Deckers Outdoor (DECK) 10-K risk factor changes: FY2020 vs FY2019

[removed: Our] [added: *Our] short and long-term success is subject to numerous risks and uncertainties, many of which involve factors that are difficult to predict or beyond our control.

Before deciding to purchase, hold or sell our common stock, [removed: stockholders] [added: stockholders,] and potential stockholders should carefully consider the risks and uncertainties described below, in addition to the other information contained in or incorporated by reference into [removed: this Annual Report,] [added: this* *Annual Report,] as well as the other information we file with the SEC.

If any of these risks are realized, our business, financial condition, results of [removed: operations] [added: operations,] and prospects could be materially and adversely affected.

Furthermore, additional risks and uncertainties of which we are currently unaware, or which we currently consider to be immaterial, could have a material adverse effect on our [removed: business.][added: business.*]

[removed: Certain] [added: *Certain] statements made in this section constitute “forward-looking [removed: statements”,] [added: statements,”] which are subject to numerous risks and uncertainties including those described in this section.

Refer to the section entitled “Cautionary Note Regarding Forward-Looking Statements” within this Annual Report for additional [removed: information.][added: information.*]

[removed: Many] [added: Many] of our products are inherently seasonal, and the sales of our products are highly sensitive to weather conditions, which makes it difficult to anticipate consumer demand for our products, manage our expenses, and forecast our financial [removed: results.][added: results.]

Due to the [removed: size] [added: magnitude] of the UGG brand relative to our other brands, this trend has resulted in our net sales for the second and third fiscal quarters significantly exceeding our net sales in the first and fourth fiscal quarters.

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

The footwear, [removed: apparel] [added: apparel,] and accessories industry is subject to rapid changes in consumer preferences and tastes, which make it difficult to anticipate demand for our products and forecast our financial results.

| • | legislation restricting our ability to use certain materials in our products; [removed: and] |

| • | changes in general economic, [removed: political] [added: political,] and market [removed: conditions.] [added: conditions; and] |

Consumer demand for our products depends in part on the continued strength of our brands, which in turn depends on our ability to anticipate, understand and promptly respond to the rapidly changing preferences and fashion tastes [removed: of] [added: for] footwear, [removed: apparel] [added: apparel,] and [removed: accessories consumers.][added: accessories, as well as consumer spending patterns.]

[added: Furthermore,] we are dependent on consumer receptivity to our new products and to the marketing strategies we employ to promote those products.

Consumers may not purchase new models and styles of footwear, [removed: apparel] [added: apparel,] and accessories in the quantities projected or at all.

If we fail to predict or react appropriately to changes in consumer preferences and fashion [removed: trends,] [added: trends or fail to adapt to shifting spending patterns or demand,] consumers may consider our brands and products to be outdated or [added: unattainable or] associate our brands and products with styles that are no longer popular, which may adversely affect our overall financial performance.

In addition, negative claims or publicity regarding us, our products, our brands, our marketing [removed: campaigns] [added: campaigns,] or our celebrity endorsers, could adversely affect our reputation and sales regardless of whether such claims are accurate.

[removed: If] [added: If] we are unable to sustain the cost reductions and profitability improvements achieved from the implementation of our restructuring and operating profit improvement plans, we may not achieve [removed: operating] results [added: of operations] in line with our expectations, which could cause our stock price to [removed: decline.][added: decline.]

[removed: We] [added: As of March 31, 2019, we completed implementing a restructuring plan designed to reduce overhead costs and create operating efficiencies while improving collaboration across our brands, and] also [removed: implemented] [added: completed the implementation of] an operating profit improvement plan designed to improve profitability by enhancing product development cycle times, optimizing material yields, consolidating our factory base, and relocating product manufacturing and distribution facilities.

However, we may not be able to sustain the cost reductions, profitability [removed: improvements] [added: improvements,] or other expected benefits of these plans in future periods.

[removed: We] [added: We] face intense competition from both established companies and newer entrants into the market, and our failure to compete effectively could cause our market share to decline, which could harm our reputation and have a material adverse impact on our financial condition and results of [removed: operations.][added: operations.]

The footwear, [removed: apparel] [added: apparel,] and accessories industry is highly competitive, and subject to changing consumer preferences and tastes, we expect to continue to face intense competitive pressures.

A number of our larger competitors have significantly greater financial, technological, engineering, manufacturing, marketing, and distribution resources than we do, as well as greater brand awareness in the footwear, [removed: apparel] [added: apparel,] and accessories markets among consumers and other market participants.

Our competitors’ greater resources and capabilities in these areas may enable them to more effectively compete on the basis of price and production, develop new products more quickly, develop products with superior technical capabilities, market their products and brands more successfully, identify or influence consumer preferences, withstand the impacts of seasonality, and manage periodic downturns in the footwear, [removed: apparel] [added: apparel,] and accessories industry or in economic conditions generally.

[removed: We] [added: We] use sheepskin to manufacture a significant portion of our products, and if we are unable to obtain a sufficient quantity of sheepskin at acceptable prices that meets our quality expectations, or if there are legal or social impediments to our ability to use sheepskin, it could have a material adverse impact on our [removed: business.][added: business.]

Any factors that increase the demand for, or decrease the supply of, sheepskin could cause significant increases in the price of sheepskin, which would increase our manufacturing costs and reduce our gross [removed: profits.][added: margins.]

In an effort to partially reduce our dependency on sheepskin, we [removed: began] [added: are] using UGGpure, which is a wool woven into a durable backing, in some of our UGG brand products.

[added: However, in] the event of a prolonged increase in sheepskin prices such as what we have experienced in the past, these strategies may not be sufficient to offset the negative impact on our results of operations.

In that event, it is unlikely we would be able to adjust our product prices sufficiently to eliminate the impact on our gross [removed: profits] [added: margins] and our financial results may suffer.

Because sheepskin is currently used to manufacture a significant portion of our UGG brand products, any legal or social impediments to the sale of products that include sheepskin, especially within our large target markets, could have a material adverse impact on our business, financial [removed: condition] [added: condition,] and results of operations.

[removed: If] [added: If] we are unsuccessful at improving our operational systems and our efforts do not result in the anticipated benefits to us or result in unanticipated disruption to our business, our financial condition and [removed: operating] results [added: of operations] could be adversely affected, and our business may become less [removed: competitive.][added: competitive.]

If our operational system upgrades and improvements are not successful, our financial condition and [removed: operating] results [added: of operations] could be adversely affected, and our business may become less competitive.

If we are unable to successfully manage any disruption to our business caused by our operational systems upgrades, we could incur unanticipated expenses, loss of [removed: customers] [added: customers,] and harm to our reputation, any of which would harm our business.

[removed: If] [added: If] we are unsuccessful at managing product manufacturing decisions, which are required to be made months in advance of the purchase of our products, we may be unable to accurately forecast our inventory and working capital requirements, which may have a material adverse impact on our financial condition and [removed: operating results.][added: results of operations.]

| • | changes in consumer preferences and tastes, [added: discretionary spending,] as well as prevailing fashion trends; |

| • | the competitive environment, including pricing pressure resulting from reduced pricing of competitive products, which may cause consumers to shift their purchasing decisions away from our products; [removed: and] |

In either event, these factors could have a material adverse impact on our financial condition and [removed: operating results.][added: results of operations.]

[removed: It] [added: It] may be difficult to identify new retail store locations that meet our requirements, and any new retail stores may not realize returns on our [removed: investments.][added: investments.]

We expect to increase both the number of third parties we engage within our partner retail program and the number of stores that they [removed: operate.][added: operate, but these efforts may be delayed in light of retail store closures, work stoppages, and other disruptions due to the COVID-19 pandemic.]

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

The COVID-19 global pandemic has had, and other public health crises or epidemics could in the future have, a material adverse impact on our business, operations, liquidity, financial condition, results of operations, the operations of our customers and business partners, and the markets and communities in which we and our customers and partners operate.

The COVID-19 pandemic has had, and other public health crises or epidemics in the future could have, repercussions across local, regional, and global economies and financial markets.

The outbreak of COVID-19 has significantly adversely impacted global economic activity and contributed to volatility in and negative pressure on financial markets.

In response to the COVID-19 pandemic, many federal, state, local, and foreign governments have put in place, and others in the future may put in place, travel restrictions, quarantines, shelter-in-place orders, and similar government orders and restrictions, in an attempt to control the spread and mitigate the impact of the disease.

Such restrictions or orders, or the perception that such restrictions or orders could be implemented or extended, have resulted in business closures, work stoppages, slowdowns and delays, work-from-home policies, and cancellation or postponement of events, among other effects that could negatively impact our operations, as well as the operations of our partner retail stores, wholesale customers, suppliers, third-party distributors, and manufacturers.

The COVID-19 pandemic has resulted in a significant decrease in discretionary spending and retail activity, rapid rise in unemployment, and a sudden decrease in global economic activity, and many businesses, including our Company, have experienced, and anticipate that they will continue to experience, a significant negative impact on their financial condition, results of operations, and liquidity.

For example, during portions of our fourth fiscal quarter ended March 31, 2020, and during the first part of our first fiscal quarter ending June 30, 2020, nearly all of our Company-operated stores, our partner retail stores, and the retail stores of our wholesale customers were closed as a result of government orders or restrictions, and may remain closed in certain geographies in future periods.

In response to such store closures, as well as the social distancing measures and other restrictions resulting from the pandemic, we have temporarily furloughed certain retail store employees while stores are closed and transitioned nearly all of our other employees able to work remotely to a remote work environment.

Although we have not experienced a material impact on productivity from shifting our employees to a remote work environment, there is no guarantee that our employees will be as effective while working remotely.

In addition, despite the implementation of reasonable security measures by us and our third-party providers, our systems and information may be more susceptible to cyber-attacks or data security incidents with significantly more of our work force working remotely.

Furthermore, in an effort to manage the financial uncertainty involved with the COVID-19 pandemic, we have delayed the hiring of certain non-essential employees, which may have the impact of delaying the completion of certain projects or other strategic objectives.

In addition, the demand for our products, as well as our results of operations, have been and could continue to be adversely impacted due to a number of other factors, including the following:

| • | reduced consumer demand for our products as consumers seek to reduce or delay spending in response to the impacts of COVID-19, including from the recent rise in unemployment rates, decreased discretionary spending, and diminished consumer confidence; |

| • | decreased store traffic as a result of retail store closures, social distancing restrictions or changes in consumer behavior; |

| • | a deterioration in our ability, or the ability of our wholesale customers, to operate in affected geographic regions; |

| • | reduced availability of our supply of raw materials; |

| • | the failure of key business partners to provide services, including the inability of our manufacturers or third-party distributors to timely fulfill their obligations to us; |

| • | bankruptcies or other financial difficulties facing our wholesale customers, which could cause them to be unable to make or delay making payments to us, or resulting in cancellation of or reducing their orders; |

| • | seasonality impacts on the demand for certain products, which could be further exacerbated by government restrictions and changes in consumer behavior; |

| • | the ability of our distribution center and 3PLs to timely and accurately process orders, especially during periods of heightened demand; and |

| • | incremental costs resulting from adoption of preventative measures, including social distancing requirements. |

The full extent of the impact of the COVID-19 pandemic on our business and operations is highly uncertain and subject to change, and will depend on a number of factors beyond our control, including, without limitation, the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, the impact of the pandemic on the businesses of our wholesale customers, suppliers, third-party distributors, manufacturers, or retail partner stores, the extent and duration of any economic recessionary conditions, and the impact on the financial markets and our access to capital.

We expect any further spread of the COVID-19 pandemic (including the potential for a second wave of the disease), or even the threat or perception that this could occur, or any protracted duration of decreased economic activity, could have a material adverse impact on our business, operations and financial results, or on the business, operations and financial results of our customers and business partners.

In addition, to the extent the duration of the pandemic results in negative impacts to our business during our peak selling season for the UGG brand, it could result in a significantly greater adverse effect on our financial condition and results of operations than we have experienced thus far.

It is unclear whether seasonal impacts will be minimized or exaggerated in future periods as a result of the disruptions and uncertainties caused by the COVID-19 pandemic.

| • | pandemics or other outbreaks of illness or disease, such as the COVID-19 pandemic. |

Further, consumer spending may be adversely impacted by economic conditions, including consumer confidence in the economy, employment, salary and wage levels, the availability of consumer credit, and general costs of living.

For example, we are experiencing, and could continue to experience, decreased demand for our products arising out of the impacts of the COVID-19 pandemic.

General economic and market conditions, including the impacts and disruptions caused by the COVID-19 pandemic, could impact our revenue and increase our costs and operating expenses.

Furthermore, the disruptions and impacts caused by the COVID-19 pandemic may ultimately require us to reduce, potentially by a significant margin, our opportunities in certain markets, which could negatively impact our prospects for long-term growth.

Furthermore, the significant disruptions caused by the COVID-19 global pandemic, especially in certain countries in Asia, could have a prolonged negative impact on our ability to source sufficient sheepskin from our tanneries to meet demand, which could damage our brand image and adversely impact our sales.

These difficulties could be exacerbated by the impacts of the COVID-19 pandemic as our employees are faced with challenges of adapting to new processes and systems while working remotely.

| • | delays in resource or product availability due to impacts from widespread illness or disease, including the COVID-19 pandemic; and |

We will continue to evaluate our retail store fleet strategy in response to changes in consumer demand and retail store traffic patterns.

These trends have been further impacted by the COVID-19 pandemic.

As a result of marketplace uncertainty and competitive environment, a key customer may dispose of their excess inventories to consumers or unauthorized sellers at significantly reduced prices, which may put pressure on us to reduce the pricing of our products in order to compete, or cause consumers to shift their purchasing decisions away from our authorized sellers entirely.

Such efforts may be mitigated or suspended as we navigate the impacts of the COVID-19 pandemic and implement prudent cost-saving measures.

In addition, in an effort to manage the financial uncertainty involved with the COVID-19 pandemic, we have delayed the hiring of certain non-essential employees, which could have the impact of delaying completion of certain projects or other strategic objectives.

Lastly, in an effort to protect the health and safety of our employees during the COVID-19 pandemic, we have transitioned most employees (except for retail store and distribution center employees) to a remote work environment.

Although we have not experienced a material impact from shifting our employees to a remote work environment, there is no guarantee that our employees will be as effective while working remotely due to a number of factors, including the inability of team members to communicate as effectively in a remote environment, the reality that employees may have additional personal needs to attend to (such as looking after children as a result of school closures or family members who become sick), and employees may become sick themselves and unable to work.

Furthermore,

We implemented a restructuring plan designed to reduce overhead costs and create operating efficiencies while improving collaboration across our brands.

However, in

the rapidly changing retail environment.

Further, in order to continue to develop new products and successfully operate and grow

While we continue to operate our distribution center in Camarillo, we are currently working to move all of our Camarillo distribution operations to our Moreno Valley location.

Once the migration of our distribution center operations is complete, we will be closing our Camarillo distribution center.

We anticipate this closure to be completed in the first half of fiscal year 2020.

inaccuracies.

Brexit in Europe is undergoing a lengthy and contentious negotiation between the EU and the UK.

To date, the US has, in stages, imposed tariffs on $250 billion of imports from China on top of existing tariff rates.

Thus far, the footwear products we source in China have not been subjected to such increased tariffs.

However, in May 2019, the US Trade Representative announced that all remaining US imports from China could be subject to punitive duties between 10%

to 25% of import duties, including all footwear, apparel and accessories that we import from China.

Whether those threatened tariffs will be issued, and if so, what tariff would be assigned is unknown.

In addition, any significant litigation, investigation, or proceeding, regardless of its merits,

[removed: Overview][added: Overview]

We are a global leader in designing, marketing, and distributing innovative footwear, [removed: apparel] [added: apparel,] and accessories developed for both everyday casual lifestyle use and high-performance activities.

We believe that our products are distinctive and appeal broadly to women, [removed: men] [added: men,] and children.

We sell our products through quality domestic and international retailers, international distributors, and directly to our consumers both domestically and internationally through our [removed: Direct-to-Consumer (DTC)] [added: DTC] business, which is comprised of our retail stores and [removed: E-Commerce] [added: e-commerce] websites.

During February 2016, we announced the implementation of a multi-year restructuring plan [removed: which was] designed to realign our brands across our Fashion Lifestyle and Performance Lifestyle groups, optimize our worldwide owned retail store fleet, and consolidate our management and [removed: operations.][added: operations that was designed to reduce overhead costs and create operating efficiencies while improving collaboration across brands.]

[removed: The] [added: In addition, the] cumulative annualized [removed: selling, general, and administrative (SG&A) expense] [added: SG&A] savings [removed: by applicable reportable operating segment,] realized as of March 31, [removed: 2019, are approximately] [added: 2019 by reportable operating segment were, approximately,] as follows:

| | [removed: Amount] [added: Amount] | | |

| [removed: Total] [added: Total] | [removed: $] [added: $] | [removed: 63,000] [added: 63,000] | |

| | [removed: Years] [added: Years] Ended March [removed: 31,] [added: 31,] | | | | | | | | | | | | [removed: Cumulative Restructuring Charges] | | | [added: | | | | |]

Refer to Note [removed: 1, “General,” under the heading “Restructuring Plan”] [added: 8, “Stock-Based Compensation,”] of our consolidated financial statements in Part IV within this Annual Report for further information on our [removed: remaining accrued liabilities under our restructuring plan.][added: performance-based stock compensation.]

[added: Completed] Operating Profit Improvement [removed: Plan.][added: Plan]

During February 2017, we announced [removed: that, in addition to continuing to execute on our restructuring plan,] [added: that] we would implement [added: an operating profit improvement plan to execute] various business transformation initiatives to further reduce expenses and improve gross [removed: margins, the projected combined impact of which was expected to be approximately $100,000 of net annualized operating profit improvement by the end of the fiscal year ending March 31, 2020.][added: margins.]

As of March 31, 2019, we [removed: have] successfully completed our plan and achieved in excess of $100,000 of [added: combined] net annualized operating profit improvement under [removed: both] our restructuring and operating profit improvement plans.

We will continue to apply the lessons learned in our completed plans by pursuing opportunities to [added: further] optimize profitability and seeking to enhance [removed: operating] results [added: of operations] throughout our business.

[removed: Trends] [added: Trends and Uncertainties] Impacting [removed: our Overall Business][added: Our Business]

Our business and the industry in which we operate continue to be impacted by several important [removed: trends:][added: trends and uncertainties, including as a result of the COVID-19 pandemic.]

[removed: | • | In light of the shift in consumer shopping behavior, and our ongoing efforts to enhance our operating results, we are seeking to optimize our retail store footprint. While we expect to identify additional retail stores for closure, we may simultaneously identify opportunities to open new retail stores in the future.] We currently do not anticipate incurring material incremental retail store closure costs, primarily because any store closures we may pursue are expected to occur as retail store leases expire to avoid incurring potentially significant lease termination costs, as well as through conversions to partner retail [removed: stores. |][added: stores, further discussed below.]

[removed: Reportable] [added: Reportable] Operating Segment [removed: Overview][added: Overview]

Our six reportable operating segments [removed: now] include the worldwide wholesale operations of the UGG brand, HOKA brand, Teva brand, Sanuk brand, and Other brands, as well as DTC.

[added: UGG Brand.] The UGG brand is one of the most iconic and recognized brands in our [removed: industry] [added: industry,] which highlights our successful track record of building niche brands into lifestyle and fashion market leaders.

With loyal consumers around the world, the UGG brand has proven to be a highly resilient line of premium footwear, apparel, and accessories with expanded product offerings and a growing global audience that [removed: attracts] [added: appeals to] women, men, and children.

| • | High consumer brand loyalty due to [removed: consistently delivering] [added: the consistent delivery of] quality and luxuriously comfortable footwear, apparel, and accessories. |

[added: HOKA Brand.] The HOKA brand is an authentic premium line of year-round performance footwear and apparel that offers enhanced cushioning and inherent stability with minimal [removed: weight, originally designed for ultra-runners, and now appeals to athletes around the world, regardless of activity.][added: weight.]

The HOKA brand is quickly becoming a leading brand within [removed: the] [added: run] specialty [removed: community] [added: wholesale accounts,] with strong marketing fueling both domestic and international sales growth.

[added: Teva Brand.] The Teva brand, which pioneered the sport sandal category, is born from the outdoors and rooted in adventure.

The Teva brand’s product [removed: line includes] [added: offerings include] sandals, shoes, and boots.

[added: Sanuk Brand.] The Sanuk brand originated in Southern California surf culture and has emerged into a lifestyle brand with a presence in the relaxed casual shoe and sandal categories.

[added: Other Brands.] Other brands currently [removed: consists] [added: consist] of the Koolaburra by UGG [removed: brand, as well as other] [added: brand and a] discontinued [removed: brands] [added: brand] during the prior [removed: periods] [added: period] presented.

The Koolaburra brand is a casual footwear fashion line using sheepskin and other plush [removed: materials, sold through our wholesale channel] [added: materials] and is intended to target the value-oriented consumer in order to complement [removed: our] [added: the] UGG brand offering.

[added: Direct-to-Consumer.] Our DTC business [added: for all our brands] is comprised of our retail stores and [removed: E-Commerce] [added: e-commerce] websites which, in an [removed: Omni-Channel] [added: omni-channel] marketplace, are intertwined and interdependent.

We believe many of our consumers interact with both our retail stores and [removed: our] websites before making purchasing decisions.

[added: *Retail Business.*] Our retail stores are predominantly UGG brand concept stores and UGG brand outlet stores.

As of March 31, [removed: 2019,] [added: 2020,] we had a total of [removed: 156 company-owned] [added: 145] global retail stores, which includes [removed: 88] [added: 76] concept stores and [removed: 68] [added: 69] outlet stores.

Generally, we open retail store locations during the second or third quarters of each fiscal year and consider closures of retail stores during the third or fourth [removed: quarter] [added: quarters] of each fiscal year.

[added: *Flagship Stores.*] Included in the total count of [removed: retail] [added: global concept] stores [removed: worldwide] are nine UGG brand flagship stores, which are lead concept stores in [removed: our retail channel.][added: certain key markets and prominent locations designed to showcase the UGG brand products.]

[removed: These] [added: Primarily located in major tourist locations, these] stores are typically larger [removed: and have] [added: with] broader product offerings and greater traffic than our general concept [removed: stores as they are primarily located in major tourist areas.][added: stores.]

[added: *Shop-in-Shop Stores.*] Included in the total count of [removed: retail] [added: global concept] stores [removed: worldwide] are [removed: concession] [added: 21 shop-in-shop (SIS)] stores, defined as concept stores [added: for which we own the inventory and] that are operated by us [added: or non-employees] within a department [removed: or other] store, which we lease from the store owner by paying a percentage of [removed: concession] [added: SIS] store sales.

[removed: In certain international markets, such as China, we rely on partner] [added: Partner] retail [removed: stores, which] [added: stores] are branded stores that are wholly-owned and operated by [removed: third parties] [added: third-parties] and not included in the total count of [removed: worldwide company-owned] [added: global] retail stores.

When a partner retail store is opened, or a store is converted into a partner retail store, the [removed: store becomes wholly-owned and operated by third parties and] related net sales are recorded in [removed: our] [added: either the] UGG brand or Sanuk brand wholesale reportable operating segments, as applicable.

[added: *E-Commerce Business.*] Our [removed: E-Commerce] [added: e-commerce] business provides us with an opportunity to communicate a consistent brand message to consumers that is in line with our brands’ promises, drives awareness of key brand initiatives, offers targeted information to specific consumer demographics, and drives consumers to our retail stores.

This discussion includes an analysis of our financial condition and results of operations for fiscal year 2020 and fiscal year 2019 and year-over-year comparisons between those periods.

For year-over-year comparisons between fiscal year 2019 and fiscal year 2018, refer to Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2019 filed with the SEC on May 30, 2019.

During early calendar year 2020, the COVID-19 pandemic (referred to herein as COVID-19 or the COVID-19 pandemic) spread globally, including throughout the geographic regions in which we operate our business, and where our wholesale customers, retail stores, manufacturers, and suppliers are located.

In response to the pandemic, many federal, state, local, and foreign governments have put in place, and others in the future may put in place, travel restrictions, “shelter-in-place” orders, and similar government orders and restrictions in an attempt to control the spread and mitigate the impact of the disease.

Such restrictions or orders have resulted in the mandatory closure of “non-essential” businesses (including retail stores), increased unemployment rates, “social distancing” restrictions, reduced tourist activity, work-from-home policies, and other changes that have led to significant disruptions to businesses and global financial markets.

The overall impact of the pandemic on our business and future results of operations is highly uncertain and subject to change, and we are not able to accurately predict the magnitude or scope of such impacts at this time.

We have experienced a number of material impacts, and identified a number of material trends, within our business as follows:

Retail Environment

| • | In connection with the “shelter-in-place” orders discussed above, all of our Company-owned and operated stores, and nearly all of the retail stores of our wholesale customers and retail partners, were closed for a portion of our fourth fiscal quarter ended March 31, 2020 (fourth fiscal quarter), and largely remain closed during the first part of our first fiscal quarter ending June 30, 2020. The closure of these retail stores had a negative impact on our results of operations during the fourth fiscal quarter as we experienced delays in shipment and acceptance of scheduled order shipments, which we attribute to the retail store closures and other uncertainties caused by the COVID-19 pandemic. |

| • | The retail stores that we and our partners operate have begun to reopen at a measured pace. We will continue to reopen our retail stores as we determine appropriate and in line with guidance provided by health officials, expert agencies and local authorities. Our decision regarding the appropriate timing to reopen our retail stores will depend on a number of factors, including the safety of our customers and employees, our ability to comply with government orders and restrictions, and our ability to deliver products to our customers. We expect the scope of allowable retail activities, as well as retail consumer traffic patterns, to vary by geographic region, including ongoing restrictions imposed by local governmental authorities, the demand for our products within the region, and the actual and expected impact of the COVID-19 pandemic on the region. |

E-Commerce Business

| • | Even prior to mandatory retail store closures resulting from the COVID-19 pandemic, we observed a meaningful shift in the way consumers shop for products and make purchasing decisions, evidenced by significant and prolonged decreases in consumer retail activity as customers continue to migrate to online shopping. These trends have been positively impacting the performance of our e-commerce |

business, while creating challenges and headwinds for our traditional retail business, as well as the retail businesses of our wholesale customers and retail partners.

| • | We operate our e-commerce business through various websites and platforms, which have remained operational throughout the COVID-19 pandemic, and we expect they will continue to remain operational. |

| • | During our fourth fiscal quarter, as well as our first fiscal quarter ending June 30, 2020, we observed strong demand across our brands within our e-commerce business, especially for the UGG and HOKA brands. We expect our wholesale customers that have an established e-commerce presence will experience similar strong demand trends as those we have experienced, although the trends may vary from customer to customer. We continue to see demand for our products, especially within the UGG and HOKA brands, from a number of these wholesale customers, which we believe reflects strong sell-through of our products within our partners’ e-commerce platforms. We expect our wholesale customers that have a greater reliance on their retail store presence may experience more significant adverse impacts from the COVID-19 pandemic. |

| • | We expect our e-commerce business will continue to be a driver of long-term growth, although the growth rate will be unpredictable and may not be in line with our historical experience. We believe the key factors impacting the growth rate will include consumer demand for our products, our ability to fulfill orders through our limited distribution center operations, the scope and duration of the COVID-19 pandemic, and the impact of the COVID-19 pandemic on consumer confidence and discretionary spending. However, we do not expect the increased demand within our e-commerce businesses to fully offset the negative pressure we are experiencing within our wholesale and retail businesses due to the current retail environment, especially as we move into the second and third fiscal quarters. |

Brand Strategy

| • | We are exercising discipline by focusing on key products that have achieved sustained success with consumers, reducing the number and types of products offered, delaying product launches and consolidating seasonal collections. |

| • | Our ongoing and strategic efforts to reduce the impact of seasonality on our results of operations have had a meaningful positive impact on the year-round performance of the HOKA and UGG brands. While we expect to continue to focus on reducing the impact of seasonality through innovation and the expansion of our product offerings over the long-term, given the magnitude of the UGG brand relative to our other brands, the effect of seasonality on our aggregate net sales and results of operations may continue to be significant. However, it is unclear whether seasonal impacts will be minimized or exaggerated in future periods as a result of the disruptions and uncertainties caused by the COVID-19 pandemic. This uncertainty makes it more difficult for us to predict future demand for our products and manage our manufacturing and inventory, especially as we approach the typical high-selling season for the UGG brand. |

| • | Within the UGG brand, we have experienced strong sell-through of certain product lines, including the slipper category in general, as we believe consumers are seeking out luxurious comfort in the current work-from-home environment. In addition, the UGG brand continues to experience success through the introduction of year-round products, improving the UGG brand’s overall year-round performance. However, we are experiencing softness within the UGG wholesale channel, especially within geographies impacted by extensive retail store closures. |

| • | Within the HOKA brand, we continue to see strong demand across our product offerings, which we believe is being fueled in part by an even greater emphasis on running and outdoor exercise as consumers seek to find healthy outlets in response to the COVID-19 pandemic. The significant growth of the HOKA brand’s year-round performance product offerings as a percentage of our aggregate net sales has had a meaningful positive impact on our seasonality trends, as well as our overall financial results. However, despite the recent growth and success of the HOKA brand, the impacts of the pandemic may cause the growth rate of HOKA brand sales to decline. |

| • | The Sanuk and Teva brands are experiencing a disproportionate negative impact from the pandemic as the highest percentage of net sales for these brands typically occur during our fourth fiscal quarter and first fiscal quarter. We are actively monitoring the cost structures associated with these brands. |

Supply Chain

| • | We experienced certain disruptions to sourcing with our third-party manufacturers during the fourth fiscal quarter. While these disruptions have since been mitigated, it is possible there will be disruptions in the future. |

| • | Our Moreno Valley, California, distribution center, as well as our global third-party logistics providers (3PLs), remain open and are operating at reduced capacity and with limited and modified operations. In order to promote the health and safety of our distribution center employees, we have implemented enhanced safety measures and protocols at our distribution center, including strict social distancing requirements and heightened cleaning of the facility in accordance with Center for Disease Control and Prevention guidelines. Due to the social distancing requirements we have implemented, we are limiting the number of employees on-site relative to our typical personnel capacity. We are experiencing, and our 3PLs are experiencing, certain operational and logistical challenges as a result of limited and modified operations, including some delays in the shipments of our products. We are working to mitigate the impact of limited and modified operations on our peak selling periods, but we may not be successful in these efforts. |

| • | We are encountering challenges attracting and retaining quality candidates to staff our distribution center operations as we increasingly compete with other companies with growing e-commerce operations. For example, during the past two fiscal years, we have significantly increased certain distribution center employee wages in an effort to attract and retain talent. Although growing unemployment rates resulting from the COVID-19 pandemic may result in a larger short-term candidate pool, we may face ongoing challenges with recruiting employees as our competitors grow their e-commerce channels and require additional warehouse and distribution center staff. |

Omni-Channel Strategy

| • | We have implemented a product segmentation strategy, as well as an allocation strategy for the UGG brand’s core Classics franchise in the US wholesale marketplace. These strategies are designed to assist us in controlling product inventory, reducing the impact of discounts and close-outs on our sales and gross margins, and increasing full-priced selling across our product offerings. Similarly, we are implementing a multi-year marketplace reset strategy in Europe and Asia to drive UGG brand heat. We expect the COVID-19 pandemic will delay or mitigate the benefits we may receive from these strategies. |

| • | As a result of changes in consumer purchasing behavior, we continue to focus on the enhancement of our omni-channel strategy to enable us to better engage existing and prospective consumers and expose them to our brands. Our strategy is transforming the way we approach marketing, including through a sustained focus on our targeted digital marketing efforts, as well as marketing activations and product seeding to drive global brand heat. For example, we have begun applying these transformation efforts in Europe to drive UGG brand heat as we work to differentiate consumer experiences across various consumer touch points as part of our marketplace reset strategy. We have also started to apply this marketing strategy shift in Asia. |

| • | In response to the COVID-19 pandemic, we have enhanced our focus on digital marketing as we seek to target consumers within the work-from-home environment and promote products that are desirable based on current consumer preferences, working conditions and lifestyle choices. |

| • | We believe we are in a strong financial position to respond to the disruptions and uncertainties caused by the COVID-19 pandemic. As of March 31, 2020, our cash and cash equivalents balance was $649,436. In addition, we had available borrowings of $469,473 under our existing revolving credit facilities, providing a liquidity position of over $1,000,000 as of March 31, 2020. For additional information, see the sections entitled “Liquidity” and “Capital Resources” below. |

| • | We are temporarily pausing repurchases under our Stock Repurchase Programs due to the disruption and uncertainty caused by the COVID-19 pandemic and our focus on liquidity and cash management. |

| • | We are working closely with our wholesale customers, as well as our manufacturers and suppliers, to manage accounts receivable and accounts payable to maximize the availability of working capital. |

Operating Expenses

| • | To mitigate the adverse impact the COVID-19 pandemic may have on our business and operations, we have implemented a number of temporary measures to reduce operating expenses, including: |

| ◦ | restricting employee travel; |

| ◦ | canceling or postponing certain events, trainings, and conferences; |

| ◦ | converting meetings with current and prospective customers to a virtual platform; |

| ◦ | suspending hiring of certain non-essential employees and annual salary increases; |

| ◦ | eliminating or deferring discretionary expenditures; |

Recent Developments

Restructuring Plan.

In general, the intent of this restructuring plan was to reduce overhead costs and create operating efficiencies while improving collaboration across brands.

In connection with our restructuring plan, we closed 46 company-owned global retail stores as of March 31, 2019, including conversions to partner retail stores, and consolidated our brand operations and corporate headquarters.

Our decision to open or close retail store locations was evaluated based on the operating results of each store through at least two peak selling seasons, as well as our retail store fleet optimization strategies and long-term strategic objectives.

| | | | |

| --- | --- | --- | --- |

The cumulative restructuring charges incurred by category as of March 31, 2019, are as follows:

| Lease terminations | $ | 18,282 | |

| Retail store fixed asset impairment | 9,372 | | |

| Severance costs | 9,776 | | |

| Software and office fixed asset impairment | 6,987 | | |

| Other* | 11,202 | | |

| Total | $ | 55,619 | |

*Includes costs related to office consolidations and termination of contracts and services.

The cumulative restructuring charges by applicable reportable operating segment are as follows:

| | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | 2019 | | | | 2018 | | | | 2017 | | | | | | |

| UGG brand wholesale | $ | — | | | $ | — | | | $ | 2,238 | | | $ | 2,238 | |

| Sanuk brand wholesale | — | | | | — | | | | 20 | | | | 3,068 | | |

| Other brands wholesale | — | | | | — | | | | 102 | | | | 2,263 | | |

| Direct-to-Consumer | — | | | | 149 | | | | 12,771 | | | | 23,454 | | |

| Unallocated overhead costs | 295 | | | | 1,518 | | | | 13,853 | | | | 24,596 | | |

| Total | $ | 295 | | | $ | 1,667 | | | $ | 28,984 | | | $ | 55,619 | |

Cumulative restructuring charges include restructuring charges of $24,673, which were incurred during the fiscal year ended March 31, 2016.

During the years ended March 31, 2019, 2018, and 2017, total restructuring charges incurred and stated above were recorded in SG&A expenses in the consolidated statements of comprehensive income (loss).

As of March 31, 2019, we have completed our restructuring plan and achieved cumulative SG&A expense savings to date along with cumulative restructuring charges.

Consistent with our strategy, the principal drivers of the net annualized operating profit improvement achieved were costs of goods sold improvements, resulting from lower input costs and improved supply chain management, and SG&A expense savings, primarily driven by retail store closures, office consolidations, lower corporate infrastructure costs and process improvement efficiencies.

| • | Sales of our products are highly seasonal and are sensitive to weather conditions, which are unpredictable and beyond our control. To address seasonality, we continue to drive our strategy of introducing counter-seasonal products through category expansion, including the UGG brand’s spring and summer products, as well as the year-round performance product offering of the HOKA brand. Even though we continue to expand our product lines with the goal of creating more year-round styles for our brands to drive sales and offset the impact of weather conditions, the effect of favorable or unfavorable weather on our aggregate sales and operating results may continue to be significant. |

| • | We believe there has been a meaningful shift in the way consumers shop for products and make purchasing decisions. The retail industry continues to undergo significant structural changes fueled by technology and the internet, changes in consumer purchasing behavior and a shrinking retail footprint. In particular, retail stores are experiencing significant and prolonged decreases in consumer traffic as customers continue to migrate to shopping online. This shift is positively impacting the performance of our E-Commerce business, while creating challenges and headwinds for our retail business as well as the business of our key customers. It is also transforming the way we approach marketing, including our focus on digital marketing efforts. |

| • | As a result of changes in consumer purchasing behavior, we expect our E-Commerce business will continue to be a driver of long-term growth, although we expect the year-over-year growth rate will decline over time as the size of our E-Commerce business increases. |

| • | Starting in the second half of 2018, we implemented a product segmentation strategy, as well as an allocation strategy for the UGG brand’s core Classics franchise in the United States (US) wholesale marketplace. We plan to continue this strategic management of the US marketplace in future seasons and expect to implement similar strategies internationally during fiscal year 2020. |

| • | We believe consumers are buying product closer to the particular wearing occasion (“buy now, wear now”), which tends to shorten the purchasing windows for weather-dependent product. Not only does this trend impact our DTC business, we believe it is also impacting the purchasing behavior of our large wholesale customers. In particular, these customers appear to be shortening their purchasing windows to address the evolving behavior of retail consumers and to manage their own product-related inventories. |

| • | Foreign currency exchange rate fluctuations have the potential to cause variations in our operating results. While we seek to hedge some of the risks associated with foreign currency exchange rate fluctuations, these changes are largely outside of our control. We expect these changes will continue to impact the future purchasing patterns of our customers, as well as our operating results. |

| • | We believe consumers are increasingly buying brands which advance sustainable business practices and deliver quality products while striving for minimal environmental impact with socially conscious operations. Through our Corporate Responsibility Program, we expect to continue to advance our sustainable business initiatives. |

We perform an annual assessment of the appropriateness of our reportable operating segments during the third quarter of our fiscal year.

However, due to known circumstances arising during the first quarter of the fiscal year ending March 31, 2019 (Q1 2019), management performed this assessment at that time.

These circumstances included an assessment of quantitative factors, such as the actual and forecasted sales and operating income of the wholesale operations of the HOKA brand compared to our other reportable operating segments, as well as an assessment of qualitative factors, such as the ongoing growth of, and our increased investment in, the wholesale operations of the HOKA brand.

As a result, beginning in Q1 2019, we added a sixth reportable operating segment to separately report the wholesale operations of the HOKA brand.

[removed: Commodity] [added: Commodity] Price [removed: Risk][added: Risk]

For the manufacturing of our products, we purchase certain raw materials that are affected by commodity prices, which include sheepskin, [removed: leather] [added: leather,] and wool.

The supply of sheepskin, which is used to manufacture a significant portion of [removed: our] [added: the] UGG brand products, is in high demand and there are a limited number of suppliers that [removed: are able to] [added: can] meet our expectations for the quantity and quality of sheepskin that we require.

We presently rely on [removed: only] two tanneries to provide [removed: the majority] [added: most] of our sheepskin.

We believe [removed: the] significant factors affecting the price of sheepskin include weather patterns, harvesting decisions, incidence of disease, the price of other commodities such as wool and leather, the demand for our products and the products of our competitors, and global economic conditions.

The purchasing contracts and other pricing arrangements we use for sheepskin and leather may result in purchase obligations which are not [removed: reflected] [added: recorded] in our consolidated balance sheets.

With respect to sheepskin and leather, in the event of significant price increases, we will likely not be able to adjust our selling prices sufficiently to eliminate the impact of such increases on our [removed: operating] [added: gross] margins.

[removed: Foreign] [added: Foreign] Currency Exchange Rate [removed: Risk][added: Risk]

Fluctuations in currency exchange rates, primarily between the US dollar and the currencies of Europe, Asia, Canada, and Latin America where we operate, may affect our results of operations, financial [removed: position] [added: position,] and cash flows.

Although [removed: the majority] [added: most] of our sales and inventory purchases are denominated in US dollars, these sales and inventory purchases may be impacted by fluctuations in the exchange rates between the US dollar and local currencies in the international markets where our products are sold and manufactured.

We are exposed to financial statement transaction gains and losses as a result of remeasuring our [removed: financial positions] [added: monetary assets and liabilities] that are denominated in currencies other than the subsidiaries’ functional currencies.

We translate [removed: monetary] [added: all] assets and liabilities denominated in foreign currencies into US dollars using the exchange rate as of the end of the reporting period.

Gains and losses resulting from translating assets and liabilities from our [removed: subsidiaries’] [added: subsidiaries'] functional currencies to US dollars are [removed: recognized] [added: recorded] in other comprehensive [removed: income or loss.][added: income.]

Foreign currency exchange rate fluctuations affect our reported profits and can [removed: distort] [added: make] comparisons from year to [removed: year.][added: year more difficult.]

As our international operations grow and we increase purchases and sales in foreign currencies, we will continue to evaluate our hedging [removed: policy] [added: strategy] and may utilize additional derivative instruments, as needed, to hedge our foreign currency exchange rate risk.

[removed: A] [added: As of March 31, 2020, a] hypothetical 10.0% foreign currency exchange rate fluctuation would have [added: had] no impact on the fair value of our [removed: derivative] [added: financial] instruments as there were none [removed: outstanding as of March 31, 2019.][added: outstanding.]

Refer to Note 9, “Derivative Instruments,” of our consolidated financial statements [added: included] in Part [removed: IV,] [added: IV] within this Annual Report for further information on our use of derivative contracts.

[removed: Interest] [added: Interest] Rate [removed: Risk][added: Risk]

Our market risk exposure with respect to our revolving credit facilities is tied to changes in applicable interest rates, including the [removed: Alternative] [added: Alternate] Base Rate, the federal funds effective rate, [removed: currency specific adjusted] [added: currency-specific] London Interbank Offered Rate, and the Canadian Dollar Offered Rate for our Primary Credit Facility, [removed: the] People’s Bank of China market rate for our China Credit Facility, and [removed: the] Tokyo Interbank Offered Rate for our Japan Credit Facility.

A hypothetical 1.0% increase in interest rates for borrowings made under our revolving credit facilities would have resulted in an [added: immaterial] aggregate [removed: increase] [added: change] to interest expense [added: recorded in our consolidated statements] of [removed: $179] [added: comprehensive income] during the year ended March 31, [removed: 2019.][added: 2020.]

Refer to Note 6, “Revolving Credit Facilities and Mortgage Payable,” of our consolidated financial statements [added: included] in Part IV within this Annual Report for further information on our revolving credit facilities.

As of March 31, 2020, there were no known factors that we would expect to result in a material change in the general nature of our foreign currency exchange rate risk exposure.

During the year ended March 31, 2019 and through May 17, 2019, there were no factors that we would expect to result in a material change in the general nature of our primary market risk exposure, including the categories of market risk to which we are exposed and the particular markets that present the primary risk of loss.

[removed: General][added: General]

We are a global leader in designing, marketing, and distributing innovative footwear, [removed: apparel] [added: apparel,] and accessories developed for both everyday casual lifestyle use and high-performance activities.

We market our products primarily under five proprietary brands: UGG, HOKA, Teva, [removed: Sanuk] [added: Sanuk,] and Koolaburra.

We believe that our products are distinctive and appeal broadly to women, [removed: men] [added: men,] and children.

We sell our products through quality domestic and international retailers, international distributors, and directly to our consumers both domestically and internationally through our [removed: Direct-to-Consumer (DTC)] [added: DTC] business, which is comprised of our retail stores and [removed: E-Commerce] [added: e-commerce] websites.

[removed: Recent Developments][added: Recent Developments]

Refer to Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and Note [removed: 1, “General,” under the heading “Restructuring Plan”] [added: 7, “Leases and Other Commitments,”] of our consolidated financial statements in Part IV within this Annual Report for further information on our [removed: restructuring efforts and its impact on our results of operations and reportable operating segments.][added: minimum purchase commitments.]

Refer to Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” within this Annual Report for further information on our [removed: operating profit improvement plan and its impact on our results of operation and reportable operating segments.][added: DTC business.]

[removed: Products] [added: Products] and [removed: Brands][added: Brands]

We currently market our products primarily under five propriety brands, composed of our four primary brands and our [added: other brands, which currently consist of the Koolaburra by UGG brand, as well as other discontinued brands during the periods presented (collectively,] Other [removed: brands.][added: brands).]

[added: UGG.] The UGG brand is one of the most iconic and recognized brands in our industry, which highlights our successful track record of building niche brands into lifestyle and fashion market leaders.

With loyal consumers around the world, the UGG brand has proven to be a highly resilient line of premium footwear, [removed: apparel] [added: apparel,] and accessories with expanded product offerings and a growing global audience that [removed: attracts] [added: appeals to] women, [removed: men] [added: men,] and children.

We intend to continue diversifying the UGG brand to drive year-round product sales, including [added: through] expansion of women’s spring and summer footwear, men’s products, apparel, home [removed: goods] [added: goods,] and accessories.

[added: HOKA.] The HOKA brand is an authentic, premium line of year-round performance footwear and apparel that offers enhanced cushioning and inherent stability with minimal [removed: weight, originally designed for ultra-runners, and now appeals to athletes around the world, regardless of activity.][added: weight.]

The HOKA brand is quickly becoming a leading brand within the [added: run] specialty [removed: community] [added: wholesale accounts,] with strong marketing fueling both domestic and international sales growth.

[added: Teva.] The Teva brand, which pioneered the sport sandal category, is born from the outdoors and rooted in adventure.

[added: Sanuk.] The Sanuk brand originated in Southern California surf culture and has emerged into a lifestyle brand with a presence in the relaxed casual shoe and sandal categories.

[added: Other Brands.] Other [removed: Brands] [added: brands] currently [removed: consists] [added: consist] of the Koolaburra by UGG [removed: brand, as well as other] [added: brand and a] discontinued [removed: brands] [added: brand] during the [removed: periods] [added: prior period] presented.

The Koolaburra brand is a casual footwear fashion line using sheepskin and other plush [removed: materials, sold primarily through our wholesale channel] [added: materials] and is intended to target the value-oriented consumer in order to complement [removed: our] [added: the] UGG brand offering.

[removed: Sales] [added: Sales] and [removed: Distribution][added: Distribution]

[added: US Distribution.] In our wholesale channel, we distribute our products in the US through sales representatives, who are organized by account type or geographically and by brand.

We distribute products sold in the US through our distribution [removed: centers] [added: center] in Moreno [removed: Valley and Camarillo,] [added: Valley,] California, as well as through a third-party logistics provider (3PL) in Pennsylvania.

Our distribution [removed: centers feature] [added: center features] a warehouse management system that enables us to efficiently pick and pack products for direct shipment to customers.

Refer to [added: Part I,] Item 2, “Properties,” and Note 7, [removed: “Commitments] [added: “Leases] and [removed: Contingencies,”] [added: Other Commitments,”] of our consolidated financial statements in Part IV within this Annual Report for further disclosure and discussion.

[added: International Distribution.] Internationally, in our wholesale channel, we distribute our products through independent distributors and wholly-owned subsidiaries in many regions and countries, including Europe, Asia-Pacific, Latin America, and Canada, among others.

[added: UGG Wholesale.] We sell our UGG brand products primarily through domestic higher-end department stores such as Nordstrom, Dillard’s, and Macy’s, as well as lifestyle retailers such as Journeys, and online retailers such as Amazon.com, Zappos.com, and Zalando.com.

[added: HOKA Wholesale.] We sell select HOKA brand footwear primarily through full-service domestic specialty retailers and select online retailers, including Fleet Feet, Road Runner Sports, Running Specialty Group, REI, Zappos.com, [removed: Amazon.com,] and Running Warehouse.

[added: Teva Wholesale.] We sell our Teva brand footwear primarily through specialty outdoor retailers, sporting goods and department stores, including REI, Famous Footwear, DSW, Urban Outfitters, Free People, and online retailers such as Amazon.com and Zappos.com.

[added: Sanuk Wholesale.] We sell our Sanuk brand footwear primarily through domestic independent action sports and outdoor specialty footwear retailers, larger national retail chains, and online retailers, including Journeys, Dillard’s, DSW, REI, and online retailers such as Amazon.com and Zappos.com.

[added: Other Brands Wholesale.] We sell our other brands’ footwear primarily through department stores and online retailers.

[added: Direct-to-Consumer.] Our DTC business is comprised of our retail stores and [removed: E-Commerce] [added: e-commerce] websites.

Some examples that demonstrate the extent to which the sales channels are combined, which are [added: collectively] designed to engender brand loyalty while increasing product sales and improving our inventory productivity, include the following:

| • | “Ship from Store”: Inventory that is available in our stores but [removed: is] out of stock online can be shipped from our stores. We expect future advancements in this capability will use algorithms to select the optimal fulfillment source. |

| • | “UGG Closet”: A limited [removed: E-Commerce] [added: e-commerce] outlet channel that offers an online portal designed to provide an efficient way to [removed: closeout] [added: close out] inventory through direct sales to consumers. |

As of March 31, [removed: 2019,] [added: 2020,] we had a total of [removed: 156 company-owned] [added: 145] global retail stores, which includes [removed: 88] [added: 76] concept stores and [removed: 68] [added: 69] outlet [removed: stores.][added: stores, and operated our e-commerce business through an aggregate of 28 Company-owned websites and mobile platforms in ten different countries.]

Refer to Part [added: I, Item 1A, “Risk Factors,” and Part] II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” within this Annual Report for further [removed: disclosure] [added: information on the impacts to our business] and [removed: discussion.][added: results of operations and associated risks and uncertainties.]

[removed: Product] [added: Product] Design and [removed: Development][added: Development]

Our design and development staff work closely with brand management to develop new styles [removed: for our] [added: and] product lines.

[removed: Manufacturing] [added: Manufacturing] and Supply [removed: Chain][added: Chain]

We generally purchase products from our manufacturers on the basis of individual purchase orders or short-term purchase commitments, rather than maintaining long-term purchase commitments, which provides us greater flexibility to adapt to changing consumer preferences, changes in international trade relations, and [removed: manage our inventory.][added: evolving inventory management requirements.]

COVID-19 Global Pandemic. During early calendar year 2020, the COVID-19 pandemic (referred to herein as COVID-19 or the COVID-19 pandemic) spread globally, including throughout the geographic regions in which we operate our business, and where our wholesale customers, retail stores, manufacturers, and suppliers are located.

In response to the pandemic, many federal, state, local, and foreign governments have put in place, and others in the future may put in place, travel restrictions, “shelter-in-place” orders, and similar government orders and restrictions in an attempt to control the spread and mitigate the impact of the disease.

Such restrictions or orders have resulted in the mandatory closure of “non-essential” businesses (including retail stores), increased unemployment rates, “social distancing” restrictions, reduced tourist activity, work-from-home policies, and other changes that have led to significant disruptions to businesses and global financial markets.

The overall impact of the pandemic on our business and future results of operations is highly uncertain and subject to change, and we are not able to accurately predict the magnitude or scope of such impacts at this time.

We have experienced a number of material impacts resulting from the COVID-19 pandemic during the fiscal quarter ended March 31, 2020 and subsequent to our fiscal year end, and have taken certain precautionary measures intended to help minimize the risk to our business, employees, customers, and the communities in which we operate, including the following:

| • | All of our Company-owned and operated stores, and nearly all of the retail stores of our wholesale customers and retail partners, were closed during a portion of our fourth fiscal quarter and largely remain closed during the first part of our first fiscal quarter ending June 30, 2020. |

| • | Our global e-commerce business, including both our owned websites as well as the online presence of our wholesale customers, has remained substantially operational throughout the COVID-19 pandemic, which has been positively impacted by customers migrating to online shopping and has mitigated some of the negative pressure we are experiencing within our wholesale and retail store businesses. |

| • | We experienced a brief period of disruption at our Moreno Valley, California, distribution center and, while operations have since returned, we are experiencing certain operational and logistical challenges |

as a result of limited and modified operations resulting from safety protocols and increased social distancing measures.

| • | We experienced certain disruptions to sourcing with our third-party manufacturers and, while these disruptions have been mitigated, it is possible there will be disruptions in the future. |

| • | We have implemented a number of temporary measures to reduce operating expenses and mitigate the adverse impact the pandemic may have on our business and operations. |

| • | As of March 31, 2020, we had $649,436 in cash and cash equivalents and $469,473 available borrowings under our revolving credit facilities, providing a liquidity position of over $1,000,000. |

| • | We are temporarily pausing repurchases under our stock repurchase programs due to the disruption and uncertainty caused by the COVID-19 pandemic and our focus on liquidity and cash management. |

Refer to Part II, Item 5, “Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities,” for further information on our stock repurchase programs.

Originally designed for ultra-runners, the brand now appeals to athletes around the world, regardless of activity.

We continue to build product extensions in trail and fitness.

We completed the closure of our former distribution center in Camarillo, California during fiscal year 2020 and moved all of our Camarillo distribution operations to our Moreno Valley location.

quality requirements, as well as the expectations of our consumers.

We believe backlog is an imprecise indicator of our actual product shipments

Subsequent to March 31, 2020, we have experienced some cancellations related to COVID-19 disruptions, and as a result, as of May 14, 2020, our backlog has declined to be roughly flat compared to the prior period.

We are currently reviewing the order book with our wholesale customers, and our backlog may decrease further due to additional order cancellations or deferrals.

We have obtained EDGE (Economic Dividends for Gender Equality) Certification in the US, the leading global assessment and business certification for gender equality.

Environmental, Social and Governance (ESG)

Equally significant is the responsibility we believe we have to our stakeholders, including our consumers, employees, stockholders, and the communities we serve.

We believe consumers are increasingly buying brands that advance sustainable business practices and deliver quality products while striving for minimal environmental impact with socially conscious operations.

Through our Corporate Responsibility and Sustainability Program, we expect to continue to advance our sustainable business initiatives with the goal of consistently delivering brand promises that meet consumer expectations.

As a result of our efforts, we have been recognized by Investor’s Business Daily as one of the “50 Best ESG Companies” during fiscal year 2020.

ESG Governance. Our Sustainability and Compliance Officer is responsible for the day-to-day management of our Corporate Responsibility and Sustainability program.

The Corporate Governance Committee of our Board of Directors, which is comprised of three independent directors, oversees our Corporate Responsibility and Sustainability efforts.

Our Sustainability and Compliance program aligns our internal teams with our sustainable development goals (SDGs) and establishes policies to encourage our partners and suppliers to employ sustainable business practices.

This membership requires an annual statement of progress, which is reflected in our Corporate Responsibility Report.

Our SDGs are currently focused on eight categories where we believe we can make substantial impacts.

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| • | *Waste*. Our distribution center in Moreno Valley, California is implementing efforts to become a zero-waste facility. We are taking steps towards removing single-use plastic at our corporate headquarters, retail stores and distribution center. We are piloting tracking programs with certain manufacturing partners to monitor waste disposal methods. |

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| --- | --- |

| *•* | *Animal Welfare.* We do not believe in the exploitation or killing of animals solely for the purpose of their fur. We only use hides which are the byproduct of the meat industry and, with our innovative UGGpure and UGGplush technologies, the wool used in our UGG brand footwear is almost entirely re-purposed from hides we are already using. We require our supply chain partners to annually certify compliance with our Ethical Sourcing and Animal Welfare Policy. |

Restructuring Plan.

During February 2016, we announced the implementation of a multi-year restructuring plan which was designed to realign our brands across our Fashion Lifestyle and Performance Lifestyle groups, optimize our worldwide owned retail store fleet, and consolidate our management and operations.

The Fashion Lifestyle group includes the UGG and Koolaburra brands.

The Performance Lifestyle group includes the HOKA, Teva, and Sanuk brands.

In general, the intent of our restructuring plan was to reduce overhead costs and create operating efficiencies while improving collaboration across brands.

As of March 31, 2019, we have completed our restructuring plan and achieved cumulative selling, general and administrative (SG&A) expense savings to date along with cumulative restructuring charges.

We currently do not anticipate incurring additional restructuring charges in connection with this restructuring plan.

Operating Profit Improvement Plan.

During February 2017, we announced that, in addition to continuing to execute on our restructuring plan, we would implement various business transformation initiatives to further reduce expenses and improve gross margins, the projected combined impact of which was expected to be approximately $100,000 of net annualized operating profit improvement by the end of the fiscal year ending March 31, 2020.

As of March 31, 2019, we have successfully completed our plan and achieved in excess of $100,000 of net annualized operating profit improvement under both our restructuring and operating profit improvement plans.

We will continue to apply the lessons learned in our completed plans by pursuing opportunities to optimize profitability and seeking to enhance operating results throughout our business.

UGG.

HOKA.

Teva.

Sanuk.

Other Brands.

US Distribution.

While we continue to operate our distribution center in Camarillo, we are currently working to move all of our Camarillo distribution operations to our Moreno Valley location.

Once the migration of our distribution center operations from Camarillo to our Moreno Valley location is complete, we will be closing our Camarillo distribution center.

We anticipate this closure to be completed in the first half of fiscal year 2020.

International Distribution.

UGG Wholesale.

HOKA Wholesale.

Teva Wholesale.

Sanuk Wholesale.

Other Brands Wholesale.

Direct-to-Consumer.

Included in the total count of retail stores worldwide are nine UGG brand flagship stores, which are lead concept stores in our retail channel.

In certain key markets and prominent locations, we have opened flagship stores to showcase our UGG brand products.

These stores are typically larger and have broader product offerings and greater traffic than our general concept stores as they are primarily located in major tourist areas.

Included in the total count of retail stores worldwide are concession stores, which are concept stores that are operated by us within a department or other store, which we lease from the store owner by paying a percentage of concession store sales.

Partner retail stores are excluded from the total count of worldwide company-owned retail stores.

of sheepskin.

Refer to Note 7, “Commitments and Contingencies,” of our consolidated financial statements in Part IV within this Annual Report for further information on our minimum purchase commitments.

The backlog increase primarily relates to timing where certain top customers placed orders earlier versus the prior comparative period rather than an indication of an expected significant increase in sales.

As a result, comparisons of backlog from period-to-period are not necessarily indicative of our future operating results.

Employees.

Encouraging Diversity.

Corporate Responsibility and Sustainability

This assessment informs the annual targets established for our SDGs, which are currently focused on seven categories where we believe we can make the most impact, namely, materials; waste; water; gender equality and quality education; chemicals; climate and clean energy; and human rights.

As part of our global policing program to protect our intellectual property rights, from time to time, we file lawsuits in various jurisdictions asserting claims for alleged acts of trademark counterfeiting, trademark infringement, patent infringement, trade dress [removed: infringement] [added: infringement,] and trademark dilution.

These actions may result in seizure of counterfeit merchandise, out of court settlements with [removed: defendants] [added: defendants,] or other outcomes.

In addition, from time to time, we are subject to claims in which opposing parties will raise, either as affirmative defenses or as counterclaims, the invalidity or unenforceability of certain of our intellectual property rights, including allegations that [removed: our] [added: the] UGG brand trademark registrations and design patents are invalid or unenforceable.

On [removed: May 10, 2019,] [added: March 28, 2016, we filed] a [removed: jury for] [added: lawsuit alleging trademark infringement, patent infringement, unfair competition and violation of deceptive trade practices in] the US District Court for the Northern District of Illinois Eastern Division [removed: ruled in our favor in our willful trademark infringement and counterfeiting lawsuit] against Australian Leather.

While we believe there is no [added: legal] basis for [added: liability,] a judgment [removed: finding] [added: invalidating] the UGG [added: brand] trademark [removed: unenforceable, such a ruling] would have a material adverse effect on our business.

[removed: Following entry of a] [added: Although] final [removed: judgment,] [added: judgment was entered February 6, 2020,] the [removed: court] [added: court's] rulings are subject to appeal.

Although we are subject to [removed: other routine] legal proceedings [added: and other disputes] from time to time in the ordinary course of business, including employment, intellectual [removed: property] [added: property,] and product liability claims, we believe the outcome of all pending legal proceedings [added: and other disputes] in the aggregate will not have a material adverse effect on our business, [removed: operating results,] [added: results of operations,] financial condition, or cash flows.

However, regardless of the outcome, [removed: litigation] [added: resolving legal proceedings and other disputes] can have an adverse impact on us because of legal costs, diversion of [removed: management’s] [added: management's] time and resources, and other factors.

[removed: PART II][added: PART II]

UGG® (UGG), [removed: Teva® (Teva), Sanuk® (Sanuk),] HOKA One One® (HOKA), [added: Teva® (Teva), Sanuk® (Sanuk),] Koolaburra® (Koolaburra), [removed: Ahnu® (Ahnu)] and [removed: UGGpureTM] [added: UGGpure®] (UGGpure) are some of our trademarks.

Certain reclassifications were made for all prior periods presented including the fiscal years ended March 31, [added: 2019,] 2018, 2017, [removed: 2016,] and [removed: 2015,] [added: 2016,] to conform to the current period presentation.

Unless otherwise specifically indicated, all dollar amounts in Items 5, 6, [removed: 7] [added: 7,] and 7A herein are expressed in thousands, except for per share data.

The defined periods for the fiscal years ended March 31, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017] [added: 2018] are stated herein as “year ended” or “years [removed: ended”.][added: ended.”]

In response, Australian Leather raised a number of affirmative defenses and counterclaims, including seeking declaratory judgment that the UGG brand trademark is invalid and unenforceable in the US, cancellation of certain of our US UGG brand trademark registrations, false designation of origin and declaratory judgment that certain of our US design patents are invalid and unenforceable.

On May 10, 2019, a jury ruled in our favor in our lawsuit against Australian Leather.

On December 19, 2019, the court denied Australian Leather’s affirmative defenses.

Australian Leather’s affirmative defense is still outstanding pending a ruling from the court.

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] D.C. [removed: 20549][added: 20549]

[removed: FORM 10-K][added: FORM 10-K]

[added: | ☒ |] Annual Report Pursuant to Section 13 or 15(d) [added: of the Securities Exchange Act of 1934 |]

[added: | ☐ | Transition Report Pursuant to Section 13 or 15(d)] of the Securities Exchange Act of 1934 [added: |]

[removed: For] [added: For] the Fiscal Year [removed: Ended March] [added: Ended March] 31, [removed: 2019][added: 2020]

[removed: DECKERS] [added: DECKERS] OUTDOOR CORPORATION [added: AND SUBSIDIARIES]

| [removed: Delaware] [added: Delaware] | [removed: 95-3015862] [added: 95-3015862] |

[removed: 250] [added: 250] Coromar [removed: Drive, Goleta, California 93117][added: Drive, Goleta, California 93117]

[removed: (805) 967-7611][added: (805) 967-7611]

| [removed: Title] [added: Title] of each [removed: class] [added: class] | [removed: Trading Symbol(s)] [added: Trading Symbol(s)] | [removed: Name] [added: Name] of each exchange on which [removed: registered] [added: registered] |

[removed: Yes ý No o][added: Yes ☒ No ☐]

[removed: Yes o No ý][added: Yes ☐ No ☒]

| Large accelerated filer [removed: x] | [added: ☒ | |] Accelerated filer [removed: o] | [added: ☐ |]

| Non-accelerated filer [removed: o] | [added: ☐ | |] Smaller reporting company [removed: o] | [added: ☐ |]

| | [added: | |] Emerging growth company [removed: o] | [added: ☐ |]

At September 30, [removed: 2018,] [added: 2019,] the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting and non-voting stock held by the non-affiliates of the registrant was approximately [removed: $3,468,302,000,] [added: $4,102,074,000,] based on the number of shares held by non-affiliates of the registrant as of that date, and the last reported sale price of the registrant’s common stock on the New York Stock Exchange on that date, which was [removed: $118.58.][added: $147.36.]

As of the close of business on May [removed: 17, 2019,] [added: 14, 2020,] the number of outstanding shares of the registrant’s common stock, par value $0.01 per share, was [removed: 29,142,002.][added: 27,999,468.]

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

Portions of the registrant’s definitive Proxy Statement on Schedule 14A relating to the registrant’s [removed: 2019] [added: 2020] annual meeting of stockholders, to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, are incorporated by reference in Part III within this Annual Report on Form 10-K.

| | | [removed: Page] [added: Page] |

| [Item [removed: 1.](#s12B899BFF26850989AD21A1F081ADA81)] [added: 1.](#s0C820F74FB335FFA8D0560959FE87BDB)] | [removed: [Business](#s12B899BFF26850989AD21A1F081ADA81)] [added: [Business](#s0C820F74FB335FFA8D0560959FE87BDB)] | [removed: [3](#s12B899BFF26850989AD21A1F081ADA81)] [added: [3](#s0C820F74FB335FFA8D0560959FE87BDB)] |

| [Item [removed: 1A.](#sD127A4078F625E9FAC6515DA03734AF7)] [added: 1A.](#s9D0D1F0923C95247A573B3F9DC211A1A)] | [Risk [removed: Factors](#sD127A4078F625E9FAC6515DA03734AF7)] [added: Factors](#s9D0D1F0923C95247A573B3F9DC211A1A)] | [removed: [10](#sD127A4078F625E9FAC6515DA03734AF7)] [added: [11](#s9D0D1F0923C95247A573B3F9DC211A1A)] |

| (Mark One) | |

For the transition period from to

DECKERS OUTDOOR CORPORATION

| --- | --- |

Yes ☒ No ☐

Yes ☒ No ☐

| | | | | |

| --- | --- | --- | --- | --- |

| | | | | |

| | | | | |

| | | | | |

Yes ☐ No ☒

For the Fiscal Year Ended March 31, 2020

| | [PART I](#s1A2437EA699A52D79BBDFE8466B096FD) | |

10-K 1 deck331201910-kdocument.htm DECK 3 31 2019 10-K

DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES

| | [PART I](#sC356163F2B72519C9BAD3CA65F1E629E) | |

| [Item [removed: 2.](#s1A3E35143250521C8108A3F8ACEAB948)] [added: 2.](#sd8bd63ed3f6548e2be495604ff9293d3)] | [removed: [Properties](#s1A3E35143250521C8108A3F8ACEAB948)] [added: [Properties](#sd8bd63ed3f6548e2be495604ff9293d3)] | [removed: [27](#s1A3E35143250521C8108A3F8ACEAB948)] [added: [31](#sd8bd63ed3f6548e2be495604ff9293d3)] |

| [Item [removed: 3.](#s8f79fd00f6714652988f893ae41a4e3a)] [added: 3.](#s54D22616DC6F5B1186A073DE17600B96)] | [Legal [removed: Proceedings](#s8f79fd00f6714652988f893ae41a4e3a)] [added: Proceedings](#s54D22616DC6F5B1186A073DE17600B96)] | [removed: [28](#s8f79fd00f6714652988f893ae41a4e3a)] [added: [32](#s54D22616DC6F5B1186A073DE17600B96)] |

| [Item [removed: 5.](#sA4B5635BE5485BA59DA1E0F5C6BF6438)] [added: 5.](#s327A885F31FB58D7957A7D6D40FFCFD6)] | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#sA4B5635BE5485BA59DA1E0F5C6BF6438)] [added: Securities](#s327A885F31FB58D7957A7D6D40FFCFD6)] | [removed: [29](#sA4B5635BE5485BA59DA1E0F5C6BF6438)] [added: [33](#s327A885F31FB58D7957A7D6D40FFCFD6)] |

| [Item [removed: 6.](#s268A44CA9C7D5BE6AA318DCCCCCE1D07)] [added: 6.](#sD367FDBB78AC50E0BFFFD6E1C58B0507)] | [Selected Financial [removed: Data](#s268A44CA9C7D5BE6AA318DCCCCCE1D07)] [added: Data](#sD367FDBB78AC50E0BFFFD6E1C58B0507)] | [removed: [31](#s268A44CA9C7D5BE6AA318DCCCCCE1D07)] [added: [35](#sD367FDBB78AC50E0BFFFD6E1C58B0507)] |

| [Item [removed: 7.](#s06845349E6FE57BF9701743F01F80D6C)] [added: 7.](#s4F966DDFE37753E9894E8A70C3E08A7B)] | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s06845349E6FE57BF9701743F01F80D6C)] [added: Operations](#s4F966DDFE37753E9894E8A70C3E08A7B)] | [removed: [32](#s06845349E6FE57BF9701743F01F80D6C)] [added: [35](#s4F966DDFE37753E9894E8A70C3E08A7B)] |

| [Item [removed: 7A.](#s7B143F9891CB5B028397E10B820302B1)] [added: 7A.](#s5C5C28A4FB245EB0A42BBC8C42F8E9BD)] | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#s7B143F9891CB5B028397E10B820302B1)] [added: Risk](#s5C5C28A4FB245EB0A42BBC8C42F8E9BD)] | [removed: [54](#s7B143F9891CB5B028397E10B820302B1)] [added: [55](#s5C5C28A4FB245EB0A42BBC8C42F8E9BD)] |

| [Item [removed: 8.](#sEBEB650C23D5562F891B4202E318D976)] [added: 8.](#s71B4C2BB05F750FDBCF4B30B9117D309)] | [Financial Statements and Supplementary [removed: Data](#sEBEB650C23D5562F891B4202E318D976)] [added: Data](#s71B4C2BB05F750FDBCF4B30B9117D309)] | [removed: [55](#sEBEB650C23D5562F891B4202E318D976)] [added: [56](#s71B4C2BB05F750FDBCF4B30B9117D309)] |

| | [PART II](#s5AC68A8C5BF2570DBCBB0F67B781766D) | |

| | [PART II](#sB0A0DF6C7B7A5B5F85EB10B67EB0529B) | |

| [Item [removed: 9A.](#s2AB63975E63A557BBEDC5B3E99C4C11A)] [added: 9A.](#sD061B62CB83952EF94E84B3A4C68680D)] | [Controls and [removed: Procedures](#s2AB63975E63A557BBEDC5B3E99C4C11A)] [added: Procedures](#sD061B62CB83952EF94E84B3A4C68680D)] | [removed: [55](#s2AB63975E63A557BBEDC5B3E99C4C11A)] [added: [56](#sD061B62CB83952EF94E84B3A4C68680D)] |

| | [removed: [PART III](#sE370E07555EA5317AF1CA3A45F9AAEED)] [added: [PART III](#s3FCCBB0B096454CFAE333B0848C050A0)] | |

| [Item [removed: 10.](#sEA35B5CDF11E53E5BE1F1B03E2F69CB3)] [added: 10.](#s3BE659BC1E005A209148C02C34BB1150)] | [Directors, Executive Officers and Corporate [removed: Governance](#sEA35B5CDF11E53E5BE1F1B03E2F69CB3)] [added: Governance](#s3BE659BC1E005A209148C02C34BB1150)] | [removed: [57](#sEA35B5CDF11E53E5BE1F1B03E2F69CB3)] [added: [58](#s3BE659BC1E005A209148C02C34BB1150)] |

| [Item [removed: 11.](#s11A85830EB585E02A230C0600326EB67)] [added: 11.](#sAD7ACC3CC8355B7F963538D16EB25077)] | [Executive [removed: Compensation](#s11A85830EB585E02A230C0600326EB67)] [added: Compensation](#sAD7ACC3CC8355B7F963538D16EB25077)] | [removed: [57](#s11A85830EB585E02A230C0600326EB67)] [added: [58](#sAD7ACC3CC8355B7F963538D16EB25077)] |

| [Item [removed: 12.](#sFE2C8BA254C45C46AA21B31F23DA9E19)] [added: 12.](#sAE7C3CC6DD0F5F3CA92EEF498470E5CD)] | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#sFE2C8BA254C45C46AA21B31F23DA9E19)] [added: Matters](#sAE7C3CC6DD0F5F3CA92EEF498470E5CD)] | [removed: [57](#sFE2C8BA254C45C46AA21B31F23DA9E19)] [added: [58](#sAE7C3CC6DD0F5F3CA92EEF498470E5CD)] |

| [Item [removed: 13.](#s96A5C64BAE665BB886C6493A9D84A6EC)] [added: 13.](#sD19A2074AE3A5CB2A6E84764B53C4401)] | [Certain Relationships and Related Transactions, and Director [removed: Independence](#s96A5C64BAE665BB886C6493A9D84A6EC)] [added: Independence](#sD19A2074AE3A5CB2A6E84764B53C4401)] | [removed: [57](#s96A5C64BAE665BB886C6493A9D84A6EC)] [added: [58](#sD19A2074AE3A5CB2A6E84764B53C4401)] |

| [Item [removed: 14.](#sD22C6568D6825239AE562804D6B4F327)] [added: 14.](#s79E761C0BB1452C4B5F0752A6FEE599A)] | [Principal Accounting Fees and [removed: Services](#sD22C6568D6825239AE562804D6B4F327)] [added: Services](#s79E761C0BB1452C4B5F0752A6FEE599A)] | [removed: [57](#sD22C6568D6825239AE562804D6B4F327)] [added: [58](#s79E761C0BB1452C4B5F0752A6FEE599A)] |

| [Item [removed: 15.](#sCC97B60F4CCC591DAD45A60C3FF4EF03)] [added: 15.](#s0E060E915A3B5AFBBA331715AEF84161)] | [Exhibits and Financial Statement [removed: Schedule](#sCC97B60F4CCC591DAD45A60C3FF4EF03)] [added: Schedule](#s0E060E915A3B5AFBBA331715AEF84161)] | [removed: [59](#sCC97B60F4CCC591DAD45A60C3FF4EF03)] [added: [60](#s0E060E915A3B5AFBBA331715AEF84161)] |

| | [Index to Consolidated Financial Statements and Financial Statement [removed: Schedule](#sFF4F308F63DB5897A36126E82408B477)] [added: Schedule](#sDFAD36E1D5315A08B10899227CAFDD10)] | [removed: [F-1](#sFF4F308F63DB5897A36126E82408B477)] [added: [F-1](#sDFAD36E1D5315A08B10899227CAFDD10)] |

| | [PART IV](#s276E516EBDF453B69B9C71842031AF80) | |

| | [Signatures](#s4A83D592CAEB59348CE7453F5DC97643) | [63](#s4A83D592CAEB59348CE7453F5DC97643) |

| | [PART IV](#s2b6ec65f4a104c99b4aced7435669543) | |

| | [Signatures](#sA0C276A1DC2550A3A090F157484C06A1) | [62](#sA0C276A1DC2550A3A090F157484C06A1) |

[removed: CAUTIONARY] [added: CAUTIONARY] NOTE REGARDING FORWARD-LOOKING [removed: STATEMENTS][added: STATEMENTS]

This Annual Report on Form 10-K for our fiscal year ended March 31, [removed: 2019] [added: 2020] (Annual Report), and the information and documents incorporated by reference into this Annual Report, contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act), which statements are subject to considerable risks and uncertainties.

| • | our business, operating, investing, capital allocation, [removed: marketing] [added: marketing,] and financing strategies; |

| • | the expansion of our brands and product offerings, and changes to the geographic [added: and seasonal] mix of our products; |

| • | changes to our product distribution [removed: channels,] [added: strategies,] including the implementation of our product [added: allocation and] segmentation [removed: strategy;] [added: strategies and our decision to exit the warehouse channel for the Sanuk brand;] |

| • | changes in consumer tastes and preferences [removed: with respect] to our brands and [removed: products in particular,] [added: products,] and the fashion [removed: industry in general;] [added: industry;] |

| • | expectations relating to the expansion of Direct-to-Consumer [added: (DTC)] capabilities; |

| • | our [removed: plans to consolidate] [added: consolidation of] certain distribution center operations; |

| • | commitments and contingencies, including [added: operating leases and] purchase obligations for product and raw materials; |

| • | [removed: completed and expected] repatriation of earnings of non-United States subsidiaries and any related tax impacts; |

| • | the impact [added: from adoption] of recent accounting pronouncements; and |

| • | overall global economic [added: and political] trends, including foreign currency exchange rate fluctuations, [removed: increased] [added: changes in] interest rates and [removed: increased] [added: changes in] fuel costs. |

We qualify all [removed: of] our forward-looking statements with these cautionary statements.

[removed: PART I][added: PART I]

UGG® (UGG), [removed: Teva® (Teva), Sanuk® (Sanuk),] HOKA One One® (HOKA), [added: Teva® (Teva), Sanuk® (Sanuk),] Koolaburra® (Koolaburra), [removed: Ahnu® (Ahnu)] [added: UGGpure® (UGGpure),] and [removed: UGGpureTM (UGGpure)] [added: UGGplushTM (UGGplush)] are some of our trademarks.

Unless otherwise specifically indicated, all dollar amounts in Items 1, 1A, 2, and 3 herein are expressed in thousands, except for per [removed: share, hours, or pairs data.][added: share amounts.]

The defined periods for the fiscal years ended March 31, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017] [added: 2018] are stated herein as “year ended” or “years [removed: ended”.][added: ended.”]

| • | the impacts of the COVID-19 global pandemic on our operations, business, sales, and results of operations worldwide; |

| • | the impacts of our restructuring and operating profit improvement plans; |

We also have offices in China, Hong Kong, Vietnam, Japan, France, Germany, the Netherlands, [removed: Switzerland,] and the UK [removed: for which some] [added: to] oversee the quality and manufacturing standards of our products, and [removed: others are] for regional sales, operations and [removed: administration.][added: administration, as well as offices in Macau and Hong Kong to coordinate logistics.]

As of March 31, [removed: 2019,] [added: 2020,] we had [removed: 54] [added: 52] retail stores in the US ranging from approximately 1,000 to [removed: 7,000] [added: 13,000] square feet.

Internationally, we had [removed: 102] [added: 93] retail stores in Austria, Belgium, Canada, China, France, Germany, Japan, the Netherlands, [removed: Switzerland] [added: Switzerland,] and the UK.

The following table provides details regarding our significant physical properties as of March 31, [removed: 2019:][added: 2020:]

| [removed: Facility Location] [added: Facility Location] | | [removed: Description] [added: Description] | | [removed: Lease] [added: Lease] or [removed: Own] [added: Own] | | [removed: Facility] [added: Facility] Size (Square [removed: Footage)] [added: Footage)] | |

| Goleta, California | | Corporate Headquarters | | Own | | [removed: 185,000] [added: 185,094] | |

Further, during fiscal year 2020 we completed the move of all of our Camarillo, California distribution operations to our Moreno Valley location and closed our Camarillo distribution center.

While we continue to operate our distribution center in Camarillo, we are currently working to move all of our Camarillo distribution operations to our Moreno Valley location.

Once the migration of our distribution center operations is complete, we will be closing our Camarillo distribution center.

We anticipate this closure to be completed in the first half of fiscal year 2020.

Our international distribution centers are managed by 3PLs and are located in Canada, China, Japan, the Netherlands, and the UK.

We also have a domestic distribution center managed by a 3PL, located in Pennsylvania.

We also have offices in Macau and Hong Kong to coordinate logistics and facilitate procurement.

We have no manufacturing facilities, as all of our products are manufactured by independent third-party contractors.

| Camarillo, California | | Warehouse and Distribution Center | | Lease | | 423,106 | |

Our common stock has traded under the symbol DECK on the NYSE since May 2014 and was [added: previously] traded on the NASDAQ Global Select [removed: Market prior to that date.][added: Market.]

As of May [removed: 17, 2019,] [added: 14, 2020,] we had [removed: 41] [added: 39] stockholders of record based on the records of our transfer agent, which does not include beneficial owners of our common stock whose shares are held in the names of various securities brokers, dealers and registered clearing agencies.

We did not sell any equity securities during the year ended March 31, [removed: 2019] [added: 2020] that were not registered under the Securities Act.

[removed: Stock] [added: Stock] Performance [removed: Graph][added: Graph]

Below is a graph comparing the percentage change in the cumulative total return on our common stock against the cumulative total return of the S&P 500 Apparel, Accessories & Luxury Goods Index and the NYSE Composite Index for the [removed: five-fiscal year] [added: five fiscal-year] periods commencing April 1, [removed: 2014] [added: 2015] and ending March 31, [removed: 2019.][added: 2020.]

The data represented in the graph below assumes one hundred dollars invested in our common stock, the S&P 500 Apparel, Accessories & Luxury Goods Index and the NYSE Composite Index on April 1, [removed: 2014.][added: 2015.]

| | [removed: April 1,] [added: April 1,] | | | | [removed: Years] [added: Years] Ended March [removed: 31,] [added: 31,] | | | | | | | | | | | | | | | | | | |

| | [removed: 2014] [added: 2015] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2018] [added: 2019] | | | | [removed: 2019] [added: 2020] | | |

| S&P 500 Apparel, Accessories & Luxury Goods Index | 100.0 | | | | [removed: 95.5] [added: 88.8] | | | | [removed: 84.8] [added: 70.5] | | | | [removed: 67.4] [added: 90.5] | | | | [removed: 86.4] [added: 87.6] | | | | [removed: 83.7] [added: 43.6] | | |

[removed: ][added: ]

[removed: Dividend Policy][added: Dividend Policy]

[removed: Stock] [added: Stock] Repurchase [removed: Programs][added: Programs]

In [removed: October 2017,] [added: January 2019,] our Board of Directors approved a stock repurchase program which, together with [removed: a] stock repurchase [removed: program] [added: programs] approved in [added: 2017 and] 2015, authorized us to repurchase a total of up to [removed: $400,294] [added: $796,000] of our common stock in the open market or in privately negotiated transactions, subject to market conditions, applicable legal requirements, and other factors [removed: (2017] [added: (collectively, our Stock] Repurchase [removed: Program).][added: Programs).]

As of March 31, [removed: 2019,] [added: 2020,] the aggregate remaining approved amount under [removed: the 2017 Repurchase Program and 2019 Repurchase Program (collectively,] our [removed: “Stock] [added: Stock] Repurchase [removed: Programs”)] [added: Programs] was [removed: $350,212.][added: $159,807.]

During the fourth quarter of the year ended March 31, [removed: 2019,] [added: 2020,] we did not repurchase any shares of our common [removed: stock and had an aggregate remaining approved amount under our Stock Repurchase Programs of $350,212 as of March 31, 2019.][added: stock.]

Refer to [added: Part II,] Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Liquidity and Capital Resources” and Note 10, “Stockholders' Equity,” of our consolidated financial statements and accompanying notes thereto (referred to herein as the [removed: “consolidated] [added: consolidated] financial [removed: statements”)] [added: statements)] in Part IV within this Annual Report for further information on repurchases of our common stock.

| Deckers Outdoor Corporation | $ | 100.0 | | | $ | 82.2 | | | $ | 82.0 | | | $ | 123.6 | | | $ | 201.7 | | | $ | 183.9 | |

| The NYSE Composite Index | 100.0 | | | | 96.2 | | | | 111.3 | | | | 123.7 | | | | 129.7 | | | | 108.1 | | |

The full amounts originally authorized under the 2017 and 2015 stock repurchase programs have been repurchased and these programs have been completed.

We are temporarily pausing repurchases under our Stock Repurchase Programs due to the disruption and uncertainty caused by the COVID-19 pandemic and our focus on liquidity and cash management, although we retain the discretion to commence repurchases in future periods.

| Deckers Outdoor Corporation | $ | 100.0 | | | $ | 86.3 | | | $ | 70.9 | | | $ | 70.7 | | | $ | 106.6 | | | $ | 174.0 | |

| The NYSE Composite Index | 100.0 | | | | 109.7 | | | | 105.6 | | | | 122.1 | | | | 135.8 | | | | 142.3 | | |

In January 2019, our Board of Directors approved the 2019 Repurchase Program, which authorizes us to repurchase up to $261,000 of our common stock.

Our Stock Repurchase Programs do not obligate us to acquire any particular amount of common stock and may be suspended at any time at our discretion.

Our current revolving credit agreements allow us to make share repurchases under these programs, as long as we do not exceed certain leverage ratios and no event of default has occurred under these arrangements.

As of March 31, 2019, we were in compliance with these arrangements.

The following tables present our selected consolidated financial data and should be read in conjunction with [added: Part II,] Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and Part IV, Item 15, “Exhibits and Financial Statement Schedule,” within this Annual Report.

| | [removed: Years] [added: Years] Ended March [removed: 31,] [added: 31,] | | | | | | | | | | | | | | | | | | |

| | [removed: 2019] [added: 2020] | | | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | |

| UGG brand wholesale | $ | [removed: 888,347] [added: 892,990] | | | $ | [removed: 841,893] [added: 888,347] | | | $ | [removed: 826,355] [added: 841,893] | | | $ | [removed: 918,102] [added: 826,355] | | | $ | [removed: 903,926] [added: 918,102] | |

| HOKA brand wholesale | [removed: 185,057] [added: 277,097] | | | | [removed: 132,688] [added: 185,057] | | | | [removed: 93,064] [added: 132,688] | | | | [removed: 74,937] [added: 93,064] | | | | [removed: 47,614] [added: 74,937] | | |

| Teva brand wholesale | [removed: 119,390] [added: 119,108] | | | | [removed: 117,478] [added: 119,390] | | | | [removed: 103,694] [added: 117,478] | | | | [removed: 143,280] [added: 103,694] | | | | [removed: 136,028] [added: 143,280] | | |

| Sanuk brand wholesale | [removed: 69,791] [added: 39,463] | | | | [removed: 78,283] [added: 69,791] | | | | [removed: 77,552] [added: 78,283] | | | | [removed: 90,719] [added: 77,552] | | | | [removed: 102,690] [added: 90,719] | | |

| Other brands wholesale | [removed: 42,818] [added: 67,175] | | | | [removed: 17,273] [added: 42,818] | | | | [removed: 23,142] [added: 17,273] | | | | [removed: 3,842] [added: 23,142] | | | | [removed: 9,441] [added: 3,842] | | |

| Direct-to-Consumer | [removed: 715,034] [added: 736,856] | | | | [removed: 715,724] [added: 715,034] | | | | [removed: 666,340] [added: 715,724] | | | | [removed: 644,317] [added: 666,340] | | | | [removed: 617,358] [added: 644,317] | | |

| [removed: Total] [added: Total] net [removed: sales] [added: sales] | [removed: 2,020,437] [added: 2,132,689] | | | | [removed: 1,903,339] [added: 2,020,437] | | | | [removed: 1,790,147] [added: 1,903,339] | | | | [removed: 1,875,197] [added: 1,790,147] | | | | [removed: 1,817,057] [added: 1,875,197] | | |

| Cost of sales | [removed: 980,187] [added: 1,029,016] | | | | [removed: 971,697] [added: 980,187] | | | | [removed: 954,912] [added: 971,697] | | | | [removed: 1,028,529] [added: 954,912] | | | | [removed: 938,949] [added: 1,028,529] | | |

| [removed: Gross profit] [added: Gross profit] | [removed: 1,040,250] [added: 1,103,673] | | | | [removed: 931,642] [added: 1,040,250] | | | | [removed: 835,235] [added: 931,642] | | | | [removed: 846,668] [added: 835,235] | | | | [removed: 878,108] [added: 846,668] | | |

| Selling, general and administrative expenses | [removed: 712,930] [added: 765,538] | | | | [removed: 709,058] [added: 712,930] | | | | [removed: 837,154] [added: 709,058] | | | | [removed: 684,541] [added: 837,154] | | | | [removed: 653,689] [added: 684,541] | | |

| [removed: Income] [added: Income] (loss) from [removed: operations] [added: operations] | [removed: 327,320] [added: 338,135] | | | | [removed: 222,584] [added: 327,320] | | | | [removed: (1,919] [added: 222,584] | | [removed: )] | | [removed: 162,127] [added: (1,919] | | [added: )] | | [removed: 224,419] [added: 162,127] | | |

| Other (income) expense, net | [removed: (1,614] [added: (2,731] | | ) | | [removed: 1,888] [added: (1,614] | | [added: )] | | [removed: 5,067] [added: 1,888] | | | | [removed: 5,242] [added: 5,067] | | | | [removed: 3,280] [added: 5,242] | | |

| [removed: Income] [added: Income] (loss) before income [removed: taxes] [added: taxes] | [removed: 328,934] [added: 340,866] | | | | [removed: 220,696] [added: 328,934] | | | | [removed: (6,986] [added: 220,696] | | [removed: )] | | [removed: 156,885] [added: (6,986] | | [added: )] | | [removed: 221,139] [added: 156,885] | | |

| Income tax expense (benefit) | [added: 64,724 | | | |] 64,626 | | | | 106,302 | | | | (12,696 | | ) | | 34,620 | | | [removed: | 59,359 | | |]

| [removed: Net income] [added: Net income] | [removed: 264,308] [added: 276,142] | | | | [removed: 114,394] [added: 264,308] | | | | [removed: 5,710] [added: 114,394] | | | | [removed: 122,265] [added: 5,710] | | | | [removed: 161,780] [added: 122,265] | | |

| Total other comprehensive (loss) income | [removed: (9,671] [added: (2,905] | | ) | | [removed: 13,468] [added: (9,671] | | [added: )] | | [removed: (5,894] [added: 13,468] | | [removed: )] | | [removed: (89] [added: (5,894] | | ) | | [removed: (18,425] [added: (89] | | ) |

| [removed: Comprehensive] [added: Comprehensive] income [removed: (loss)] [added: (loss)] | [removed: $] [added: $] | [removed: 254,637] [added: 273,237] | | | [removed: $] [added: $] | [removed: 127,862] [added: 254,637] | | | [removed: $] [added: $] | [removed: (184] [added: 127,862] | [removed: )] | | [removed: $] [added: $] | [removed: 122,176] [added: (184] | [added: )] | | [removed: $] [added: $] | [removed: 143,355] [added: 122,176] | |

| [removed: Net] [added: Net] income per [removed: share] [added: share] | | | | | | | | | | | | | | | | | | | |

| Basic | $ | [removed: 8.92] [added: 9.73] | | | $ | [removed: 3.60] [added: 8.92] | | | $ | [removed: 0.18] [added: 3.60] | | | $ | [removed: 3.76] [added: 0.18] | | | $ | [removed: 4.70] [added: 3.76] | |

| Diluted | $ | [removed: 8.84] [added: 9.62] | | | $ | [removed: 3.58] [added: 8.84] | | | $ | [removed: 0.18] [added: 3.58] | | | $ | [removed: 3.70] [added: 0.18] | | | $ | [removed: 4.66] [added: 3.70] | |

| [removed: Weighted-average] [added: Weighted-average] common shares [removed: outstanding] [added: outstanding] | | | | | | | | | | | | | | | | | | | |

| Basic | [removed: 29,641] [added: 28,385] | | | | [removed: 31,758] [added: 29,641] | | | | [removed: 32,000] [added: 31,758] | | | | [removed: 32,556] [added: 32,000] | | | | [removed: 34,433] [added: 32,556] | | |

| Diluted | [removed: 29,903] [added: 28,694] | | | | [removed: 31,996] [added: 29,903] | | | | [removed: 32,355] [added: 31,996] | | | | [removed: 33,039] [added: 32,355] | | | | [removed: 34,733] [added: 33,039] | | |

| | [removed: As] [added: As] of March [removed: 31,] [added: 31,] | | | | | | | | | | | | | | | | | | |

| Cash and cash equivalents | $ | [removed: 589,692] [added: 649,436] | | | $ | [removed: 429,970] [added: 589,692] | | | $ | [removed: 291,764] [added: 429,970] | | | $ | [removed: 245,956] [added: 291,764] | | | $ | [removed: 225,143] [added: 245,956] | |

| Working capital | [removed: 844,881] [added: 893,165] | | | | [removed: 721,524] [added: 844,881] | | | | [removed: 661,770] [added: 721,524] | | | | [removed: 547,267] [added: 661,770] | | | | [removed: 519,051] [added: 547,267] | | |

| Total assets | [removed: 1,427,206] [added: 1,765,118] | | | | [removed: 1,264,379] [added: 1,427,206] | | | | [removed: 1,191,780] [added: 1,264,379] | | | | [removed: 1,278,068] [added: 1,191,780] | | | | [removed: 1,169,933] [added: 1,278,068] | | |

| Long-term liabilities | [removed: 131,552] [added: 324,052] | | | | [removed: 134,434] [added: 131,552] | | | | [removed: 78,474] [added: 134,434] | | | | [removed: 72,099] [added: 78,474] | | | | [removed: 65,379] [added: 72,099] | | |

| Stockholders' equity | [removed: 1,045,130] [added: 1,140,120] | | | | [removed: 940,779] [added: 1,045,130] | | | | [removed: 954,255] [added: 940,779] | | | | [removed: 967,471] [added: 954,255] | | | | [removed: 937,012] [added: 967,471] | | |

| Statements of Comprehensive Income (Loss) | | | | | | | | | | | | | | | | | | | |

| | 2020 | | | | 2019 | | | | 2018 | | | | 2017 | | | | 2016 | | |

| Balance Sheets | | | | | | | | | | | | | | | | | | | |

| Income Statement Data | | | | | | | | | | | | | | | | | | | |

| Balance Sheet Data | | | | | | | | | | | | | | | | | | | |

[removed: a)] [added: a)] Disclosure Controls and [removed: Procedures][added: Procedures]

In designing and evaluating our disclosure controls and procedures, our management recognized that any system of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours is designed to do, and management necessarily [removed: was] [added: is] required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Under the supervision and with the participation of management, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, [removed: 2019.][added: 2020.]

Based on that evaluation, our Principal Executive Officer [added: (PEO)] and Principal Financial [added: and Accounting] Officer [added: (PFAO)] concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of March 31, [removed: 2019.][added: 2020.]

[removed: b)] [added: b)] Management’s Report on Internal Control over Financial [removed: Reporting][added: Reporting]

Our internal control over financial reporting is a process designed under the supervision of our [removed: Principal Executive Officer] [added: PEO] and [removed: Principal Financial Officer] [added: PFAO] to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with US GAAP.

As of March 31, [removed: 2019,] [added: 2020,] our management, including our [removed: Principal Executive Officer] [added: PEO] and [removed: Principal Financial Officer,] [added: PFAO,] assessed the effectiveness of our internal control over financial reporting using the criteria set forth in [removed: Internal] [added: *Internal] Control — Integrated Framework [removed: (2013)] [added: (2013)*] issued by the Committee of Sponsoring Organizations of the Treadway Commission (commonly referred to as COSO).

Based on this assessment, our management concluded that our internal control over financial reporting was effective based on those criteria as of March 31, [removed: 2019.][added: 2020.]

Refer to Part IV, “Report of Independent Registered Public Accounting Firm - Internal Control Over Financial Reporting,” on page [removed: F-3] [added: F-4] within this Annual Report.

[removed: c)] [added: c)] Internal Control over Financial [removed: Reporting][added: Reporting]

There were no [added: other] changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the year ended March 31, [removed: 2019] [added: 2020] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

[removed: d)] [added: d)] Principal Executive Officer and Principal Financial and Accounting Officer [removed: Certifications][added: Certifications]

The certifications of our [removed: Principal Executive Officer and Principal Financial] [added: PEO] and [removed: Accounting Officer] [added: PFAO] required by Rule 13a-14(a) of the Exchange Act are filed herewith as Exhibit 31.1 and Exhibit 31.2, and furnished as Exhibit 32, within this Annual Report.

[removed: PART III][added: PART III]

The defined periods for the fiscal years ended March 31, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017] [added: 2018] are stated in Items 10, 11, 12, 13, and 14 herein as “year ended” or “years [removed: ended”.][added: ended.”]

During the first quarter of fiscal year 2020, we updated our control framework for certain new internal controls and changes to certain existing internal controls related to the adoption of ASU No. 2016-02, as amended, otherwise known as the new lease standard, and related financial statement reporting and disclosure.

The information required by this item will be disclosed in our definitive proxy statement on Schedule 14A (Proxy Statement) for our [removed: 2019] [added: 2020] annual meeting of stockholders and is incorporated herein by reference.

[removed: The] [added: Our] Proxy Statement will be filed with the SEC within 120 days after the end of the year ended March 31, [removed: 2019] [added: 2020] pursuant to Regulation 14A under the Exchange Act.

[removed: PART IV][added: PART IV]

UGG® (UGG), [removed: Teva® (Teva), Sanuk® (Sanuk),] HOKA One One® (HOKA), [added: Teva® (Teva), Sanuk® (Sanuk),] Koolaburra® (Koolaburra), [removed: Ahnu® (Ahnu)] and [removed: UGGpureTM] [added: UGGpure®] (UGGpure) are some of our trademarks.

The defined periods for the fiscal years ended March 31, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017] [added: 2018] are stated in Item 15 herein as “year ended” or “years [removed: ended”.][added: ended,”]

[removed: EXHIBIT INDEX][added: EXHIBIT INDEX]

| [removed: Exhibit Number] [added: Exhibit Number] | | [removed: Description] [added: Description] of [removed: Exhibit] [added: Exhibit] |

| [removed: *4.1] [added: 4.1] | | [Description of Deckers Outdoor Corporation’s Capital [removed: Stock](https://www.sec.gov/Archives/edgar/data/910521/000091052119000011/deck3312019exhibit41.htm)] [added: Stock (Exhibit 4.1 to the Registrant’s Form 10-K filed on May 30, 2019 and incorporated by reference herein)](http://www.sec.gov/Archives/edgar/data/910521/000091052119000011/deck3312019exhibit41.htm)] |

| [removed: *10.5] [added: 10.5] | | [Amendment to Lease Agreement, dated June 5, 2018, by and between STAG Camarillo 2, LLC and Deckers Outdoor Corporation for distribution center at 3175 Mission Oaks Blvd., Camarillo, CA [removed: 93012](https://www.sec.gov/Archives/edgar/data/910521/000091052119000011/deck3312019exhibit105.htm)] [added: 93012 (Exhibit 10.5 to the Registrant’s Form 10-K filed on May 30, 2019 and incorporated by reference herein)](http://www.sec.gov/Archives/edgar/data/910521/000091052119000011/deck3312019exhibit105.htm)] |

| [removed: *10.11] [added: 10.11] | | [Second Modification Agreement, dated October 11, 2018, to Term Loan Agreement dated as of July 9, 2014, among Deckers Cabrillo, LLC as Borrower and California Bank & Trust, as [removed: Lender](https://www.sec.gov/Archives/edgar/data/910521/000091052119000011/deck3312019exhibit1011.htm)] [added: Lender (Exhibit 10.11 to the Registrant’s Form 10-K filed on May 30, 2019 and incorporated by reference herein)](http://www.sec.gov/Archives/edgar/data/910521/000091052119000011/deck3312019exhibit1011.htm)] |

| [removed: *#10.14] [added: 10.14] | | [Form of Change in Control and Severance [removed: Agreement](https://www.sec.gov/Archives/edgar/data/910521/000091052119000011/deck3312019exhibit1014.htm)] [added: Agreement (Exhibit 10.14 to the Registrant’s Form 10-K filed on May 30, 2019 and incorporated by reference herein)](http://www.sec.gov/Archives/edgar/data/910521/000091052119000011/deck3312019exhibit1014.htm)] |

| [removed: #10.15] [added: #10.18] | | [removed: [Consulting Agreement and General Release, dated May 24, 2016 and effective May 31, 2016, entered into by and between Deckers] [added: [Deckers] Outdoor Corporation [added: Amended] and [removed: Angel Martinez] [added: Restated Deferred Compensation Plan, effective July 1, 2016] (Exhibit [removed: 10.1] [added: 10.2] to the Registrant’s Form [removed: 8-K] [added: 10-Q] filed on [removed: May 27, 2016] [added: November 9, 2017] and incorporated by reference [removed: herein)](http://www.sec.gov/Archives/edgar/data/910521/000091052116000052/exhibit-formofconsultingag.htm)] [added: herein)](http://www.sec.gov/Archives/edgar/data/910521/000091052117000027/deck930201710-qexhibit102.htm)] |

| [removed: #10.16] [added: #10.15] | | [Deckers Outdoor Corporation 2006 Equity Incentive Plan (Appendix A to the Registrant's Definitive Proxy Statement filed on April 21, 2006 and incorporated by reference herein)](http://www.sec.gov/Archives/edgar/data/910521/000095012906004208/v19151ddef14a.htm#010) |

| [removed: #10.17] [added: #10.16] | | [First Amendment to Deckers Outdoor Corporation 2006 Equity Incentive Plan (Appendix A to the Registrant's Definitive Proxy Statement filed on April 9, 2007 and incorporated by reference herein)](http://www.sec.gov/Archives/edgar/data/910521/000095012407002064/v28718def14a.htm) |

| [removed: #10.18] [added: #10.17] | | [Deckers Outdoor Corporation Second Amended and Restated Deferred Stock Unit Compensation Plan, effective as of December 16, 2015 (Exhibit 10.1 to the Registrant's Form 10-Q filed on November 9, 2017 and incorporated by reference herein)](http://www.sec.gov/Archives/edgar/data/910521/000091052117000027/deck930201710-qexhibit101.htm) |