COVER PAGE
COVER PAGE - shares | 3 Months Ended | |
Jun. 30, 2024 | Jul. 11, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
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 $0.01 per share | |
Trading Symbol | DECK | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 25,410,572 | |
Entity Central Index Key | 0000910521 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2025 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --03-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 |
ASSETS | ||
Cash and cash equivalents | $ 1,438,397 | $ 1,502,051 |
Trade accounts receivable, net of allowances ($22,621 and $27,331 as of June 30, 2024, and March 31, 2024, respectively) | 303,128 | 296,565 |
Inventories | 753,282 | 474,311 |
Prepaid expenses | 45,221 | 34,284 |
Other current assets | 43,323 | 92,713 |
Income tax receivable | 29,479 | 43,559 |
Total current assets | 2,612,830 | 2,443,483 |
Property and equipment, net of accumulated depreciation ($362,180 and $349,138 as of June 30, 2024, and March 31, 2024, respectively) (Note 10) | 305,585 | 302,122 |
Operating lease assets | 221,207 | 225,669 |
Goodwill | 13,990 | 13,990 |
Other intangible assets, net of accumulated amortization ($91,609 and $91,314 as of June 30, 2024, and March 31, 2024, respectively) | 26,701 | 27,083 |
Deferred tax assets, net | 71,613 | 72,584 |
Other assets | 54,293 | 50,648 |
Total assets | 3,306,219 | 3,135,579 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Trade accounts payable | 642,595 | 378,503 |
Accrued payroll | 61,531 | 123,653 |
Operating lease liabilities | 46,362 | 53,581 |
Other accrued expenses | 104,640 | 106,785 |
Income tax payable | 56,678 | 52,338 |
Value added tax payable | 664 | 5,133 |
Total current liabilities | 912,470 | 719,993 |
Long-term operating lease liabilities | 216,006 | 213,298 |
Income tax liability | 52,961 | 52,470 |
Other long-term liabilities | 50,300 | 42,350 |
Total long-term liabilities | 319,267 | 308,118 |
Commitments and contingencies (Note 5) | ||
Stockholders’ equity | ||
Common stock (par value $0.01 per share; 125,000 shares authorized; shares issued and outstanding of 25,426 and 25,593 as of June 30, 2024, and March 31, 2024, respectively) | 254 | 255 |
Additional paid-in capital | 253,486 | 245,149 |
Retained earnings | 1,875,275 | 1,912,797 |
Accumulated other comprehensive loss (Note 7) | (54,533) | (50,733) |
Total stockholders’ equity | 2,074,482 | 2,107,468 |
Total liabilities and stockholders’ equity | $ 3,306,219 | $ 3,135,579 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowances | $ 22,621 | $ 27,331 |
Accumulated depreciation | 362,180 | 349,138 |
Accumulated amortization and impairments | $ 91,609 | $ 91,314 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares (in shares) | 125,000 | 125,000 |
Common stock, issued shares (in shares) | 25,426 | 25,593 |
Common stock, outstanding shares (in shares) | 25,426 | 25,593 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Income Statement [Abstract] | ||
Net sales (Note 2, Note 9, and Note 10) | $ 825,347 | $ 675,791 |
Cost of sales | 355,347 | 329,367 |
Gross profit | 470,000 | 346,424 |
Selling, general, and administrative expenses | 337,193 | 275,688 |
Income from operations (Note 9) | 132,807 | 70,736 |
Interest income | (17,252) | (11,287) |
Interest expense | 1,031 | 1,005 |
Other income, net | (125) | (346) |
Total other income, net | (16,346) | (10,628) |
Income before income taxes | 149,153 | 81,364 |
Income tax expense (Note 4) | 33,528 | 17,812 |
Net income | 115,625 | 63,552 |
Other comprehensive loss, net of tax | ||
Unrealized gain on cash flow hedges | 856 | 352 |
Foreign currency translation loss | (4,656) | (8,651) |
Total other comprehensive loss, net of tax | (3,800) | (8,299) |
Comprehensive income | $ 111,825 | $ 55,253 |
Net income per share | ||
Basic (in dollars per share) | $ 4.54 | $ 2.43 |
Diluted (in dollars per share) | $ 4.52 | $ 2.41 |
Weighted-average common shares outstanding (Note 8) | ||
Basic (in shares) | 25,478 | 26,165 |
Diluted (in shares) | 25,581 | 26,321 |
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, 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) |
Beginning balance (in shares) at Mar. 31, 2024 | 25,593,000 | 25,593,000 | |||
Beginning balance at Mar. 31, 2024 | $ 2,107,468 | $ 255 | 245,149 | 1,912,797 | (50,733) |
Increase (Decrease) in Stockholders' Equity | |||||
Stock-based compensation | 8,231 | 8,231 | |||
Shares issued upon vesting (in shares) | 1,000 | ||||
Exercise of stock options (in shares) | 9,000 | ||||
Exercise of stock options | 601 | 601 | |||
Shares withheld for taxes | $ (495) | (495) | |||
Repurchases of common stock (Note 7) (in shares) | (176,956) | (177,000) | |||
Repurchases of common stock (Note 7) | $ (151,967) | $ (1) | (151,966) | ||
Excise taxes related to repurchases of common stock | (1,181) | (1,181) | |||
Net income | 115,625 | 115,625 | |||
Total other comprehensive loss | $ (3,800) | (3,800) | |||
Ending balance (in shares) at Jun. 30, 2024 | 25,426,000 | 25,426,000 | |||
Ending balance at Jun. 30, 2024 | $ 2,074,482 | $ 254 | $ 253,486 | $ 1,875,275 | $ (54,533) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
OPERATING ACTIVITIES | ||
Net income | $ 115,625 | $ 63,552 |
Reconciliation of net income to net cash provided by (used in) operating activities: | ||
Depreciation, amortization, and accretion | 17,061 | 12,353 |
Amortization on cloud computing arrangements | 465 | 558 |
Bad debt benefit | (3,291) | (2,974) |
Deferred tax expense | 170 | 478 |
Stock-based compensation | 8,346 | 6,989 |
Loss on disposal of long-lived assets | 79 | 0 |
Changes in operating assets and liabilities: | ||
Trade accounts receivable, net | (3,272) | 33,282 |
Inventories | (278,972) | (207,701) |
Prepaid expenses and other current assets | 39,816 | (8,472) |
Income tax receivable | 14,079 | (13,529) |
Net operating lease assets and lease liabilities | (486) | 7,657 |
Other assets | (4,073) | (1,933) |
Trade accounts payable | 266,679 | 254,063 |
Other accrued expenses | (71,398) | (33,247) |
Income tax payable | 4,340 | 10,691 |
Other long-term liabilities | 7,482 | 3,495 |
Net cash provided by operating activities | 112,650 | 125,262 |
INVESTING ACTIVITIES | ||
Purchases of property and equipment | (22,521) | (30,732) |
Net cash used in investing activities | (22,521) | (30,732) |
FINANCING ACTIVITIES | ||
Proceeds from exercise of stock options | 601 | 548 |
Repurchases of common stock | (151,967) | (25,469) |
Cash paid for shares withheld for taxes | (495) | (698) |
Net cash used in financing activities | (151,861) | (25,619) |
Effect of foreign currency exchange rates on cash and cash equivalents | (1,922) | (3,817) |
Net change in cash and cash equivalents | (63,654) | 65,094 |
Cash and cash equivalents at beginning of period | 1,502,051 | 981,795 |
Cash and cash equivalents at end of period | 1,438,397 | 1,046,889 |
Cash paid during the period | ||
Income taxes | 14,998 | 19,716 |
Interest | 414 | 473 |
Operating leases | 16,339 | 14,974 |
Non-cash investing activities | ||
Changes in trade accounts payable and other accrued expenses for purchases of property and equipment | (2,582) | (5,024) |
Accrued for asset retirement obligation assets related to leasehold improvements | 975 | 242 |
Leasehold improvements acquired through tenant allowances | 0 | 8,127 |
Non-cash financing activities | ||
Accrued excise taxes related to repurchases of common stock | $ 1,181 | $ 123 |
General
General | 3 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | GENERAL The Company. Deckers Outdoor Corporation and its wholly owned subsidiaries (collectively, the Company) is a global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories developed for both everyday casual lifestyle use and high-performance activities. The Company’s six proprietary brands include the UGG, HOKA, Teva, Sanuk, Koolaburra, and AHNU brands. The Company sells its products through quality domestic and international retailers, international distributors, and directly to its global consumers through its DTC business, which is comprised of its e-commerce business and retail stores. Independent third-party contractors manufacture all of the Company’s products. Seasonality . 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 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, which generally occur more evenly throughout the year, continue to increase as a percentage of the Company’s aggregate net sales, the Company expects to continue to see the impact from seasonality 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, 2024, and for the three months ended June 30, 2024 (the current period), and 2023 (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, 2024, 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, 2024 (prior fiscal year), which was filed with the SEC on May 24, 2024 (2024 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, 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 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 and AHNU brands), 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 as well as Note 12, “Subsequent Events,” for an update on the Company’s sale of the Sanuk brand and certain related assets. Recent Accounting Pronouncements. The Financial Accounting Standards Board has issued Accounting Standards Updates (ASU) that have been adopted and not yet adopted by the Company as stated below. Recently Adopted. The following is a summary of a recently adopted ASU and its expected 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 of 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 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. This ASU did not have a material impact on the recognition, measurement, or presentation of supplier finance programs in the Company’s annual and interim consolidated financial statements. However, it did result in additional disclosure. 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. The Company plans to adopt the annual roll forward requirement beginning with its fiscal year (FY) ending March 31, 2025, and does not expect the adoption to have a material impact on its annual and interim consolidated financial statements. Not Yet Adopted. The following is a summary of each ASU that has been issued and is applicable to the Company, but which has not yet been adopted, as well as the planned period of adoption, and the expected impact on the Company upon adoption: Standard Description Planned Period of Adoption Expected Impact on Adoption ASU 2023-07 - Improvements to Reportable Segment Disclosures The ASU requires annual and interim disclosures of significant segment expenses, including an amount and composition description for other segment items, and how reported measures of profit or loss are used by the chief operating decision maker ( CODM ) in assessing segment performance and deciding how to allocate resources. The ASU is effective on a retrospective basis for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. Q4 FY 2025 and Q1 FY 2026 The Company is currently evaluating the impact of the adoption of this ASU on its annual and interim consolidated financial statements. ASU 2023-09 - Improvements to Income Tax Disclosures The ASU requires annual disclosures of prescribed standard categories for the components of the effective tax rate reconciliation, disclosure of income taxes paid disaggregated by jurisdiction, and other income-tax related disclosures. The ASU is effective on a prospective basis, with retrospective application permitted, for fiscal years beginning after December 15, 2024. Early adoption is permitted. Q4 FY 2026 The Company is currently evaluating the impact of the adoption of this ASU on its annual and interim consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | REVENUE RECOGNITION Disaggregated Revenue. Refer to Note 9, “Reportable Operating Segments,” for further information on the Company’s disaggregation of revenue by reportable operating segment. Sales Return Asset and Liability. Sales returns are a refund asset for the right to recover the inventory and a refund liability for the stand-ready right of return. 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 following tables summarize changes in the estimated sales returns for the periods presented: Recovery Asset Refund Liability Balance, March 31, 2024 $ 13,866 $ (55,327) Net additions to sales return liability (1) 10,976 (40,741) Actual returns (14,077) 58,277 Balance, June 30, 2024 $ 10,765 $ (37,791) Recovery Asset Refund Liability Balance, March 31, 2023 $ 15,685 $ (45,322) Net additions to sales return liability (1) 8,387 (40,609) Actual returns (12,867) 49,373 Balance, June 30, 2023 $ 11,205 $ (36,558) (1) Net additions to the sales return liability include a provision for anticipated sales returns, which consists of both contractual return rights and discretionary authorized returns. Contract Liabilities. Contract liabilities are recorded in other accrued expenses in the condensed consolidated balance sheets and include loyalty programs and other deferred revenue. Loyalty Programs. Activity related to loyalty programs was as follows: Three Months Ended June 30, 2024 2023 Beginning balance $ (17,586) $ (13,144) Redemptions and expirations for loyalty certificates and points recognized in net sales 5,060 4,728 Deferred revenue for loyalty points and certificates issued (4,575) (3,909) Ending balance $ (17,101) $ (12,325) Deferred Revenue. Activity related to deferred revenue was as follows: Three Months Ended June 30, 2024 2023 Beginning balance $ (9,591) $ (13,448) Additions of customer cash payments (27,101) (20,589) Revenue recognized 9,254 13,401 Ending balance $ (27,438) $ (20,636) Refer to Note 2, “Revenue Recognition,” in the Company’s consolidated financial statements in Part IV of the 2024 Annual Report for further information on the Company’s variable consideration accounting policies, including sales return asset and liability, as well as contract liabilities. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The Company measures certain financial assets and liabilities at fair value on a recurring basis. Refer to Note 4, “Fair Value Measurements,” in the Company’s consolidated financial statements in Part IV of the 2024 Annual Report for further information on the Company’s fair value accounting policies. 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, 2024 Level 1 Level 2 Level 3 Assets: Cash equivalents: Money-market funds $ 1,079,101 $ 1,079,101 $ — $ — Other current assets: Designated Derivative Contracts asset 1,399 — 1,399 — Other assets: Non-qualified deferred compensation asset 14,480 14,480 — — Total assets measured at fair value $ 1,094,980 $ 1,093,581 $ 1,399 $ — As of Measured Using June 30, 2024 Level 1 Level 2 Level 3 Liabilities: Other accrued expenses: Non-qualified deferred compensation liability $ (412) $ (412) $ — $ — Designated Derivative Contracts liability (267) — (267) — Other long-term liabilities: Non-qualified deferred compensation liability (23,580) (23,580) — — Total liabilities measured at fair value $ (24,259) $ (23,992) $ (267) $ — As of Measured Using March 31, 2024 Level 1 Level 2 Level 3 Assets: Cash equivalents: Money-market funds $ 1,152,083 $ 1,152,083 $ — $ — Other assets: Non-qualified deferred compensation asset 13,553 13,553 — — Total assets measured at fair value $ 1,165,636 $ 1,165,636 $ — $ — Liabilities: Other accrued expenses: Non-qualified deferred compensation liability $ (408) $ (408) $ — $ — Other long-term liabilities: Non-qualified deferred compensation liability (16,229) (16,229) — — Total liabilities measured at fair value $ (16,637) $ (16,637) $ — $ — The fair value of Designated Derivative 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), with related assets and liabilities 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 the definition of the term Designated Derivative Contracts. |
Income Taxes
Income Taxes | 3 Months Ended |
Jun. 30, 2024 | |
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, 2024 2023 Income tax expense $ 33,528 $ 17,812 Effective income tax rate 22.5 % 21.9 % The tax provisions during the three months ended June 30, 2024, and 2023, 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, 2025, and March 31, 2024, respectively, and were adjusted for discrete items that occurred within the periods presented above. During the three months ended June 30, 2024, the net increase in the effective income tax rate, compared to the prior period, was due to higher operating income, including changes in jurisdictional mix of worldwide income before income taxes, partially offset by net discrete tax benefits for stock-based compensation. Recent Tax Law Changes. The Organization for Economic Co-operation and Development (commonly known as OECD) has released Pillar Two model rules introducing a 15% global minimum tax rate for large multinational corporations to be effective starting with tax periods ending in 2024. Various jurisdictions the Company operates in have enacted or plan to enact legislation beginning in calendar year 2024 or in subsequent years. The enactment of Pillar Two legislation did not have a material effect on the Company’s condensed consolidated statements of comprehensive income during the three months ended June 30, 2024. The Company will continue to monitor and reflect the impact of such legislative changes in future periods, as each of the respective jurisdictions enact the legislation and the legislation becomes effective. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Leases. The Company primarily leases retail stores, showrooms, offices, and distribution facilities under operating lease contracts. There were no material changes outside the ordinary course of business during the three months ended June 30, 2024, to the operating lease terms disclosed in the 2024 Annual Report. 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, 2024 2023 Non-cash operating activities Operating lease assets obtained in exchange for lease liabilities (1) $ 12,336 $ 21,587 Reductions to operating lease assets for reductions to lease liabilities (1) (1,106) (65) (1) Amounts disclosed include non-cash additions or reductions resulting from lease remeasurements, as well as reductions for tenant improvement allowances. Operating lease liabilities recorded in the condensed consolidated balance sheets exclude an aggregate of $15,289 of undiscounted minimum lease payments due pursuant to leases signed but not yet commenced during the three months ended June 30, 2024, and through July 11, 2024, primarily for a new HOKA brand retail store lease in Paris that will be operational during the quarter ending December 31, 2024. Purchase Obligations. There were no material changes to purchase obligations last disclosed in the 2024 Annual Report outside the ordinary course of business during the three months ended June 30, 2024. 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 matters can have an adverse impact on the Company as a result of legal costs, diversion of management’s time and resources, and other factors. Refer to Note 7, “Commitments and Contingencies,” in the Company’s consolidated financial statements in Part IV of the 2024 Annual Report for further information on the Company’s contractual obligations and commitments. |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Leases. The Company primarily leases retail stores, showrooms, offices, and distribution facilities under operating lease contracts. There were no material changes outside the ordinary course of business during the three months ended June 30, 2024, to the operating lease terms disclosed in the 2024 Annual Report. 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, 2024 2023 Non-cash operating activities Operating lease assets obtained in exchange for lease liabilities (1) $ 12,336 $ 21,587 Reductions to operating lease assets for reductions to lease liabilities (1) (1,106) (65) (1) Amounts disclosed include non-cash additions or reductions resulting from lease remeasurements, as well as reductions for tenant improvement allowances. Operating lease liabilities recorded in the condensed consolidated balance sheets exclude an aggregate of $15,289 of undiscounted minimum lease payments due pursuant to leases signed but not yet commenced during the three months ended June 30, 2024, and through July 11, 2024, primarily for a new HOKA brand retail store lease in Paris that will be operational during the quarter ending December 31, 2024. Purchase Obligations. There were no material changes to purchase obligations last disclosed in the 2024 Annual Report outside the ordinary course of business during the three months ended June 30, 2024. 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 matters can have an adverse impact on the Company as a result of legal costs, diversion of management’s time and resources, and other factors. Refer to Note 7, “Commitments and Contingencies,” in the Company’s consolidated financial statements in Part IV of the 2024 Annual Report for further information on the Company’s contractual obligations and commitments. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Jun. 30, 2024 | |
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 after-tax unrealized gains or losses from changes in fair value of Designated Derivative Contracts are recorded as a component of accumulated other comprehensive loss (AOCL) in the condensed consolidated balance sheets 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. Refer to Note 1, “General,” in the Company’s consolidated financial statements in Part IV of the 2024 Annual Report for further information regarding the Company’s derivative instruments accounting policy. As of June 30, 2024, the Company has the following Designated Derivative Contracts recorded at fair value in the condensed consolidated balance sheets: Notional value $ 158,842 Fair value recorded in other current assets 1,399 Fair value recorded in other accrued expenses (267) As of June 30, 2024, four counterparties hold the Company’s outstanding derivative contracts, all of which are expected to mature in the next nine months. As of March 31, 2024, 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, 2024 2023 Gain recorded in OCI $ 1,132 $ 411 Reclassifications from AOCL into net sales — 21 Income tax expense in OCI (276) (80) Total $ 856 $ 352 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, 2024, 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. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Jun. 30, 2024 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Stock Repurchase Program. The Company’s Board of Directors (Board) has approved various authorizations under the Company’s stock repurchase program to repurchase shares of its common stock in the open market or in privately negotiated transactions, subject to market conditions, applicable legal requirements, and other factors (collectively, the stock repurchase program). As of June 30, 2024, the aggregate remaining approved amount under the stock repurchase program is $789,737. 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, 2024 2023 Total number of shares repurchased (1) 176,956 52,410 Average price per share paid $ 858.79 $ 485.95 Dollar value of shares repurchased (2) (3) $ 151,967 $ 25,469 (1) All share repurchases were made pursuant to the Company’s stock repurchase program in open-market transactions. (2) The dollar value of shares repurchased excludes the cost of broker commissions, excise taxes, and other costs. (3) May not calculate on rounded dollars. Subsequent to June 30, 2024, through July 11, 2024, the Company repurchased 17,307 shares at an average price of $924.11 per share for $15,994 and had $773,743 remaining authorized under the stock repurchase program. Accumulated Other Comprehensive Loss. The components within AOCL, net of tax, recorded in the condensed consolidated balance sheets are as follows: June 30, 2024 March 31, 2024 Unrealized gain on cash flow hedges $ 856 $ — Cumulative foreign currency translation loss (55,389) (50,733) Total $ (54,533) $ (50,733) |
Basic and Diluted Shares
Basic and Diluted Shares | 3 Months Ended |
Jun. 30, 2024 | |
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, 2024 2023 Basic 25,478,000 26,165,000 Dilutive effect of equity awards 103,000 156,000 Diluted 25,581,000 26,321,000 Excluded Long-Term Incentive Plan Performance-Based Restricted Stock Units 48,000 76,000 Employee Stock Purchase Plan — 1,000 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. Refer to Note 8, “Stock-Based Compensation,” in the Company’s consolidated financial statements in Part IV of the 2024 Annual Report for further information on the Company’s equity incentive plans. |
Reportable Operating Segments
Reportable Operating Segments | 3 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Reportable Operating Segments | REPORTABLE OPERATING SEGMENTS Information reported to the 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, 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, 2024 2023 Net sales UGG brand wholesale $ 142,553 $ 121,545 HOKA brand wholesale 332,732 260,847 Teva brand wholesale 31,359 35,132 Sanuk brand wholesale 4,433 6,470 Other brands wholesale 3,705 1,427 Direct-to-Consumer 310,565 250,370 Total $ 825,347 $ 675,791 Three Months Ended June 30, 2024 2023 Income (loss) from operations UGG brand wholesale $ 38,430 $ 16,866 HOKA brand wholesale 124,694 86,524 Teva brand wholesale 6,789 9,237 Sanuk brand wholesale 1,603 759 Other brands wholesale (1,557) (2,041) Direct-to-Consumer 106,410 75,462 Unallocated overhead costs (143,562) (116,071) Total $ 132,807 $ 70,736 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, 2024 March 31, 2024 Assets UGG brand wholesale $ 509,965 $ 247,136 HOKA brand wholesale 490,476 436,147 Teva brand wholesale 56,713 81,703 Sanuk brand wholesale 16,955 18,526 Other brands wholesale 24,973 9,379 Direct-to-Consumer 261,893 263,840 Total assets from reportable operating segments 1,360,975 1,056,731 Unallocated cash and cash equivalents 1,438,397 1,502,051 Unallocated deferred tax assets, net 71,613 72,584 Unallocated other corporate assets 435,234 504,213 Total $ 3,306,219 $ 3,135,579 |
Concentration of Business
Concentration of Business | 3 Months Ended |
Jun. 30, 2024 | |
Risks and Uncertainties [Abstract] | |
Concentration of Business | CONCENTRATION OF BUSINESS Regions and Customers. The Company sells its products globally to customers and consumers in various countries, with net sales concentrations as follows: Three Months Ended June 30, 2024 2023 International net sales $ 309,491 $ 256,256 % of net sales 37.5 % 37.9 % Net sales in foreign currencies $ 177,624 $ 148,971 % of net sales 21.5 % 22.0 % Ten largest global customers as % of net sales 23.6 % 22.8 % For the three months ended June 30, 2024, and 2023, no single foreign country comprised 10.0% or more of the Company’s total net sales. For the three months ended June 30, 2024, and 2023, no single global customer accounted for 10.0% or more of the Company’s total net sales. The Company has two customers that represent 23.5% and 31.2% of trade accounts receivable, net, as of June 30, 2024, and March 31, 2024, respectively. 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 insured bank deposit accounts which, at times, may exceed federally insured limits. To date, the Company has not experienced any losses in such accounts. Based on the size and strength of the banking institutions used, the Company does not believe it is exposed to any significant credit risks in cash. 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, 2024 March 31, 2024 United States $ 273,741 $ 270,561 Foreign (1) 31,844 31,561 Total $ 305,585 $ 302,122 (1) 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, 2024, and March 31, 2024. |
Supplier Finance Program
Supplier Finance Program | 3 Months Ended |
Jun. 30, 2024 | |
Payables and Accruals [Abstract] | |
Supplier Finance Program | 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 that supply its 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, 2024, and March 31, 2024, the Company had $8,571 and $3,483, respectively, of balances outstanding related to the SFP recorded in trade accounts payable in the condensed consolidated balance sheets. Payments made in connection with the SFP are reported as cash used in operating activities in the trade accounts payable line item of the condensed consolidated statements of cash flows. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Sanuk Brand Asset Sale . During October 2023, the Company announced that it intended to divest the Sanuk brand in alignment with effective resource allocation and the execution of its long-term objectives. Subsequent to June 30, 2024, the Company entered into an agreement pursuant to which the buyer agreed to purchase the Sanuk brand and certain related assets, which is expected to close in August 2024. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||
Net income | $ 115,625 | $ 63,552 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 shares | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | Set forth below is a summary of the adoption, modification, and termination activity of our directors and executive officers with respect to Rule 10b5-1 trading plans during the three months ended June 30, 2024: Name & Title Adoption Date Termination Date Contract End Date Aggregate Shares Covered Dave Powers, Chief Executive Officer (1) September 8, 2023 April 15, 2024 (2) April 22, 2024 35,957 Stefano Caroti, Chief Commercial Officer (1) March 7, 2024 June 6, 2024 (2) August 31, 2024 5,000 Stefano Caroti, Chief Commercial Officer (1) June 7, 2024 * September 30, 2025 3,569 Steven Fasching, Chief Financial Officer June 4, 2024 * January 31, 2025 3,000 Anne Spangenberg, President, Fashion Lifestyle Group June 4, 2024 * June 1, 2025 2,781 Bonita Stewart, Director June 4, 2024 * May 29, 2025 2,250 Maha Ibrahim, Director June 6, 2024 * September 9, 2025 250 (1) As disclosed in Part I, Item 2 within this Quarterly Report, Mr. Powers retired as our Chief Executive Officer and President effective August 1, 2024, and Mr. Caroti succeeded Mr. Powers in these roles effective as of the same date. Mr. Powers is expected to continue to serve as a member of our Board, if elected by our stockholders at the Annual Meeting of Stockholders to be held on September 9, 2024. (2) This trading plan was terminated automatically prior to the contract end date upon the sale of all shares covered by the plan. *Not applicable. |
Non-Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Maha Ibrahim [Member] | |
Trading Arrangements, by Individual | |
Name | Maha Ibrahim |
Title | Director |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | June 6, 2024 |
Expiration Date | September 9, 2025 |
Arrangement Duration | 460 days |
Aggregate Available | 250 |
Anne Spangenberg [Member] | |
Trading Arrangements, by Individual | |
Name | Anne Spangenberg |
Title | President, Fashion Lifestyle Group |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | June 4, 2024 |
Expiration Date | June 1, 2025 |
Arrangement Duration | 362 days |
Aggregate Available | 2,781 |
Bonita Stewart [Member] | |
Trading Arrangements, by Individual | |
Name | Bonita Stewart |
Title | Director |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | June 4, 2024 |
Expiration Date | May 29, 2025 |
Arrangement Duration | 359 days |
Aggregate Available | 2,250 |
Steven Fasching [Member] | |
Trading Arrangements, by Individual | |
Name | Steven Fasching |
Title | Chief Financial Officer |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | June 4, 2024 |
Expiration Date | January 31, 2025 |
Arrangement Duration | 241 days |
Aggregate Available | 3,000 |
Dave Powers [Member] | |
Trading Arrangements, by Individual | |
Name | Dave Powers |
Title | Chief Executive Officer (1) |
Rule 10b5-1 Arrangement Terminated | true |
Termination Date | April 15, 2024 (2) |
Aggregate Available | 35,957 |
June 7 2024 Plan [Member] | Stefano Caroti [Member] | |
Trading Arrangements, by Individual | |
Name | Stefano Caroti |
Title | Chief Commercial Officer (1) |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | June 7, 2024 |
Expiration Date | September 30, 2025 |
Arrangement Duration | 480 days |
Aggregate Available | 3,569 |
March 7 2024 Plan [Member] | Stefano Caroti [Member] | |
Trading Arrangements, by Individual | |
Name | Stefano Caroti |
Title | Chief Commercial Officer (1) |
Rule 10b5-1 Arrangement Terminated | true |
Termination Date | June 6, 2024 (2) |
Aggregate Available | 5,000 |
General (Policies)
General (Policies) | 3 Months Ended |
Jun. 30, 2024 | |
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, 2024, and for the three months ended June 30, 2024 (the current period), and 2023 (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, 2024, 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, 2024 (prior fiscal year), which was filed with the SEC on May 24, 2024 (2024 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, 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 utilized to measure its operating lease assets and lease liabilities. |
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. Information reported to the 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, 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. 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements. The Financial Accounting Standards Board has issued Accounting Standards Updates (ASU) that have been adopted and not yet adopted by the Company as stated below. Recently Adopted. The following is a summary of a recently adopted ASU and its expected 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 of 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 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. This ASU did not have a material impact on the recognition, measurement, or presentation of supplier finance programs in the Company’s annual and interim consolidated financial statements. However, it did result in additional disclosure. 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. The Company plans to adopt the annual roll forward requirement beginning with its fiscal year (FY) ending March 31, 2025, and does not expect the adoption to have a material impact on its annual and interim consolidated financial statements. Not Yet Adopted. The following is a summary of each ASU that has been issued and is applicable to the Company, but which has not yet been adopted, as well as the planned period of adoption, and the expected impact on the Company upon adoption: Standard Description Planned Period of Adoption Expected Impact on Adoption ASU 2023-07 - Improvements to Reportable Segment Disclosures The ASU requires annual and interim disclosures of significant segment expenses, including an amount and composition description for other segment items, and how reported measures of profit or loss are used by the chief operating decision maker ( CODM ) in assessing segment performance and deciding how to allocate resources. The ASU is effective on a retrospective basis for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. Q4 FY 2025 and Q1 FY 2026 The Company is currently evaluating the impact of the adoption of this ASU on its annual and interim consolidated financial statements. ASU 2023-09 - Improvements to Income Tax Disclosures The ASU requires annual disclosures of prescribed standard categories for the components of the effective tax rate reconciliation, disclosure of income taxes paid disaggregated by jurisdiction, and other income-tax related disclosures. The ASU is effective on a prospective basis, with retrospective application permitted, for fiscal years beginning after December 15, 2024. Early adoption is permitted. Q4 FY 2026 The Company is currently evaluating the impact of the adoption of this ASU on its annual and interim consolidated financial statements. |
Revenue Recognition | Disaggregated Revenue. Refer to Note 9, “Reportable Operating Segments,” for further information on the Company’s disaggregation of revenue by reportable operating segment. Sales Return Asset and Liability. Sales returns are a refund asset for the right to recover the inventory and a refund liability for the stand-ready right of return. 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. Contract Liabilities. Contract liabilities are recorded in other accrued expenses in the condensed consolidated balance sheets and include loyalty programs and other deferred revenue. |
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 after-tax unrealized gains or losses from changes in fair value of Designated Derivative Contracts are recorded as a component of accumulated other comprehensive loss (AOCL) in the condensed consolidated balance sheets 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. Refer to Note 1, “General,” in the Company’s consolidated financial statements in Part IV of the 2024 Annual Report for further information regarding the Company’s derivative instruments accounting policy. |
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. Refer to Note 8, “Stock-Based Compensation,” in the Company’s consolidated financial statements in Part IV of the 2024 Annual Report for further information on the Company’s equity incentive plans. |
Cash and Cash Equivalents | Cash and Cash Equivalents. The Company maintains a portion of its cash in Federal Deposit Insurance Corporation insured bank deposit accounts which, at times, may exceed federally insured limits. To date, the Company has not experienced any losses in such accounts. Based on the size and strength of the banking institutions used, the Company does not believe it is exposed to any significant credit risks in cash. |
Supplier Finance Program | The Company has a voluntary SFP administered through a third-party platform that provides the Company’s independent manufacturers that supply its 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, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accounting Pronouncements Recently Adopted and Not Yet Adopted | The Financial Accounting Standards Board has issued Accounting Standards Updates (ASU) that have been adopted and not yet adopted by the Company as stated below. Recently Adopted. The following is a summary of a recently adopted ASU and its expected 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 of 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 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. This ASU did not have a material impact on the recognition, measurement, or presentation of supplier finance programs in the Company’s annual and interim consolidated financial statements. However, it did result in additional disclosure. 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. The Company plans to adopt the annual roll forward requirement beginning with its fiscal year (FY) ending March 31, 2025, and does not expect the adoption to have a material impact on its annual and interim consolidated financial statements. Not Yet Adopted. The following is a summary of each ASU that has been issued and is applicable to the Company, but which has not yet been adopted, as well as the planned period of adoption, and the expected impact on the Company upon adoption: Standard Description Planned Period of Adoption Expected Impact on Adoption ASU 2023-07 - Improvements to Reportable Segment Disclosures The ASU requires annual and interim disclosures of significant segment expenses, including an amount and composition description for other segment items, and how reported measures of profit or loss are used by the chief operating decision maker ( CODM ) in assessing segment performance and deciding how to allocate resources. The ASU is effective on a retrospective basis for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. Q4 FY 2025 and Q1 FY 2026 The Company is currently evaluating the impact of the adoption of this ASU on its annual and interim consolidated financial statements. ASU 2023-09 - Improvements to Income Tax Disclosures The ASU requires annual disclosures of prescribed standard categories for the components of the effective tax rate reconciliation, disclosure of income taxes paid disaggregated by jurisdiction, and other income-tax related disclosures. The ASU is effective on a prospective basis, with retrospective application permitted, for fiscal years beginning after December 15, 2024. Early adoption is permitted. Q4 FY 2026 The Company is currently evaluating the impact of the adoption of this ASU on its annual and interim consolidated financial statements. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Activity Related to Estimated Sales Returns, Loyalty Program Activity and Deferred Revenue | The following tables summarize changes in the estimated sales returns for the periods presented: Recovery Asset Refund Liability Balance, March 31, 2024 $ 13,866 $ (55,327) Net additions to sales return liability (1) 10,976 (40,741) Actual returns (14,077) 58,277 Balance, June 30, 2024 $ 10,765 $ (37,791) Recovery Asset Refund Liability Balance, March 31, 2023 $ 15,685 $ (45,322) Net additions to sales return liability (1) 8,387 (40,609) Actual returns (12,867) 49,373 Balance, June 30, 2023 $ 11,205 $ (36,558) (1) Net additions to the sales return liability include a provision for anticipated sales returns, which consists of both contractual return rights and discretionary authorized returns. Loyalty Programs. Activity related to loyalty programs was as follows: Three Months Ended June 30, 2024 2023 Beginning balance $ (17,586) $ (13,144) Redemptions and expirations for loyalty certificates and points recognized in net sales 5,060 4,728 Deferred revenue for loyalty points and certificates issued (4,575) (3,909) Ending balance $ (17,101) $ (12,325) Deferred Revenue. Activity related to deferred revenue was as follows: Three Months Ended June 30, 2024 2023 Beginning balance $ (9,591) $ (13,448) Additions of customer cash payments (27,101) (20,589) Revenue recognized 9,254 13,401 Ending balance $ (27,438) $ (20,636) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
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, 2024 Level 1 Level 2 Level 3 Assets: Cash equivalents: Money-market funds $ 1,079,101 $ 1,079,101 $ — $ — Other current assets: Designated Derivative Contracts asset 1,399 — 1,399 — Other assets: Non-qualified deferred compensation asset 14,480 14,480 — — Total assets measured at fair value $ 1,094,980 $ 1,093,581 $ 1,399 $ — As of Measured Using June 30, 2024 Level 1 Level 2 Level 3 Liabilities: Other accrued expenses: Non-qualified deferred compensation liability $ (412) $ (412) $ — $ — Designated Derivative Contracts liability (267) — (267) — Other long-term liabilities: Non-qualified deferred compensation liability (23,580) (23,580) — — Total liabilities measured at fair value $ (24,259) $ (23,992) $ (267) $ — As of Measured Using March 31, 2024 Level 1 Level 2 Level 3 Assets: Cash equivalents: Money-market funds $ 1,152,083 $ 1,152,083 $ — $ — Other assets: Non-qualified deferred compensation asset 13,553 13,553 — — Total assets measured at fair value $ 1,165,636 $ 1,165,636 $ — $ — Liabilities: Other accrued expenses: Non-qualified deferred compensation liability $ (408) $ (408) $ — $ — Other long-term liabilities: Non-qualified deferred compensation liability (16,229) (16,229) — — Total liabilities measured at fair value $ (16,637) $ (16,637) $ — $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
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, 2024 2023 Income tax expense $ 33,528 $ 17,812 Effective income tax rate 22.5 % 21.9 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
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, 2024 2023 Non-cash operating activities Operating lease assets obtained in exchange for lease liabilities (1) $ 12,336 $ 21,587 Reductions to operating lease assets for reductions to lease liabilities (1) (1,106) (65) (1) Amounts disclosed include non-cash additions or reductions resulting from lease remeasurements, as well as reductions for tenant improvement allowances. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | As of June 30, 2024, the Company has the following Designated Derivative Contracts recorded at fair value in the condensed consolidated balance sheets: Notional value $ 158,842 Fair value recorded in other current assets 1,399 Fair value recorded in other accrued expenses (267) |
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, 2024 2023 Gain recorded in OCI $ 1,132 $ 411 Reclassifications from AOCL into net sales — 21 Income tax expense in OCI (276) (80) Total $ 856 $ 352 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
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, 2024 2023 Total number of shares repurchased (1) 176,956 52,410 Average price per share paid $ 858.79 $ 485.95 Dollar value of shares repurchased (2) (3) $ 151,967 $ 25,469 (1) All share repurchases were made pursuant to the Company’s stock repurchase program in open-market transactions. (2) The dollar value of shares repurchased excludes the cost of broker commissions, excise taxes, and other costs. (3) May not calculate on rounded dollars. |
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, 2024 March 31, 2024 Unrealized gain on cash flow hedges $ 856 $ — Cumulative foreign currency translation loss (55,389) (50,733) Total $ (54,533) $ (50,733) |
Basic and Diluted Shares (Table
Basic and Diluted Shares (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
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, 2024 2023 Basic 25,478,000 26,165,000 Dilutive effect of equity awards 103,000 156,000 Diluted 25,581,000 26,321,000 Excluded Long-Term Incentive Plan Performance-Based Restricted Stock Units 48,000 76,000 Employee Stock Purchase Plan — 1,000 |
Reportable Operating Segments (
Reportable Operating Segments (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
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, 2024 2023 Net sales UGG brand wholesale $ 142,553 $ 121,545 HOKA brand wholesale 332,732 260,847 Teva brand wholesale 31,359 35,132 Sanuk brand wholesale 4,433 6,470 Other brands wholesale 3,705 1,427 Direct-to-Consumer 310,565 250,370 Total $ 825,347 $ 675,791 Three Months Ended June 30, 2024 2023 Income (loss) from operations UGG brand wholesale $ 38,430 $ 16,866 HOKA brand wholesale 124,694 86,524 Teva brand wholesale 6,789 9,237 Sanuk brand wholesale 1,603 759 Other brands wholesale (1,557) (2,041) Direct-to-Consumer 106,410 75,462 Unallocated overhead costs (143,562) (116,071) Total $ 132,807 $ 70,736 Assets allocated to each reportable operating segment, with a reconciliation to the condensed consolidated balance sheets, are as follows: June 30, 2024 March 31, 2024 Assets UGG brand wholesale $ 509,965 $ 247,136 HOKA brand wholesale 490,476 436,147 Teva brand wholesale 56,713 81,703 Sanuk brand wholesale 16,955 18,526 Other brands wholesale 24,973 9,379 Direct-to-Consumer 261,893 263,840 Total assets from reportable operating segments 1,360,975 1,056,731 Unallocated cash and cash equivalents 1,438,397 1,502,051 Unallocated deferred tax assets, net 71,613 72,584 Unallocated other corporate assets 435,234 504,213 Total $ 3,306,219 $ 3,135,579 |
Concentration of Business (Tabl
Concentration of Business (Tables) | 3 Months Ended |
Jun. 30, 2024 | |
Risks and Uncertainties [Abstract] | |
Schedule of Revenue Concentration of Risk | The Company sells its products globally to customers and consumers in various countries, with net sales concentrations as follows: Three Months Ended June 30, 2024 2023 International net sales $ 309,491 $ 256,256 % of net sales 37.5 % 37.9 % Net sales in foreign currencies $ 177,624 $ 148,971 % of net sales 21.5 % 22.0 % Ten largest global customers as % of net sales 23.6 % 22.8 % |
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, 2024 March 31, 2024 United States $ 273,741 $ 270,561 Foreign (1) 31,844 31,561 Total $ 305,585 $ 302,122 (1) 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, 2024, and March 31, 2024. |
General - Narrative (Details)
General - Narrative (Details) | 3 Months Ended |
Jun. 30, 2024 segment proprietaryBrand | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of proprietary brands | proprietaryBrand | 6 |
Number of reportable segments | segment | 6 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Recovery Asset | ||
Beginning balance | $ 13,866 | $ 15,685 |
Net additions to sales return liability | 10,976 | 8,387 |
Actual returns | (14,077) | (12,867) |
Ending balance | 10,765 | 11,205 |
Refund Liability | ||
Beginning balance | (55,327) | (45,322) |
Net additions to sales return liability | (40,741) | (40,609) |
Actual returns | 58,277 | 49,373 |
Ending balance | $ (37,791) | $ (36,558) |
Revenue Recognition - Loyalty P
Revenue Recognition - Loyalty Programs (Details) - Loyalty Programs - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Contract with Customer, Loyalty Program [Roll Forward] | ||
Beginning balance | $ (17,586) | $ (13,144) |
Redemptions and expirations for loyalty certificates and points recognized in net sales | 5,060 | 4,728 |
Deferred revenue for loyalty points and certificates issued | (4,575) | (3,909) |
Ending balance | $ (17,101) | $ (12,325) |
Revenue Recognition - Deferred
Revenue Recognition - Deferred Revenue (Details) - Wholesale - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Contract With Customer, Liability [Roll Forward] | ||
Beginning balance | $ (9,591) | $ (13,448) |
Additions of customer cash payments | (27,101) | (20,589) |
Revenue recognized | 9,254 | 13,401 |
Ending balance | $ (27,438) | $ (20,636) |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money-market funds | $ 1,079,101 | $ 1,152,083 |
Designated Derivative Contracts asset | 1,399 | |
Non-qualified deferred compensation asset | 14,480 | 13,553 |
Total assets measured at fair value | 1,094,980 | 1,165,636 |
Non-qualified deferred compensation liability | (412) | (408) |
Designated Derivative Contracts liability | (267) | |
Non-qualified deferred compensation liability | (23,580) | (16,229) |
Total liabilities measured at fair value | (24,259) | (16,637) |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money-market funds | 1,079,101 | 1,152,083 |
Designated Derivative Contracts asset | 0 | |
Non-qualified deferred compensation asset | 14,480 | 13,553 |
Total assets measured at fair value | 1,093,581 | 1,165,636 |
Non-qualified deferred compensation liability | (412) | (408) |
Designated Derivative Contracts liability | 0 | |
Non-qualified deferred compensation liability | (23,580) | (16,229) |
Total liabilities measured at fair value | (23,992) | (16,637) |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money-market funds | 0 | 0 |
Designated Derivative Contracts asset | 1,399 | |
Non-qualified deferred compensation asset | 0 | 0 |
Total assets measured at fair value | 1,399 | 0 |
Non-qualified deferred compensation liability | 0 | 0 |
Designated Derivative Contracts liability | (267) | |
Non-qualified deferred compensation liability | 0 | 0 |
Total liabilities measured at fair value | (267) | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money-market funds | 0 | 0 |
Designated Derivative Contracts asset | 0 | |
Non-qualified deferred compensation asset | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Non-qualified deferred compensation liability | 0 | 0 |
Designated Derivative Contracts liability | 0 | |
Non-qualified deferred compensation liability | 0 | 0 |
Total liabilities measured at fair value | $ 0 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 33,528 | $ 17,812 |
Effective income tax rate | 22.50% | 21.90% |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Supplemental Lease Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease assets obtained in exchange for lease liabilities | $ 12,336 | $ 21,587 |
Reductions to operating lease assets for reductions to lease liabilities | $ (1,106) | $ (65) |
Commitments and Contingencies_2
Commitments and Contingencies - Narrative (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Aggregated estimated obligation | $ 15,289 |
Derivative Instruments (Details
Derivative Instruments (Details) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2024 USD ($) counterparty | Jun. 30, 2023 USD ($) | Mar. 31, 2024 USD ($) | |
Foreign currency exchange contracts and hedging | |||
Notional value | $ 158,842 | $ 0 | |
Fair value recorded in other current assets | 1,399 | ||
Fair value recorded in other accrued expenses | $ (267) | ||
Number of counterparties in derivative contracts | counterparty | 4 | ||
Maturity period (in months) | 9 months | ||
Gain recorded in OCI | $ 1,132 | $ 411 | |
Reclassifications from AOCL into net sales | 0 | 21 | |
Income tax expense in OCI | (276) | (80) | |
Unrealized gain on cash flow hedges | $ 856 | $ 352 | |
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 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Jul. 11, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | |
Equity, Class of Treasury Stock [Line Items] | |||
Dollar value of shares that may yet be repurchased, excluding excise taxes | $ 789,737 | ||
Shares repurchased (in shares) | 176,956 | 52,410 | |
Average price per share paid (in dollars per share) | $ 858.79 | $ 485.95 | |
Dollar value of shares repurchased | $ 151,967 | $ 25,469 | |
Subsequent Event | |||
Equity, Class of Treasury Stock [Line Items] | |||
Dollar value of shares that may yet be repurchased, excluding excise taxes | $ 773,743 | ||
Shares repurchased (in shares) | 17,307 | ||
Average price per share paid (in dollars per share) | $ 924.11 | ||
Dollar value of shares repurchased | $ 15,994 |
Stockholders' Equity - Stock Re
Stockholders' Equity - Stock Repurchase Programs (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Stockholders' Equity Note [Abstract] | ||
Total number of shares repurchased (in shares) | 176,956 | 52,410 |
Average price per share paid (in dollars per share) | $ 858.79 | $ 485.95 |
Dollar value of shares repurchased | $ 151,967 | $ 25,469 |
Stockholders' Equity - Accumula
Stockholders' Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 |
Stockholders' Equity Note [Abstract] | ||
Unrealized gain on cash flow hedges | $ 856 | $ 0 |
Cumulative foreign currency translation loss | (55,389) | (50,733) |
Total | $ (54,533) | $ (50,733) |
Basic and Diluted Shares (Detai
Basic and Diluted Shares (Details) - shares | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Basic (in shares) | 25,478,000 | 26,165,000 |
Dilutive effect of equity awards (in shares) | 103,000 | 156,000 |
Diluted (in shares) | 25,581,000 | 26,321,000 |
Long-Term Incentive Plan Performance-Based Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 48,000 | 76,000 |
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) | 0 | 1,000 |
Reportable Operating Segments_2
Reportable Operating Segments (Details) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2024 USD ($) segment | Jun. 30, 2023 USD ($) | Mar. 31, 2024 USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | segment | 6 | ||
Net sales | $ 825,347 | $ 675,791 | |
Income (loss) from operations | 132,807 | 70,736 | |
Assets | 3,306,219 | $ 3,135,579 | |
Unallocated cash and cash equivalents | 1,438,397 | 1,502,051 | |
Unallocated deferred tax assets, net | 71,613 | 72,584 | |
Reportable segments | |||
Segment Reporting Information [Line Items] | |||
Assets | 1,360,975 | 1,056,731 | |
Reportable segments | UGG brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Assets | 509,965 | 247,136 | |
Reportable segments | HOKA brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Assets | 490,476 | 436,147 | |
Reportable segments | Teva brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Assets | 56,713 | 81,703 | |
Reportable segments | Sanuk brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Assets | 16,955 | 18,526 | |
Reportable segments | Other brands wholesale | |||
Segment Reporting Information [Line Items] | |||
Assets | 24,973 | 9,379 | |
Reportable segments | Direct-to-Consumer | |||
Segment Reporting Information [Line Items] | |||
Assets | 261,893 | 263,840 | |
Segment reconciling items | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | (143,562) | (116,071) | |
Unallocated cash and cash equivalents | 1,438,397 | 1,502,051 | |
Unallocated deferred tax assets, net | 71,613 | 72,584 | |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Unallocated other corporate assets | 435,234 | $ 504,213 | |
Wholesale | UGG brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Net sales | 142,553 | 121,545 | |
Wholesale | HOKA brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Net sales | 332,732 | 260,847 | |
Wholesale | Teva brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Net sales | 31,359 | 35,132 | |
Wholesale | Sanuk brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Net sales | 4,433 | 6,470 | |
Wholesale | Other brands wholesale | |||
Segment Reporting Information [Line Items] | |||
Net sales | 3,705 | 1,427 | |
Wholesale | Reportable segments | UGG brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | 38,430 | 16,866 | |
Wholesale | Reportable segments | HOKA brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | 124,694 | 86,524 | |
Wholesale | Reportable segments | Teva brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | 6,789 | 9,237 | |
Wholesale | Reportable segments | Sanuk brand wholesale | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | 1,603 | 759 | |
Wholesale | Reportable segments | Other brands wholesale | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | (1,557) | (2,041) | |
Direct-to-Consumer | Direct-to-Consumer | |||
Segment Reporting Information [Line Items] | |||
Net sales | 310,565 | 250,370 | |
Direct-to-Consumer | Reportable segments | Direct-to-Consumer | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | $ 106,410 | $ 75,462 |
Concentration of Business (Deta
Concentration of Business (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | Mar. 31, 2024 | |
Concentration Risk [Line Items] | |||
Net sales | $ 825,347 | $ 675,791 | |
Long-lived assets | $ 305,585 | $ 302,122 | |
Sales Revenue, Net | Customer Concentration Risk | 10 Largest Customers | |||
Concentration Risk [Line Items] | |||
Concentration risk | 23.60% | 22.80% | |
Trade Accounts Receivable | Customer Concentration Risk | Two Customers | |||
Concentration Risk [Line Items] | |||
Concentration risk | 23.50% | 31.20% | |
Foreign | |||
Concentration Risk [Line Items] | |||
Long-lived assets | $ 31,844 | $ 31,561 | |
Foreign | International net sales | |||
Concentration Risk [Line Items] | |||
Net sales | 309,491 | $ 256,256 | |
Foreign | Net sales in foreign currencies | |||
Concentration Risk [Line Items] | |||
Net sales | $ 177,624 | $ 148,971 | |
Foreign | Sales Revenue, Net | International net sales | |||
Concentration Risk [Line Items] | |||
Concentration risk | 37.50% | 37.90% | |
Foreign | Sales Revenue, Net | Net sales in foreign currencies | |||
Concentration Risk [Line Items] | |||
Concentration risk | 21.50% | 22% | |
United States | |||
Concentration Risk [Line Items] | |||
Long-lived assets | $ 273,741 | $ 270,561 |
Supplier Finance Program (Detai
Supplier Finance Program (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Mar. 31, 2024 |
Payables and Accruals [Abstract] | ||
Supplier finance programs, current portion | $ 8,571 | $ 3,483 |