comprehensive income. The refund asset for the right to recover the inventory is recorded in other current assets and the related refund liability is recorded in other accrued expenses in the condensed consolidated balance sheets. The amounts of these reserves are determined based on several factors, including known and actual returns, historical returns, and any recent events that could result in a change from historical return rates. Activity during the three months ended June 30, 2023, related to estimated sales returns were as follows: Recovery Asset Refund Liability Balance, March 31, 2023 $ 15,685 $ (45,322) Net additions to sales return liability* 8,387 (40,609) Actual returns (12,867) 49,373 Balance, June 30, 2023 $ 11,205 $ (36,558) Activity during the three months ended June 30, 2022, related to estimated sales returns were as follows: Recovery Asset Refund Liability Balance, March 31, 2022 $ 11,491 $ (39,867) Net additions to sales return liability* 13,844 (40,498) Actual returns (12,680) 41,017 Balance, June 30, 2022 $ 12,655 $ (39,348) * Net additions to the sales return liability include a provision for anticipated sales returns, which consists of both contractual return rights and discretionary authorized returns. Contract Liabilities. 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 liabilities are recorded in other accrued expenses in the condensed consolidated balance sheets and include loyalty programs and other deferred revenue. Loyalty Programs . The Company has a loyalty program for the UGG brand in its DTC channel where consumers can earn rewards from qualifying purchases or activities. The Company defers recognition of revenue for unredeemed awards until one of the following occurs: (1) rewards are redeemed by the consumer, (2) points or certificates expire, or (3) an estimate of the expected unused portion of points or certificates is applied, which is based on historical redemption and expiration patterns. The Company’s contract liability for loyalty programs is recorded in other accrued expenses in the condensed consolidated balance sheets. Activity during the three months ended June 30, 2023, related to loyalty programs were as follows: Amounts Balance, March 31, 2023 $ (13,144) Redemptions and expirations for loyalty certificates and points recognized in net sales 4,728 Deferred revenue for loyalty points and certificates issued (3,909) Balance, June 30, 2023 $ (12,325) Activity during the three months ended June 30, 2022, related to loyalty programs were as follows: Amounts Balance, March 31, 2022 $ (10,883) Redemptions and expirations for loyalty certificates and points recognized in net sales 4,649 Deferred revenue for loyalty points and certificates issued (3,760) Balance, June 30, 2022 $ (9,994) Deferred Revenue . Revenue is deferred for wholesale channel transactions when certain conditions outlined within the contract terms, including the transfer of control or delivery of product, has not occurred, such as when a wholesale channel customer prepays for ordered product. The contract liability for deferred revenue is recorded in other accrued expenses in the condensed consolidated balance sheets. Activity during the three months ended June 30, 2023, related to deferred revenue were as follows: Amounts Balance, March 31, 2023 $ (13,448) Additions of customer cash payments (20,589) Revenue recognized 13,401 Balance, June 30, 2023 $ (20,636) Activity during the three months ended June 30, 2022, related to deferred revenue were as follows: Amounts Balance, March 31, 2022 $ (15,804) Additions of customer cash payments (20,510) Revenue recognized 12,429 Balance, June 30, 2022 $ (23,885) Refer to Note 9, "Reportable Operating Segments," for further information on the Company's disaggregation of revenue by reportable operating segment. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jun. 30, 2023 | |
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, net, trade accounts payable, accrued payroll, and other accrued expenses, approximates fair value due to their short-term nature. When the Company makes short-term borrowings, the carrying amounts, which are considered Level 2 liabilities, approximate fair value based upon current rates and terms available to the Company for similar debt. The Company does not currently have any Level 3 assets or liabilities. Assets and liabilities that are measured on a recurring basis at fair value in the condensed consolidated balance sheets are as follows: As of Measured Using June 30, 2023 Level 1 Level 2 Level 3 Money-market funds $ 795,364 $ 795,364 $ — $ — Non-qualified deferred compensation asset 9,382 9,382 — — Non-qualified deferred compensation liability (13,850) (13,850) — — Designated Derivative Contracts asset 418 — 418 — Designated Derivative Contracts liability (90) — (90) — As of Measured Using March 31, 2023 Level 1 Level 2 Level 3 Money-market funds $ 675,468 $ 675,468 $ — $ — Non-qualified deferred compensation asset 8,399 8,399 — — Non-qualified deferred compensation liability (11,326) (11,326) — — The carrying value of money-market funds approximates the fair value as it is considered a highly liquid investment with an original maturity of three months or less when purchased. Money-market funds are recorded in cash and cash equivalents in the condensed consolidated balance sheets. The Company sponsors an unfunded, non-qualified deferred compensation plan (NQDC Plan) that permits certain members of its management team the opportunity to defer compensation into the NQDC Plan. A rabbi trust was established as a reserve for benefits payable under the NQDC Plan, with the assets invested in Company-owned life insurance policies. Deferred compensation is recognized based on the fair value of the participants' accounts. As of June 30, 2023, the non-qualified deferred compensation asset of $9,382 is recorded in other assets in the condensed consolidated balance sheets, and the non-qualified deferred compensation liability of $13,850 is recorded in the condensed consolidated balance sheets, with $702 recorded in other accrued expenses and $13,148 recorded in other long-term liabilities. As of March 31, 2023, the non-qualified deferred compensation asset of $8,399 is recorded in other assets in the condensed consolidated balance sheets, and the non-qualified deferred compensation liability of $11,326 is recorded in the condensed consolidated balance sheets, with $737 recorded in other accrued expenses and $10,589 recorded in other long-term liabilities. The fair value of foreign currency forward or option contracts is determined using quoted forward spot rates at the end of the applicable reporting period from counterparties, which are corroborated by market-based pricing (Level 2). 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 6, "Derivative Instruments," for further information, including definitions of the terms Designated Derivative Contracts and Non-Designated Derivative Contracts. The Company's non-financial assets, such as other long-lived assets and definite-lived intangible assets, which include operating lease assets, machinery and equipment, leasehold improvements definite-lived trademarks, as well as indefinite-lived intangible assets and goodwill, are not required to be carried at fair value on a recurring basis and are reported at carrying value. Instead, these assets are tested for impairment annually, or when an event occurs or changes in circumstances indicate the carrying value may not be recoverable. When determining fair value, Level 3 measurements are used for the estimates and assumptions, including undiscounted future cash flows expected to be generated by the asset groups based upon historical experience, expected market conditions, and management's plans. |
Income Taxes
Income Taxes | 3 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense and the effective income tax rate were as follows: Three Months Ended June 30, 2023 2022 Income tax expense $ 17,812 $ 12,153 Effective income tax rate 21.9 % 21.3 % The tax provisions during the three months ended June 30, 2023, and 2022 were computed using the estimated effective income tax rate applicable to each of the domestic and foreign taxable jurisdictions for the fiscal years ending March 31, 2024 (current fiscal year), and March 31, 2023, respectively, and were adjusted for discrete items that occurred within the periods presented above. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies There were no material changes outside the ordinary course of business during the three months ended June 30, 2023, to the contractual obligations and other commitments disclosed in the 2023 Annual Report. Refer to Note 7, "Commitments and Contingencies," in the Company's consolidated financial statements in Part IV of the 2023 Annual Report for further information on the Company's contractual obligations and 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 between one Supplemental information for amounts presented in the condensed consolidated statements of cash flows related to operating leases, were as follows: Three Months Ended June 30, 2023 2022 Non-cash operating activities Operating lease assets obtained in exchange for lease liabilities* $ 21,587 $ 6,207 Reductions to operating lease assets for reductions to lease liabilities* (65) (276) *Amounts disclosed include non-cash additions or reductions resulting from lease remeasurements. Litigation. From time to time, the Company is involved in various legal proceedings, disputes, and other claims arising in the ordinary course of business, including employment, intellectual property, and product liability claims. Although the results of these matters cannot be predicted with certainty, the Company believes it is not currently a party to any legal proceedings, disputes, or other claims for which a material loss is considered probable and for which the amount (or range) of loss is reasonably estimable. However, regardless of the merit of the claims raised or the outcome, these ordinary course matters can have an adverse impact on the Company as a result of legal costs, diversion of management time and resources, and other factors. |
Commitments and Contingencies | Commitments and Contingencies There were no material changes outside the ordinary course of business during the three months ended June 30, 2023, to the contractual obligations and other commitments disclosed in the 2023 Annual Report. Refer to Note 7, "Commitments and Contingencies," in the Company's consolidated financial statements in Part IV of the 2023 Annual Report for further information on the Company's contractual obligations and 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 between one Supplemental information for amounts presented in the condensed consolidated statements of cash flows related to operating leases, were as follows: Three Months Ended June 30, 2023 2022 Non-cash operating activities Operating lease assets obtained in exchange for lease liabilities* $ 21,587 $ 6,207 Reductions to operating lease assets for reductions to lease liabilities* (65) (276) *Amounts disclosed include non-cash additions or reductions resulting from lease remeasurements. Litigation. From time to time, the Company is involved in various legal proceedings, disputes, and other claims arising in the ordinary course of business, including employment, intellectual property, and product liability claims. Although the results of these matters cannot be predicted with certainty, the Company believes it is not currently a party to any legal proceedings, disputes, or other claims for which a material loss is considered probable and for which the amount (or range) of loss is reasonably estimable. However, regardless of the merit of the claims raised or the outcome, these ordinary course matters can have an adverse impact on the Company as a result of legal costs, diversion of management time and resources, and other factors. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments The Company enters into foreign currency forward or option contracts (derivative contracts), with maturities of 15 months or less, to manage foreign currency risk and certain of these derivative contracts are designated as cash flow hedges of forecasted sales (Designated Derivative Contracts). The Company also enters into derivative contracts that are not designated as cash flow hedges (Non-Designated Derivative Contracts), to offset a portion of the anticipated gains and losses on certain intercompany balances until the expected time of repayment. The Company does not use derivative contracts for trading purposes. The after-tax unrealized gains or losses from changes in fair value of Designated Derivative Contracts is recorded as a component of accumulated other comprehensive loss (AOCL) and are reclassified to net sales in the condensed consolidated statements of comprehensive income in the same period or periods as the related sales are recognized. When it is probable that a forecasted transaction will not occur, the Company discontinues hedge accounting and the accumulated gains or losses in AOCL related to the hedging relationship are immediately recorded in OCI in the condensed consolidated statements of comprehensive income. The Company includes all hedge components in its assessment of effectiveness for its derivative contracts. Changes in the fair value of Non-Designated Derivative Contracts are recorded in SG&A expenses in the condensed consolidated statements of comprehensive income. The changes in fair value for these contracts are offset by the remeasurement gains or losses associated with the underlying foreign currency-denominated intercompany balances, which are recorded in SG&A expenses in the condensed consolidated statements of comprehensive income. As of June 30, 2023, the Company has the following derivative contracts recorded at fair value in the condensed consolidated balance sheets: Designated Non-Designated Derivative Contracts Total Notional value $ 114,312 $ — $ 114,312 Fair value recorded in other current assets 418 — 418 Fair value recorded in other accrued expenses (90) — (90) As of June 30, 2023, three counterparties hold the Company's outstanding derivative contracts, all of which are expected to mature in the next nine months. As of March 31, 2023, the Company had no outstanding derivative contracts. The following table summarizes the effect of Designated Derivative Contracts and the related income tax effects of unrealized gains or losses recorded in the condensed consolidated statements of comprehensive income for changes in AOCL: Three Months Ended June 30, 2023 2022 Gain recorded in Other comprehensive income $ 411 $ 1,000 Reclassifications from Accumulated other comprehensive gain into net sales 21 — Income tax expense in Other comprehensive income (80) (242) Total $ 352 $ 758 The following table summarizes the effect of Non-Designated Derivative Contracts recorded in the condensed consolidated statements of comprehensive income: Three Months Ended June 30, 2023 2022 Gain recorded in SG&A expenses $ — $ 80 The non-performance risk of the Company and its counterparties did not have a material impact on the fair value of its derivative contracts. As of June 30, 2023, the amount of unrealized gains on derivative contracts recorded in AOCL is expected to be reclassified into net sales within the next nine months. Refer to Note 7, "Stockholders' Equity," for further information on the components of AOCL. Subsequent to June 30, 2023, through July 13, 2023, the Company entered into Designated Derivative Contracts measured at fair value with notional values totaling $44,302, which are collectively expected to mature within the next nine months. As of July 13, 2023, the Company’s outstanding hedging contracts are held by an aggregate of three counterparties. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders' Equity Stock Repurchase Program. The Company's Board of Directors has approved various authorizations under the Company's stock repurchase program to repurchase shares of its common stock (collectively, the stock repurchase program). As of June 30, 2023, the aggregate remaining approved amount under the stock repurchase program is $1,331,166. The stock repurchase program does not obligate the Company to acquire any amount of common stock and may be suspended at any time at the Company's discretion. Stock repurchase activity under the Company's stock repurchase program, was as follows: Three Months Ended June 30, 2023 2022 Dollar value of shares repurchased (1) (2) $ 25,469 $ 99,993 Total number of shares repurchased (3) 52,410 384,413 Weighted average price paid per share $ 485.95 $ 260.12 (1) The dollar value of shares repurchased excludes the cost of broker commissions, excise taxes, and other costs associated with the program. (2) May not calculate on rounded dollars. (3) All share repurchases were made pursuant to the Company's publicly announced stock repurchase program in open-market transactions. Accumulated Other Comprehensive Loss. The components within AOCL, net of tax, recorded in the condensed consolidated balance sheets are as follows: June 30, 2023 March 31, 2023 Unrealized gain on cash flow hedges $ 352 $ — Cumulative foreign currency translation loss (47,686) (39,035) Total $ (47,334) $ (39,035) |
Basic and Diluted Shares
Basic and Diluted Shares | 3 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023 2022 Basic 26,165,000 26,777,000 Dilutive effect of equity awards 156,000 171,000 Diluted 26,321,000 26,948,000 Excluded Time-Based Restricted Stock Units (RSUs) and Performance-Based Restricted Stock Units (PSUs) — 18,000 Long-Term Incentive Plan PSUs (LTIP PSUs) 76,000 50,000 Deferred Non-Employee Director Equity Awards — 2,000 Employee Stock Purchase Plan 1,000 — |
Reportable Operating Segments
Reportable Operating Segments | 3 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Reportable Operating Segments | Reportable Operating Segments Information reported to the Chief Operating Decision Maker (CODM), who is the Company's Chief Executive Officer (CEO), President, and Principal Executive Officer (PEO), is organized into the Company's six reportable operating segments and is consistent with how the CODM evaluates 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. Segment Net Sales and Income from Operations. The Company evaluates reportable operating segment performance primarily based on net sales and income (loss) from operations. The wholesale operations of each brand are 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 the Company's warehouses and DCs, certain executive and stock-based compensation, accounting, finance, legal, information technology (IT), human resources, and facilities, among others. 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 as these transactions are eliminated in consolidation. Reportable operating segment information, with a reconciliation to the condensed consolidated statements of comprehensive income, was as follows: Three Months Ended June 30, 2023 2022 Net sales UGG brand wholesale $ 121,545 $ 137,862 HOKA brand wholesale 260,847 231,885 Teva brand wholesale 35,132 46,895 Sanuk brand wholesale 6,470 10,726 Other brands wholesale 1,427 1,993 Direct-to-Consumer 250,370 185,100 Total $ 675,791 $ 614,461 Income (loss) from operations UGG brand wholesale $ 16,866 $ 30,665 HOKA brand wholesale 86,524 69,616 Teva brand wholesale 9,237 12,493 Sanuk brand wholesale 759 2,466 Other brands wholesale (2,041) (469) Direct-to-Consumer 75,462 41,220 Unallocated overhead costs (116,071) (99,650) Total $ 70,736 $ 56,341 Segment Assets. Assets allocated to each reportable operating segment include trade accounts receivable, net, inventories, 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, are as follows: June 30, 2023 March 31, 2023 Assets UGG brand wholesale $ 459,001 $ 261,683 HOKA brand wholesale 449,694 446,450 Teva brand wholesale 68,660 94,735 Sanuk brand wholesale 35,329 41,405 Other brands wholesale 31,947 24,448 Direct-to-Consumer 229,166 219,194 Total assets from reportable operating segments 1,273,797 1,087,915 Unallocated cash and cash equivalents 1,046,889 981,795 Unallocated deferred tax assets, net 70,585 72,592 Unallocated other corporate assets 456,631 413,901 Total $ 2,847,902 $ 2,556,203 |
Concentration of Business
Concentration of Business | 3 Months Ended |
Jun. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Concentration of Business | Concentration of Business Regions and Customers. The Company sells its products globally to customers and end consumers in various countries, with net sales concentrations as follows: Three Months Ended June 30, 2023 2022 International net sales $ 256,256 $ 229,946 % of net sales 37.9 % 37.4 % Net sales in foreign currencies $ 148,971 $ 108,941 % of net sales 22.0 % 17.7 % Ten largest global customers as % of net sales 22.8 % 29.5 % For the three months ended June 30, 2023, and 2022, no single foreign country comprised 10.0% or more of the Company's total net sales. For the three months ended June 30, 2023, and 2022, no single global customer accounted for 10.0% or more of the Company's net sales. As of June 30, 2023, the Company has one customer that represents 11.1% of trade accounts receivable, net, compared to no customers that represents 10.0% of trade accounts receivable, net, as of March 31, 2023. 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. Cash and Cash Equivalents. The Company maintains a portion of its cash in Federal Deposit Insurance Corporation (FDIC) insured bank deposit accounts which, at times, may exceed federally insured limits. To date, the Company has not experienced any losses in such accounts. The Company does not believe, based on the size and strength of the banking institutions used, it is exposed to any significant credit risks in cash. 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 (UK). Long-Lived Assets. Long-lived assets, which consist of property and equipment, net, recorded in the condensed consolidated balance sheets, are as follows: June 30, 2023 March 31, 2023 United States $ 265,331 $ 244,529 Foreign* 23,429 22,150 Total $ 288,760 $ 266,679 *No single foreign country’s property and equipment, net, represents 10.0% or more of the Company’s total property and equipment, net, as of June 30, 2023, and March 31, 2023. |
Supplier Finance Program
Supplier Finance Program | 3 Months Ended |
Jun. 30, 2023 | |
Payables and Accruals [Abstract] | |
Supplier Finance Program | Supplier Finance Program The Company has a voluntary SFP administered through a third-party platform that provides the Company's independent manufacturers and suppliers of inventory (inventory suppliers) the opportunity to sell their receivables due from the Company to participating financial institutions in advance of the invoice due date, at the sole discretion of both inventory suppliers and the financial institutions. The Company is not party to the agreements between these third parties and has no economic interest in an inventory suppliers' decision to sell a receivable. The Company's payment obligations, including the amounts due and payment terms, which generally do not exceed 90 days, are not impacted by the inventory suppliers' election to participate in the SFP, and the Company provides no guarantees to any third parties under the SFP. Accordingly, amounts due to inventory suppliers that elected to participate in the SFP are presented in trade accounts payable in the condensed consolidated balance sheets. As of June 30, 2023, and March 31, 2023, the Company had $29,093 and $7,740, respectively, of balances outstanding related to the SFP recorded in trade accounts payable in the condensed consolidated balance sheets. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||
Net income | $ 63,552 | $ 44,849 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 shares | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | Certain of our directors and officers have entered into a trading plan with a financial institution to either purchase or sell shares of our common stock, which plans are intended to comply with the provisions of Rule 10b5-1 under the Exchange Act. Set forth below is a summary of the adoption, modification, or termination activity during the three months ended June 30, 2023: Name & Title Adoption Date Termination Date Contract End Date Aggregate Shares Covered Thomas Garcia, Chief Administrative Officer June 8, 2023 * June 14, 2024 14,383 Steven J. Fasching, Chief Financial Officer March 6, 2023 June 6, 2023 (1) January 31, 2024 3,000 *Not applicable. |
Rule 10b5-1 Arrangement Adopted | true |
Non-Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Thomas Garcia [Member] | |
Trading Arrangements, by Individual | |
Name | Thomas Garcia |
Title | Chief Administrative Officer |
Adoption Date | June 8, 2023 |
Rule 10b5-1 Arrangement Terminated | false |
Arrangement Duration | 372 days |
Aggregate Available | 14,383 |
Steven J. Fasching [Member] | |
Trading Arrangements, by Individual | |
Name | Steven J. Fasching |
Title | Chief Financial Officer |
Adoption Date | March 6, 2023 |
Rule 10b5-1 Arrangement Terminated | true |
Termination Date | June 6, 2023 |
Aggregate Available | 3,000 |
General (Policies)
General (Policies) | 3 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023, and for the three months ended June 30, 2023 (the current period), and 2022 (the prior period) are prepared in accordance with generally accepted accounting principles in the US (US GAAP) for interim financial information pursuant to Rule 10-01 of Regulation S-X issued by the SEC. Accordingly, the condensed consolidated financial statements 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, 2023, is 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 actual results to be achieved for full fiscal years or other interim periods. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2023 (prior fiscal year), which was filed with the SEC on May 26, 2023 (2023 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. |
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 pronouncements and other factors that management believes to be reasonable. In addition, the Company has considered the potential impact of macroeconomic factors, including inflation, foreign currency exchange rate volatility, changes in interest rates, changes in commodity pricing, changes in discretionary spending and recessionary concerns, on its business and operations. Although the full impact of these factors is unknown and cannot be reasonably estimated, the Company believes it has made appropriate accounting estimates and assumptions based on the facts and circumstances available as of the reporting date. However, actual results could differ materially from these estimates and assumptions, which may result in material effects on the Company's financial condition, results of operations, and liquidity. To the extent there are differences between these estimates and actual results, the Company's condensed consolidated financial statements may be materially affected. |
Foreign Currency Translation | Foreign Currency Translation. The Company considers the US dollar as its functional currency. The Company’s wholly owned foreign subsidiaries have various assets and liabilities, primarily cash, receivables, and payables, which are denominated in currencies other than its functional currency. The Company remeasures these monetary assets and liabilities using the exchange rate at the end of the reporting period, which results in gains and losses that are recorded in selling, general, and administrative (SG&A) expenses in the condensed consolidated statements of comprehensive income as incurred. In addition, the Company translates assets and liabilities of subsidiaries with reporting currencies other than US dollars into US dollars using the exchange rates at the end of the reporting period, which results in financial statement translation gains and losses recorded in other comprehensive income or loss (OCI) in the condensed consolidated statements of comprehensive income. |
Reportable Operating Segments | Reportable Operating Segments. The Company's six reportable operating segments include the worldwide wholesale operations of the UGG brand, HOKA brand, Teva brand, Sanuk brand, and Other brands (primarily consisting of the Koolaburra brand), as well as DTC (collectively, the Company's reportable operating segments). Information reported to the Chief Operating Decision Maker (CODM), who is the Company's Chief Executive Officer (CEO), President, and Principal Executive Officer (PEO), is organized into the Company's six reportable operating segments and is consistent with how the CODM evaluates 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. Segment Net Sales and Income from Operations. The Company evaluates reportable operating segment performance primarily based on net sales and income (loss) from operations. The wholesale operations of each brand are 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements. The Financial Accounting Standards Board has issued and Accounting Standards Update (ASU) that has recently been adopted by the Company and the following is a summary of its impact on the Company: Standard Description Impact Upon Adoption ASU 2022-04 - Supplier Finance Program (SFP) The ASU requires that a buyer in a SFP disclose qualitative and quantitative information about its program on an interim basis, including the nature of the SFP and key terms, outstanding amounts as of the end the reporting period, and presentation in its financial statements. The interim portion of this ASU is effective on a retrospective basis for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted. The annual requirement that requires a buyer in a SFP disclose an activity roll forward of outstanding balances as of the end of the reporting period has not yet to been adopted. This annual portion of this ASU is effective on a retrospective basis for fiscal years beginning after December 15, 2023. Early adoption is not permitted. The Company retrospectively adopted this ASU beginning on April 1, 2023, except for the roll forward requirements. Refer to Note 11, "Supplier Finance Program," for further information on the Company's SFP key terms and outstanding balances recorded in the condensed consolidated balance sheets. Management is currently evaluating the impact of the annual portion of this ASU 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 they have the ability to direct the use of and obtain substantially all the remaining benefits from the goods transferred. The amount of revenue recognized is based on the transaction price, which represents the invoiced amount less known actual amounts or estimates of variable consideration. Variable Consideration. Components of variable consideration include estimated allowance for sales discounts, allowance for chargebacks, and sales return asset and liability. Estimates for variable consideration are based on the amounts earned or estimates to be claimed as an adjustment to sales. Estimated variable consideration is included in the transaction price to the extent 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 to 60 days. Sales Return Asset and Liability. Reserves are recorded for anticipated future returns of goods shipped prior to the end of the reporting period. In general, the Company accepts returns for damaged or defective products for up to one year. The Company also has a policy whereby returns are generally accepted from customers and end consumers between 30 to 90 days from the point of sale for cash or credit. Sales returns are a refund asset for the right to recover the inventory and a refund liability for the stand-ready right of return. Changes to the refund asset for the right to recover the inventory are recorded against cost of sales and changes in the refund liability are recorded against gross sales in the condensed consolidated statements of comprehensive income. The refund asset for the right to recover the inventory is recorded in other current assets and the related refund liability is recorded in other accrued expenses in the condensed consolidated balance sheets. The amounts of these reserves are determined based on several factors, including known and actual returns, historical returns, and any recent events that could result in a change from historical return rates. Contract Liabilities. 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 liabilities are recorded in other accrued expenses in the condensed consolidated balance sheets and include loyalty programs and other deferred revenue. Loyalty Programs . The Company has a loyalty program for the UGG brand in its DTC channel where consumers can earn rewards from qualifying purchases or activities. The Company defers recognition of revenue for unredeemed awards until one of the following occurs: (1) rewards are redeemed by the consumer, (2) points or certificates expire, or (3) an estimate of the expected unused portion of points or certificates is applied, which is based on historical redemption and expiration patterns. The Company’s contract liability for loyalty programs is recorded in other accrued expenses in the condensed consolidated balance sheets. |
Fair Value Measurement | 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 fair value of foreign currency forward or option contracts is determined using quoted forward spot rates at the end of the applicable reporting period from counterparties, which are corroborated by market-based pricing (Level 2). 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 6, "Derivative Instruments," for further information, including definitions of the terms Designated Derivative Contracts and Non-Designated Derivative Contracts. The Company's non-financial assets, such as other long-lived assets and definite-lived intangible assets, which include operating lease assets, machinery and equipment, leasehold improvements definite-lived trademarks, as well as indefinite-lived intangible assets and goodwill, are not required to be carried at fair value on a recurring basis and are reported at carrying value. Instead, these assets are tested for impairment annually, or when an event occurs or changes in circumstances indicate the carrying value may not be recoverable. When determining fair value, Level 3 measurements are used for the estimates and assumptions, including undiscounted future cash flows expected to be generated by the asset groups based upon historical experience, expected market conditions, and management's plans. |
Deferred Compensation | The Company sponsors an unfunded, non-qualified deferred compensation plan (NQDC Plan) that permits certain members of its management team the opportunity to defer compensation into the NQDC Plan. A rabbi trust was established as a reserve for benefits payable under the NQDC Plan, with the assets invested in Company-owned life insurance policies. Deferred compensation is recognized based on the fair value of the participants' accounts. |
Derivatives | The Company enters into foreign currency forward or option contracts (derivative contracts), with maturities of 15 months or less, to manage foreign currency risk and certain of these derivative contracts are designated as cash flow hedges of forecasted sales (Designated Derivative Contracts). The Company also enters into derivative contracts that are not designated as cash flow hedges (Non-Designated Derivative Contracts), to offset a portion of the anticipated gains and losses on certain intercompany balances until the expected time of repayment. The Company does not use derivative contracts for trading purposes. The after-tax unrealized gains or losses from changes in fair value of Designated Derivative Contracts is recorded as a component of accumulated other comprehensive loss (AOCL) and are reclassified to net sales in the condensed consolidated statements of comprehensive income in the same period or periods as the related sales are recognized. When it is probable that a forecasted transaction will not occur, the Company discontinues hedge accounting and the accumulated gains or losses in AOCL related to the hedging relationship are immediately recorded in OCI in the condensed consolidated statements of comprehensive income. The Company includes all hedge components in its assessment of effectiveness for its derivative contracts. Changes in the fair value of Non-Designated Derivative Contracts are recorded in SG&A expenses in the condensed consolidated statements of comprehensive income. The changes in fair value for these contracts are offset by the remeasurement gains or losses associated with the underlying foreign currency-denominated intercompany balances, which are recorded in SG&A expenses in the condensed consolidated statements of comprehensive income. |
Net Income Per Share | Excluded Awards. The equity awards excluded from the calculation of the dilutive effect have been excluded due to one of the following: (1) the shares were antidilutive; (2) the necessary conditions had not been satisfied for the shares to be deemed issuable based on the Company's performance for the relevant performance period; or (3) the Company recorded a net loss during the period presented (such that inclusion of these equity awards in the calculation would have been antidilutive). 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 subject to the achievement of 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, and may be materially lower than the number of shares presented, which could result in a lower dilutive effect, respectively. |
Cash and Cash Equivalents | Cash and Cash Equivalents. The Company maintains a portion of its cash in Federal Deposit Insurance Corporation (FDIC) insured bank deposit accounts which, at times, may exceed federally insured limits. To date, the Company has not experienced any losses in such accounts. The Company does not believe, based on the size and strength of the banking institutions used, it is exposed to any significant credit risks in cash. |
Supplier Finance Program | The Company has a voluntary SFP administered through a third-party platform that provides the Company's independent manufacturers and suppliers of inventory (inventory suppliers) the opportunity to sell their receivables due from the Company to participating financial institutions in advance of the invoice due date, at the sole discretion of both inventory suppliers and the financial institutions. The Company is not party to the agreements between these third parties and has no economic interest in an inventory suppliers' decision to sell a receivable. The Company's payment obligations, including the amounts due and payment terms, which generally do not exceed 90 days, are not impacted by the inventory suppliers' election to participate in the SFP, and the Company provides no guarantees to any third parties under the SFP. Accordingly, amounts due to inventory suppliers that elected to participate in the SFP are presented in trade accounts payable in the condensed consolidated balance sheets. |
General (Tables)
General (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accounting Pronouncements Not Yet Adopted | on the Company: Standard Description Impact Upon Adoption ASU 2022-04 - Supplier Finance Program (SFP) The ASU requires that a buyer in a SFP disclose qualitative and quantitative information about its program on an interim basis, including the nature of the SFP and key terms, outstanding amounts as of the end the reporting period, and presentation in its financial statements. The interim portion of this ASU is effective on a retrospective basis for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted. The annual requirement that requires a buyer in a SFP disclose an activity roll forward of outstanding balances as of the end of the reporting period has not yet to been adopted. This annual portion of this ASU is effective on a retrospective basis for fiscal years beginning after December 15, 2023. Early adoption is not permitted. The Company retrospectively adopted this ASU beginning on April 1, 2023, except for the roll forward requirements. Refer to Note 11, "Supplier Finance Program," for further information on the Company's SFP key terms and outstanding balances recorded in the condensed consolidated balance sheets. Management is currently evaluating the impact of the annual portion of this ASU on its condensed consolidated financial statements. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Activity Related to Estimated Sales Returns, Loyalty Program Activity and Deferred Revenue | Activity during the three months ended June 30, 2023, related to estimated sales returns were as follows: Recovery Asset Refund Liability Balance, March 31, 2023 $ 15,685 $ (45,322) Net additions to sales return liability* 8,387 (40,609) Actual returns (12,867) 49,373 Balance, June 30, 2023 $ 11,205 $ (36,558) Activity during the three months ended June 30, 2022, related to estimated sales returns were as follows: Recovery Asset Refund Liability Balance, March 31, 2022 $ 11,491 $ (39,867) Net additions to sales return liability* 13,844 (40,498) Actual returns (12,680) 41,017 Balance, June 30, 2022 $ 12,655 $ (39,348) * Net additions to the sales return liability include a provision for anticipated sales returns, which consists of both contractual return rights and discretionary authorized returns. Activity during the three months ended June 30, 2023, related to loyalty programs were as follows: Amounts Balance, March 31, 2023 $ (13,144) Redemptions and expirations for loyalty certificates and points recognized in net sales 4,728 Deferred revenue for loyalty points and certificates issued (3,909) Balance, June 30, 2023 $ (12,325) Activity during the three months ended June 30, 2022, related to loyalty programs were as follows: Amounts Balance, March 31, 2022 $ (10,883) Redemptions and expirations for loyalty certificates and points recognized in net sales 4,649 Deferred revenue for loyalty points and certificates issued (3,760) Balance, June 30, 2022 $ (9,994) Amounts Balance, March 31, 2023 $ (13,448) Additions of customer cash payments (20,589) Revenue recognized 13,401 Balance, June 30, 2023 $ (20,636) Activity during the three months ended June 30, 2022, related to deferred revenue were as follows: Amounts Balance, March 31, 2022 $ (15,804) Additions of customer cash payments (20,510) Revenue recognized 12,429 Balance, June 30, 2022 $ (23,885) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Assets and liabilities that are measured on a recurring basis at fair value in the condensed consolidated balance sheets are as follows: As of Measured Using June 30, 2023 Level 1 Level 2 Level 3 Money-market funds $ 795,364 $ 795,364 $ — $ — Non-qualified deferred compensation asset 9,382 9,382 — — Non-qualified deferred compensation liability (13,850) (13,850) — — Designated Derivative Contracts asset 418 — 418 — Designated Derivative Contracts liability (90) — (90) — As of Measured Using March 31, 2023 Level 1 Level 2 Level 3 Money-market funds $ 675,468 $ 675,468 $ — $ — Non-qualified deferred compensation asset 8,399 8,399 — — Non-qualified deferred compensation liability (11,326) (11,326) — — |
Income Taxes - (Tables)
Income Taxes - (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023 2022 Income tax expense $ 17,812 $ 12,153 Effective income tax rate 21.9 % 21.3 % |
Commitments and Contingencies -
Commitments and Contingencies - (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Supplemental Lease Information | Supplemental information for amounts presented in the condensed consolidated statements of cash flows related to operating leases, were as follows: Three Months Ended June 30, 2023 2022 Non-cash operating activities Operating lease assets obtained in exchange for lease liabilities* $ 21,587 $ 6,207 Reductions to operating lease assets for reductions to lease liabilities* (65) (276) *Amounts disclosed include non-cash additions or reductions resulting from lease remeasurements. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | As of June 30, 2023, the Company has the following derivative contracts recorded at fair value in the condensed consolidated balance sheets: Designated Non-Designated Derivative Contracts Total Notional value $ 114,312 $ — $ 114,312 Fair value recorded in other current assets 418 — 418 Fair value recorded in other accrued expenses (90) — (90) |
Schedule of Location and Amount of Gains and Losses Related to Derivatives Designated as Hedging Instruments | The following table summarizes the effect of Designated Derivative Contracts and the related income tax effects of unrealized gains or losses recorded in the condensed consolidated statements of comprehensive income for changes in AOCL: Three Months Ended June 30, 2023 2022 Gain recorded in Other comprehensive income $ 411 $ 1,000 Reclassifications from Accumulated other comprehensive gain into net sales 21 — Income tax expense in Other comprehensive income (80) (242) Total $ 352 $ 758 |
Schedule of Location and Amount of Gains and Losses Related to Derivatives Not Designated as Hedging Instruments | The following table summarizes the effect of Non-Designated Derivative Contracts recorded in the condensed consolidated statements of comprehensive income: Three Months Ended June 30, 2023 2022 Gain recorded in SG&A expenses $ — $ 80 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock Repurchases | Stock repurchase activity under the Company's stock repurchase program, was as follows: Three Months Ended June 30, 2023 2022 Dollar value of shares repurchased (1) (2) $ 25,469 $ 99,993 Total number of shares repurchased (3) 52,410 384,413 Weighted average price paid per share $ 485.95 $ 260.12 (1) The dollar value of shares repurchased excludes the cost of broker commissions, excise taxes, and other costs associated with the program. (2) May not calculate on rounded dollars. (3) All share repurchases were made pursuant to the Company's publicly announced stock repurchase program in open-market transactions. |
Components of Accumulated Other Comprehensive Loss | The components within AOCL, net of tax, recorded in the condensed consolidated balance sheets are as follows: June 30, 2023 March 31, 2023 Unrealized gain on cash flow hedges $ 352 $ — Cumulative foreign currency translation loss (47,686) (39,035) Total $ (47,334) $ (39,035) |
Basic and Diluted Shares (Table
Basic and Diluted Shares (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023 2022 Basic 26,165,000 26,777,000 Dilutive effect of equity awards 156,000 171,000 Diluted 26,321,000 26,948,000 Excluded Time-Based Restricted Stock Units (RSUs) and Performance-Based Restricted Stock Units (PSUs) — 18,000 Long-Term Incentive Plan PSUs (LTIP PSUs) 76,000 50,000 Deferred Non-Employee Director Equity Awards — 2,000 Employee Stock Purchase Plan 1,000 — |
Reportable Operating Segments (
Reportable Operating Segments (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Business Segments Information | Reportable operating segment information, with a reconciliation to the condensed consolidated statements of comprehensive income, was as follows: Three Months Ended June 30, 2023 2022 Net sales UGG brand wholesale $ 121,545 $ 137,862 HOKA brand wholesale 260,847 231,885 Teva brand wholesale 35,132 46,895 Sanuk brand wholesale 6,470 10,726 Other brands wholesale 1,427 1,993 Direct-to-Consumer 250,370 185,100 Total $ 675,791 $ 614,461 Income (loss) from operations UGG brand wholesale $ 16,866 $ 30,665 HOKA brand wholesale 86,524 69,616 Teva brand wholesale 9,237 12,493 Sanuk brand wholesale 759 2,466 Other brands wholesale (2,041) (469) Direct-to-Consumer 75,462 41,220 Unallocated overhead costs (116,071) (99,650) Total $ 70,736 $ 56,341 Assets allocated to each reportable operating segment, with a reconciliation to the condensed consolidated balance sheets, are as follows: June 30, 2023 March 31, 2023 Assets UGG brand wholesale $ 459,001 $ 261,683 HOKA brand wholesale 449,694 446,450 Teva brand wholesale 68,660 94,735 Sanuk brand wholesale 35,329 41,405 Other brands wholesale 31,947 24,448 Direct-to-Consumer 229,166 219,194 Total assets from reportable operating segments 1,273,797 1,087,915 Unallocated cash and cash equivalents 1,046,889 981,795 Unallocated deferred tax assets, net 70,585 72,592 Unallocated other corporate assets 456,631 413,901 Total $ 2,847,902 $ 2,556,203 |
Concentration of Business (Tabl
Concentration of Business (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Schedule of Revenue Concentration of Risk | The Company sells its products globally to customers and end consumers in various countries, with net sales concentrations as follows: Three Months Ended June 30, 2023 2022 International net sales $ 256,256 $ 229,946 % of net sales 37.9 % 37.4 % Net sales in foreign currencies $ 148,971 $ 108,941 % of net sales 22.0 % 17.7 % Ten largest global customers as % of net sales 22.8 % 29.5 % |
Schedule of Long-lived Assets | Long-lived assets, which consist of property and equipment, net, recorded in the condensed consolidated balance sheets, are as follows: June 30, 2023 March 31, 2023 United States $ 265,331 $ 244,529 Foreign* 23,429 22,150 Total $ 288,760 $ 266,679 *No single foreign country’s property and equipment, net, represents 10.0% or more of the Company’s total property and equipment, net, as of June 30, 2023, and March 31, 2023. |
General - Narrative (Details)
General - Narrative (Details) | 3 Months Ended |
Jun. 30, 2023 segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 6 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Recovery Asset | ||
Beginning balance | $ 15,685 | $ 11,491 |
Net additions to sales return liability | 8,387 | 13,844 |
Actual returns | (12,867) | (12,680) |
Ending balance | 11,205 | 12,655 |
Contract Liability | ||
Beginning balance | (45,322) | (39,867) |
Net additions to sales return liability | (40,609) | (40,498) |
Actual returns | 49,373 | 41,017 |
Ending balance | $ (36,558) | $ (39,348) |
Revenue Recognition - Loyalty P
Revenue Recognition - Loyalty Programs (Details) - Loyalty Programs - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Contract with Customer, Loyalty Program [Roll Forward] | ||
Beginning balance | $ (13,144) | $ (10,883) |
Redemptions and expirations for loyalty certificates and points recognized in net sales | 4,728 | 4,649 |
Deferred revenue for loyalty points and certificates issued | (3,909) | (3,760) |
Ending balance | $ (12,325) | $ (9,994) |
Revenue Recognition - Deferred
Revenue Recognition - Deferred Revenue (Details) - Wholesale - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Contract With Customer, Liability [Roll Forward] | ||
Beginning balance | $ (13,448) | $ (15,804) |
Additions of customer cash payments | (20,589) | (20,510) |
Revenue recognized | 13,401 | 12,429 |
Ending balance | $ (20,636) | $ (23,885) |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-qualified deferred compensation asset | $ 9,382 | $ 8,399 |
Non-qualified deferred compensation liability | (13,850) | (11,326) |
Designated Derivative Contracts asset | 418 | |
Designated Derivative Contracts liability | (90) | |
Money-market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money-market funds | 795,364 | 675,468 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-qualified deferred compensation asset | 9,382 | 8,399 |
Non-qualified deferred compensation liability | (13,850) | (11,326) |
Level 1 | Money-market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money-market funds | 795,364 | 675,468 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-qualified deferred compensation asset | 0 | 0 |
Non-qualified deferred compensation liability | 0 | 0 |
Level 2 | Money-market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money-market funds | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-qualified deferred compensation asset | 0 | 0 |
Non-qualified deferred compensation liability | 0 | 0 |
Level 3 | Money-market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money-market funds | 0 | $ 0 |
Designated Derivative Contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Designated Derivative Contracts asset | 418 | |
Designated Derivative Contracts liability | (90) | |
Designated Derivative Contracts | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Designated Derivative Contracts asset | 0 | |
Designated Derivative Contracts liability | 0 | |
Designated Derivative Contracts | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Designated Derivative Contracts asset | 418 | |
Designated Derivative Contracts liability | (90) | |
Designated Derivative Contracts | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Designated Derivative Contracts asset | 0 | |
Designated Derivative Contracts liability | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-qualified deferred compensation asset | $ 9,382 | $ 8,399 |
Non-qualified deferred compensation liability | 13,850 | 11,326 |
Other Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-qualified deferred compensation asset | 9,382 | 8,399 |
Other Accrued Expenses | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Current deferred compensation liability | 702 | 737 |
Other Long-Term Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Noncurrent deferred compensation liability | $ 13,148 | $ 10,589 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 17,812 | $ 12,153 |
Effective income tax rate | 21.90% | 21.30% |
Commitments and Contingencies_2
Commitments and Contingencies - Narrative (Details) | Jun. 30, 2023 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease renewal term (in years) | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease renewal term (in years) | 15 years |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Supplemental Lease Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease assets obtained in exchange for lease liabilities | $ 21,587 | $ 6,207 |
Reductions to operating lease assets for reductions to lease liabilities | $ (65) | $ (276) |
Derivative Instruments (Details
Derivative Instruments (Details) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2023 USD ($) counterparty | Jun. 30, 2022 USD ($) | Jul. 13, 2023 USD ($) counterparty | Mar. 31, 2023 USD ($) | |
Foreign currency exchange contracts and hedging | ||||
Notional value | $ 114,312 | $ 0 | ||
Fair value recorded in other current assets | 418 | |||
Fair value recorded in other accrued expenses | $ (90) | |||
Number of counterparties in derivative contracts | counterparty | 3 | |||
Maturity period (in months) | 9 months | |||
Gain recorded in Other comprehensive income | $ 411 | $ 1,000 | ||
Reclassifications from Accumulated other comprehensive gain into net sales | 21 | 0 | ||
Income tax expense in Other comprehensive income | (80) | (242) | ||
Unrealized gain on cash flow hedges | 352 | 758 | ||
Gain recorded in SG&A expenses | $ 0 | $ 80 | ||
Reclassification period of unrealized gain into net sales (in months) | 9 months | |||
Foreign Exchange Forward | ||||
Foreign currency exchange contracts and hedging | ||||
Maturity of foreign currency derivatives | 15 months | |||
Foreign Exchange Option | ||||
Foreign currency exchange contracts and hedging | ||||
Maturity of foreign currency derivatives | 15 months | |||
Designated Derivative Contracts | ||||
Foreign currency exchange contracts and hedging | ||||
Notional value | $ 114,312 | |||
Fair value recorded in other current assets | 418 | |||
Fair value recorded in other accrued expenses | (90) | |||
Designated Derivative Contracts | Subsequent Event | ||||
Foreign currency exchange contracts and hedging | ||||
Notional value | $ 44,302 | |||
Number of counterparties in derivative contracts | counterparty | 3 | |||
Maturity period (in months) | 9 months | |||
Non-Designated Derivative Contracts | ||||
Foreign currency exchange contracts and hedging | ||||
Notional value | 0 | |||
Fair value recorded in other current assets | 0 | |||
Fair value recorded in other accrued expenses | $ 0 |
Stockholders' Equity - Stock Re
Stockholders' Equity - Stock Repurchase Programs (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Stockholders' Equity Note [Abstract] | ||
Dollar value of shares that may yet be repurchased, excluding excise taxes | $ 1,331,166 | |
Dollar value of shares repurchased | $ 25,469 | $ 99,993 |
Total number of shares repurchased (in shares) | 52,410 | 384,413 |
Weighted average price paid per share (in dollars per share) | $ 485.95 | $ 260.12 |
Stockholders' Equity - Accumula
Stockholders' Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Stockholders' Equity Note [Abstract] | ||
Unrealized gain on cash flow hedges | $ 352 | $ 0 |
Cumulative foreign currency translation loss | (47,686) | (39,035) |
Total | $ (47,334) | $ (39,035) |
Basic and Diluted Shares (Detai
Basic and Diluted Shares (Details) - shares shares in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Basic (in shares) | 26,165 | 26,777 |
Dilutive effect of equity awards (in shares) | 156 | 171 |
Diluted (in shares) | 26,321 | 26,948 |
Time-Based Restricted Stock Units (RSUs) and Performance-Based Restricted Stock Units (PSUs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 18 |
Long-Term Incentive Plan PSUs (LTIP PSUs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 76 | 50 |
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 | 2 |
Employee Stock Purchase Plan | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1 | 0 |
Reportable Operating Segments_2
Reportable Operating Segments (Details) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) | Mar. 31, 2023 USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | segment | 6 | ||
Net sales | $ 675,791 | $ 614,461 | |
Income (loss) from operations | 70,736 | 56,341 | |
Assets | 2,847,902 | $ 2,556,203 | |
Unallocated cash and cash equivalents | 1,046,889 | 981,795 | |
Unallocated deferred tax assets, net | 70,585 | 72,592 | |
Reportable segments | |||
Segment Reporting Information [Line Items] | |||
Assets | 1,273,797 | 1,087,915 | |
Reportable segments | UGG brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Assets | 459,001 | 261,683 | |
Reportable segments | HOKA brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Assets | 449,694 | 446,450 | |
Reportable segments | Teva brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Assets | 68,660 | 94,735 | |
Reportable segments | Sanuk brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Assets | 35,329 | 41,405 | |
Reportable segments | Other brands wholesale | |||
Segment Reporting Information [Line Items] | |||
Assets | 31,947 | 24,448 | |
Reportable segments | Direct-to-Consumer | |||
Segment Reporting Information [Line Items] | |||
Assets | 229,166 | 219,194 | |
Segment reconciling items | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | (116,071) | (99,650) | |
Unallocated cash and cash equivalents | 1,046,889 | 981,795 | |
Unallocated deferred tax assets, net | 70,585 | 72,592 | |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Unallocated other corporate assets | 456,631 | $ 413,901 | |
Wholesale | UGG brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Net sales | 121,545 | 137,862 | |
Wholesale | HOKA brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Net sales | 260,847 | 231,885 | |
Wholesale | Teva brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Net sales | 35,132 | 46,895 | |
Wholesale | Sanuk brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Net sales | 6,470 | 10,726 | |
Wholesale | Other brands wholesale | |||
Segment Reporting Information [Line Items] | |||
Net sales | 1,427 | 1,993 | |
Wholesale | Reportable segments | UGG brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | 16,866 | 30,665 | |
Wholesale | Reportable segments | HOKA brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | 86,524 | 69,616 | |
Wholesale | Reportable segments | Teva brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | 9,237 | 12,493 | |
Wholesale | Reportable segments | Sanuk brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | 759 | 2,466 | |
Wholesale | Reportable segments | Other brands wholesale | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | (2,041) | (469) | |
Direct-to-Consumer | Direct-to-Consumer | |||
Segment Reporting Information [Line Items] | |||
Net sales | 250,370 | 185,100 | |
Direct-to-Consumer | Reportable segments | Direct-to-Consumer | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | $ 75,462 | $ 41,220 |
Concentration of Business (Deta
Concentration of Business (Details) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2023 USD ($) tannery | Jun. 30, 2022 USD ($) | Mar. 31, 2023 USD ($) | |
Concentration Risk [Line Items] | |||
Net sales | $ 675,791 | $ 614,461 | |
Number of tanneries | tannery | 2 | ||
Long-lived assets | $ 288,760 | $ 266,679 | |
Sales Revenue, Net | Customer Concentration Risk | 10 Largest Customers | |||
Concentration Risk [Line Items] | |||
Concentration risk | 22.80% | 29.50% | |
Trade Accounts Receivable | Customer Concentration Risk | One Customer | |||
Concentration Risk [Line Items] | |||
Concentration risk | 11.10% | ||
Foreign | |||
Concentration Risk [Line Items] | |||
Long-lived assets | $ 23,429 | 22,150 | |
Foreign | International net sales | |||
Concentration Risk [Line Items] | |||
Net sales | 256,256 | $ 229,946 | |
Foreign | Net sales in foreign currencies | |||
Concentration Risk [Line Items] | |||
Net sales | $ 148,971 | $ 108,941 | |
Foreign | Sales Revenue, Net | International net sales | |||
Concentration Risk [Line Items] | |||
Concentration risk | 37.90% | 37.40% | |
Foreign | Sales Revenue, Net | Net sales in foreign currencies | |||
Concentration Risk [Line Items] | |||
Concentration risk | 22% | 17.70% | |
United States | |||
Concentration Risk [Line Items] | |||
Long-lived assets | $ 265,331 | $ 244,529 |
Supplier Finance Program (Detai
Supplier Finance Program (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Payables and Accruals [Abstract] | ||
Supplier finance programs, current portion | $ 29,093 | $ 7,740 |