10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

(Mark one)

ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period endedDecember 31, 2014

or

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to         

Commission File Number: 000-22446

DECKERS OUTDOOR CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	95-3015862
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
250 Coromar Drive, Goleta, California	93117
(Address of principal executive offices)	(zip code)

(805) 967-7611

(Registrant’s telephone number, including area code)

 (Former name, former address and former fiscal year, if changed since last report)

 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YesýNoo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YesýNoo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x	Accelerated filer o
Non-accelerated filer o	Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o  No ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at January 30, 2015
Common Stock, $0.01 par value	34,568,408

DECKERS OUTDOOR CORPORATION

AND SUBSIDIARIES

Table of Contents

			Page
Part I.	Financial Information
Item 1.		Financial Statements (Unaudited):
		Condensed Consolidated Balance Sheets as of December 31, 2014 and March 31, 2014	1
		Condensed Consolidated Statements of Comprehensive Income for the Three Months and Nine Months Ended December 31, 2014 and 2013	2
		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2014 and 2013	3
		Notes to Condensed Consolidated Financial Statements	4
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.		Quantitative and Qualitative Disclosures about Market Risk	33
Item 4.		Controls and Procedures	34
Part II.	Other Information
Item 1.		Legal Proceedings	35
Item 1A.		Risk Factors	35
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.		Defaults Upon Senior Securities	36
Item 4.		Mine Safety Disclosures	36
Item 5.		Other Information	36
Item 6.		Exhibits	37
Signatures			38

DECKERS OUTDOOR CORPORATION

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

(amounts in thousands, except par value)

	December 31, 2014			March 31, 2014
ASSETS
Current assets:
Cash and cash equivalents	$	369,442		$	245,088
Trade accounts receivable, net of allowances ($23,443 at December 31, 2014 and $15,569 at March 31, 2014)	189,548			106,199
Inventories	293,905			211,519
Prepaid expenses	14,934			12,067
Other current assets	54,366			27,118
Deferred tax assets	20,967			21,871
Total current assets	943,162			623,862
Property and equipment, net of accumulated depreciation ($123,299 at December 31, 2014 and $103,090 at March 31, 2014)	216,055			184,570
Goodwill	127,934			127,934
Other intangible assets, net of accumulated amortization ($35,561 at December 31, 2014 and $26,026 at March 31, 2014)	92,033			91,411
Deferred tax assets	16,556			17,062
Other assets	21,101			19,365
Total assets	$	1,416,841		$	1,064,204
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings	$	5,367		$	6,702
Trade accounts payable	171,167			76,139
Accrued payroll	27,197			22,927
Other accrued expenses	32,438			11,624
Income taxes payable	46,419			2,908
Value added tax (VAT) payable	12,643			1,915
Total current liabilities	295,231			122,215
Mortgage payable	33,282			—
Other long-term liabilities	55,100			53,140
Commitments and contingencies (note 5)
Stockholders’ equity:
Common stock, $0.01 par value; 125,000 shares authorized; shares issued and outstanding of 34,567 at December 31, 2014 and 34,624 at March 31, 2014	346			346
Additional paid-in capital	154,429			146,731
Retained earnings	890,884			743,815
Accumulated other comprehensive loss	(12,431		)	(2,043		)
Total stockholders’ equity	1,033,228			888,849
Total liabilities and stockholders' equity	$	1,416,841		$	1,064,204

See accompanying notes to condensed consolidated financial statements.

1

DECKERS OUTDOOR CORPORATION

AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(amounts in thousands, except per share data)

	Three Months Ended   December 31,						Nine Months Ended   December 31,
	2014			2013			2014			2013
Net sales	$	784,678		$	736,048		$	1,476,420		$	1,292,858
Cost of sales	369,539			359,848			750,636			679,934
Gross profit	415,139			376,200			725,784			612,924
Selling, general and administrative expenses	200,558			174,701			502,102			407,679
Income from operations	214,581			201,499			223,682			205,245
Other expense (income), net:
Interest income	(38		)	(18		)	(122		)	(34		)
Interest expense	1,308			1,293			3,746			2,740
Other, net	(5		)	(173		)	(130		)	(508		)
Total other expense (income), net	1,265			1,102			3,494			2,198
Income before income taxes	213,316			200,397			220,188			203,047
Income tax expense	56,610			59,500			59,814			58,365
Net income	156,706			140,897			160,374			144,682
Other comprehensive loss, net of tax:
Unrealized (loss) gain on foreign currency hedging	(682		)	(34		)	759			(2,016		)
Foreign currency translation adjustment	(6,647		)	(1,892		)	(11,147		)	(83		)
Total other comprehensive loss	(7,329		)	(1,926		)	(10,388		)	(2,099		)
Comprehensive income	$	149,377		$	138,971		$	149,986		$	142,583
Net income per share:
Basic	$	4.54		$	4.08		$	4.64		$	4.19
Diluted	$	4.50		$	4.04		$	4.59		$	4.15
Weighted-average common shares outstanding:
Basic	34,537			34,541			34,598			34,496
Diluted	34,853			34,893			34,912			34,855

 See accompanying notes to condensed consolidated financial statements.

2

DECKERS OUTDOOR CORPORATION

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(amounts in thousands)

	Nine Months Ended   December 31,
	2014			2013
Cash flows from operating activities:
Net income	$	160,374		$	144,682
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation, amortization and accretion	37,808			32,469
Change in fair value of contingent consideration	(1,559		)	836
Provision for doubtful accounts, net	987			439
Provision for deferred income taxes	1,342			(3,925		)
Stock compensation	9,450			10,732
Other	2,835			1,250
Changes in operating assets and liabilities:
Trade accounts receivable	(83,207		)	(74,133		)
Inventories	(81,742		)	(2,496		)
Prepaid expenses and other current assets	(29,843		)	(51,141		)
Income tax receivable	2,303			4,799
Other assets	(1,374		)	(4,334		)
Trade accounts payable	94,365			93,546
Contingent consideration	(364		)	—
Accrued expenses	33,508			42,725
Income taxes payable	44,444			46,121
Long-term liabilities	3,400			4,788
Net cash provided by operating activities	192,727			246,358
Cash flows from investing activities:
Purchases of property and equipment	(66,663		)	(67,725		)
Purchases of intangibles and other assets, net	(9,489		)	(5,368		)
Net cash used in investing activities	(76,152		)	(73,093		)
Cash flows from financing activities:
Cash paid for shares withheld for taxes	(3,956		)	(4,932		)
Excess tax benefits from stock compensation	1,614			1,801
Cash paid for repurchases of common stock	(13,306		)	—
Contingent consideration paid	(115		)	—
Proceeds from issuance of short-term borrowing	199,784			310,728
Cash paid for repayment of short-term borrowings	(201,706		)	(311,000		)
Cash received from issuances of common stock	—			52
Proceeds from mortgage loan	33,931			—
Mortgage loan origination costs	(338		)	—
Repayment of mortgage principal	(157		)	—
Net cash provided by (used in) financing activities	15,751			(3,351		)
Effect of exchange rates on cash	(7,972		)	2,620
Net change in cash and cash equivalents	124,354			172,534
Cash and cash equivalents at beginning of period	245,088			64,591
Cash and cash equivalents at end of period	$	369,442		$	237,125
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes	$	4,363		$	11,237
Interest	$	2,660		$	2,518
Non-cash investing and financing activities:
Accruals for purchases of property and equipment	$	2,593		$	2,283
Accruals for asset retirement obligations	$	297		$	1,936
Accruals for shares withheld for taxes	$	1,713		$	3,702
Write-off for shares exercised with a tax deficit	$	—		$	1,752

See accompanying notes to condensed consolidated financial statements.

3

DECKERS OUTDOOR CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Three and Nine months ended December 31, 2014 and 2013

(Unaudited)

(amounts in thousands, except share quantity and per share data)

(1)     General

(a)Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments necessary for a fair presentation for each of the periods presented.  The results of operations for interim periods are not necessarily indicative of results to be achieved for full fiscal years or other interim periods.  Deckers Outdoor Corporation (also referred to as Deckers or the Company) is a global leader in designing, marketing and distributing innovative footwear, apparel, and accessories developed for both everyday casual lifestyle use and high performance activities.  The Company’s business is seasonal, with the highest percentage of UGG® brand net sales occurring in the quarters ending September 30 and December 31 and the highest percentage of Teva® and Sanuk® brand net sales occurring in the quarters ending March 31 and June 30 of each year.  The other brands do not have a significant seasonal impact on the Company.

In February 2014, our Board of Directors approved a change in the Company's fiscal year (FY) end from December 31 to March 31. The change is intended to better align our planning, financial and reporting functions with the seasonality of our business.

In July 2014, the Company acquired its UGG brand distributor that sold to retailers in Germany and now operates a wholesale business in Germany through the newly acquired subsidiary. The acquisition included certain intangible and tangible assets and the assumption of liabilities. The purchase price of the acquisition was not material to the Company’s condensed consolidated financial statements.

We sell our brands through quality domestic retailers and international distributors and retailers, as well as directly to end-user consumers through our E-Commerce business and our retail stores.  Independent third parties manufacture all of our products.

As contemplated by the Securities and Exchange Commission (SEC) under Rule 10-01 of Regulation S-X, the accompanying condensed consolidated financial statements and related footnotes have been condensed and do not contain certain information that will be included in the Company’s annual consolidated financial statements and footnotes thereto.  For further information, refer to the consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on March 3, 2014 (Annual Report).

(b)Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in accordance with United States generally accepted accounting principles (US GAAP) requires management to make estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes.  Management bases these estimates and assumptions upon historical experience, existing and known circumstances, authoritative accounting pronouncements and other factors that management believes to be reasonable.  Significant areas requiring the use of management estimates relate to inventory write-downs, accounts receivable reserves, returns liabilities, stock compensation, performance based compensation, impairment assessments, depreciation and amortization, income tax liabilities and uncertain tax positions, fair value of financial instruments, and fair values of acquired intangibles, assets and liabilities, including estimated contingent consideration payments.  Actual results could differ materially from these estimates.

(c) Recent Accounting Pronouncement

On May 28, 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing

4

DECKERS OUTDOOR CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Three and Nine months ended December 31, 2014 and 2013

(Unaudited)

(amounts in thousands, except share quantity and per share data)

revenue recognition guidance in US GAAP when it becomes effective. The new standard is effective for the Company on April 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

(2)    Goodwill and Other Intangible Assets

The Company’s goodwill and other intangible assets are summarized as follows:

	Goodwill, Net		Other Intangible Assets, Net
Balance at March 31, 2014	$	127,934	$	91,411
Purchase of intangible assets	—		12,472
Amortization expense	—		(9,300		)
Changes in foreign currency exchange rates	—		(2,550		)
Balance at December 31, 2014	$	127,934	$	92,033

The Company’s goodwill by segment is as follows:

	December 31, 2014		March 31, 2014
UGG brand	$	6,101	$	6,101
Sanuk brand	113,944		113,944
Other brands	7,889		7,889
Total	$	127,934	$	127,934

(3)Fair Value Measurements

The fair values of the Company’s cash and cash equivalents, trade accounts receivable, prepaid expenses, other current assets, short-term borrowings, trade accounts payable, accrued payroll, other accrued expenses, income taxes payable and VAT payable approximate the carrying values due to the relatively short maturities of these instruments.  The fair values of the Company’s long-term liabilities, other than contingent consideration, recalculated using current interest rates, would not significantly differ from the recorded amounts.  The fair value of the contingent consideration related to acquisitions and of the Company's derivatives are measured and recorded at fair value on a recurring basis.  Changes in fair value resulting from either accretion or changes in discount rates or in the expectations of achieving the performance targets are recorded in selling, general and administrative expenses (SG&A). The Company records the fair value of assets or liabilities associated with derivative instruments and hedging activities in other current assets or other accrued expenses, respectively, in the condensed consolidated balance sheets.

In 2010, the Company established a nonqualified deferred compensation program that permits a select group of management employees to defer earnings to a future date on a nonqualified basis.  For each plan year, on behalf of the Company, the Company’s Board of Directors (the Board) may, but is not required to, contribute any amount it desires to any participant under this program.  The Company’s contribution will be determined by the Board annually, most likely in the quarter ending March 31.  The value of the deferred compensation is recognized based on the fair value of the participants’ accounts.  The Company has established a rabbi trust for the purpose of supporting the benefits payable under this program.  The assets of the trust are reported in other assets on the Company’s condensed consolidated balance sheets.  All amounts deferred are presented in long-term liabilities in the condensed consolidated balance sheets.

The inputs used in measuring fair value are prioritized into the following hierarchy:

5

DECKERS OUTDOOR CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Three and Nine months ended December 31, 2014 and 2013

(Unaudited)

(amounts in thousands, except share quantity and per share data)

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable.

• Level 3: Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing an asset or liability. 

The table below summarizes the Company’s financial assets and liabilities that are measured on a recurring basis at fair value:

	Fair value at December 31,			Fair Value Measurement Using
	2014			Level 1			Level 2		Level 3
Assets (liabilities) at fair value
Nonqualified deferred compensation asset	$	5,321		$	5,321		$	—	$	—
Nonqualified deferred compensation liability	$	(5,321	)	$	(5,321	)	$	—	$	—
Contingent consideration for acquisition of business	$	(27,700	)	$	—		$	—	$	(27,700	)

	Fair value at March 31,			Fair Value Measurement Using
	2014			Level 1			Level 2			Level 3
Assets (liabilities) at fair value
Nonqualified deferred compensation asset	$	4,534		$	4,534		$	—		$	—
Nonqualified deferred compensation liability	$	(4,534	)	$	(4,534	)	$	—		$	—
Designated derivatives liability	$	(832	)	$	—		$	(832	)	$	—
Contingent consideration for acquisition of business	$	(30,000	)	$	—		$	—		$	(30,000	)

The Level 2 inputs consist of forward spot rates at the end of the reporting period (see note 7).

The fair value of the contingent consideration is based on subjective assumptions.  It is reasonably possible the estimated fair value of the contingent consideration could change in the near-term and the effect of the change could be material.

Sanuk®

The estimated fair value of the contingent consideration attributable to our Sanuk® (Sanuk) brand acquisition is based on the Sanuk brand's estimated future gross profit in calendar year 2015, using a probability weighted average sales forecast to determine a best estimate of gross profit.  The estimated sales forecast includes a compound annual growth rate (CAGR) of 14.9% from calendar year 2013 through calendar year 2015.  The gross profit forecast for calendar year 2015 is approximately $71,000, which is then used to apply the contingent consideration percentage in accordance with the applicable agreement.  The total estimated contingent consideration is then discounted to the present value with a discount rate of 7.0%.  The Company’s use of different estimates and assumptions could produce different estimates of the value of the contingent consideration.  For example, a 5.0% change in the estimated CAGR would change the total liability balance at December 31, 2014 by approximately $2,000.

Hoka One One®

In connection with the Company’s acquisition of the HokaOne One® (Hoka) brand, the purchase price includes contingent consideration with maximum payments of $2,000, which is based on the Hoka brand’s net sales for calendar years 2013 through 2017. The Company estimates future net sales using a probability weighted average sales forecast to determine a best estimate.  The Company’s use of different estimates and assumptions is not expected to have a material impact to the value of the contingent consideration.

6

DECKERS OUTDOOR CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Three and Nine months ended December 31, 2014 and 2013

(Unaudited)

(amounts in thousands, except share quantity and per share data)

Refer to note 5 for further information on the contingent consideration arrangements.

The following table presents a reconciliation of the Level 3 measurement:

Balance at March 31, 2014	$	30,000
Payments	(500		)
Change in fair value	(1,800		)
Balance at December 31, 2014	$	27,700

(4)      Notes Payable and Long Term Debt

In August 2011, the Company entered into a Credit Agreement (Credit Agreement) with JPMorgan Chase Bank, National Association (JPMorgan) as the administrative agent, Comerica Bank (Comerica) and HSBC Bank USA, National Association (HSBC) as syndication agents, and the lenders party thereto. In August 2012, the Company amended and restated in its entirety the Credit Agreement (Amended and Restated Credit Agreement). In November 2014, the Company amended and restated in its entirety the Amended and Restated Credit Agreement (Second Amended and Restated Credit Agreement). The Second Amended and Restated Credit Agreement is a five-year, $400,000 secured revolving credit facility that contains a $75,000 sublimit for the issuance of letters of credit and a $5,000 sublimit for swingline loans and matures on November 13, 2019. Subject to customary conditions and the approval of any lender whose commitment would be increased, the Company has the option to increase the maximum principal amount available under the Second Amended and Restated Credit Agreement by up to an additional $200,000, resulting in a maximum available principal amount of $600,000. None of the lenders under the Second Amended and Restated Credit Agreement has committed at this time or is obligated to provide any such increase in the commitments. In addition to allowing borrowings in US dollars, the Second Amended and Restated Credit Agreement provides a $150,000 sublimit for borrowings in Euros, British pounds and any other currency that is subsequently approved by JPMorgan, each lender and the issuing bank. At the Company’s option, revolving loans issued under the Second Amended and Restated Credit Agreement will initially bear interest at either the adjusted London Interbank Offered Rate (LIBOR) for 30 days (0.17% at December 31, 2014) plus 1.25% per annum, in the case of LIBOR borrowings, or at the alternate base rate plus 0.25% per annum, and thereafter the interest rate will fluctuate between adjusted LIBOR plus 1.25% per annum and adjusted LIBOR plus 2.00% per annum (or between the alternate base rate plus 0.25% per annum and the alternate base rate plus 1.00% per annum), based upon the Company’s total adjusted leverage ratio at such time. In addition, the Company will initially be required to pay fees of 0.175% per annum on the daily amount of the revolving credit facility, and thereafter the fee rate will fluctuate between 0.175% and 0.30% per annum, based upon the Company’s total adjusted leverage ratio.

The Company’s obligations under the Second Amended and Restated Credit Agreement are guaranteed by the Company’s existing and future wholly-owned domestic subsidiaries (other than certain immaterial subsidiaries, foreign subsidiaries, foreign subsidiary holding companies and specified excluded subsidiaries) (the Guarantors), and is secured by a first-priority security interest in substantially all of the assets of the Company and the Guarantors, including all or a portion of the equity interests of certain of the Company’s domestic and first-tier foreign subsidiaries.

The Second Amended and Restated Credit Agreement contains financial covenants which include: the total adjusted leverage ratio must not be greater than 3.25 to 1.00; the sum of the consolidated annual earnings before interest, taxes, depreciation, and amortization (EBITDA) and annual rental expense, divided by the sum of the annual interest expense and the annual rental expense must be greater than 2.25 to 1.00; and other customary limitations. The Second Amended and Restated Credit Agreement contains certain other covenants which include: the maximum amount paid for capital expenditures may not exceed $110,000 per year if the total adjusted leverage ratio is equal to or exceeds 2.75 to 1.00; the maximum additional unsecured debt may not exceed $200,000; the Company may not have aggregate ERISA events that are considered materially adverse; the Company may not have a change of control (as defined in the Second Amended and Restated Credit Agreement); and no restrictions on dividends, share repurchases or acquisitions if the total adjusted leverage ratio does not exceed 2.75 to 1.00.

7

DECKERS OUTDOOR CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Three and Nine months ended December 31, 2014 and 2013

(Unaudited)

(amounts in thousands, except share quantity and per share data)

At December 31, 2014, the Company had no outstanding borrowings under the Second Amended and Restated Credit Agreement and outstanding letters of credit of approximately $100.  As a result, the unused balance and the amount available to borrow after applying the total adjusted leverage ratio under the Second Amended and Restated Credit Agreement was approximately $399,900 at December 31, 2014.  In August 2012, the Company incurred approximately $1,700 of deferred financing costs which were included in prepaid expenses and amortized over the term of the Amended and Restated Credit Agreement using the straight-line method. In November 2014, the Company incurred approximately $800 of additional deferred financing costs which were combined with the remaining unamortized balance from the Amended and Restated Credit Agreement included in prepaid expenses. The combined amount is being amortized over the term of the Second Amended and Restated Credit Agreement using the straight-line method.

In October 2014, the China Credit Facility was amended (Amended China Credit Facility) to include, among other things, an extension of the aggregate period of borrowing from 12 months to 18 months. At December 31, 2014, the Company had approximately $4,900 of outstanding borrowings under the Amended China Credit Facility. Interest is based on the People’s Bank of China rate, which was 5.6% at December 31, 2014.

In July 2014, the Company obtained a mortgage secured by its corporate headquarters property for approximately $33,900.  At December 31, 2014 the outstanding balance under the mortgage was approximately $33,800, which includes approximately $500 in short-term borrowings and approximately $33,300 in mortgage payable in the condensed consolidated balance sheet. The mortgage has a fixed interest rate of 4.928%.  Payments include interest and principal in an amount that will amortize the principal balance over a 30 year period.  Minimum principal payments over the next 5 years are approximately $2,700. The loan will mature and have a balloon payment due in 15 years of approximately $23,400.  In December 2014, the mortgage financial covenants were amended to be consistent with the financial covenants of the Second Amended and Restated Credit Agreement as discussed above.

(5)   Commitments and Contingencies

The Company is currently involved in various legal claims arising in the ordinary course of business.  Management does not believe that the disposition of these matters, whether individually or in the aggregate, will have a material effect on the Company’s financial position or results of operations.

Contingent Consideration.  In July 2011, the Company acquired the Sanuk brand, and the total purchase price included contingent consideration payments.  As of December 31, 2014, the remaining contingent consideration payment, which has no maximum, is 40.0% of the Sanuk brand gross profit in calendar year 2015 and is to be paid within 60 days following the end of the performance period.

As of December 31, 2014 and March 31, 2014, contingent consideration for the acquisition of the Sanuk brand of approximately $26,200 and $28,000, respectively, is included within long-term liabilities in the condensed consolidated balance sheets.  Refer to note 3 for further information on the contingent consideration amounts.

In September 2012, the Company acquired Hoka, and the total purchase price included contingent consideration payments with a maximum of $2,000.  As of December 31, 2014 and March 31, 2014, contingent consideration for the acquisition of the Hoka brand of approximately $1,500 and $1,800, respectively, is included within other accrued expenses and long-term liabilities in the condensed consolidated balance sheets.  Refer to note 3 for further information on the contingent consideration amounts.

Future Capital Commitments. As of December 31, 2014, the Company had approximately $7,000 of material commitments for future capital expenditures primarily related to equipment costs of its new distribution center and tenant improvements for retail store space in Japan and China.

Income Taxes.  The Company files income tax returns in the US federal jurisdiction and various state, local, and foreign jurisdictions.  When tax returns are filed, some positions taken are subject to uncertainty about the merits of the position taken or the amount that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which the Company believes it is more likely than not that the position will be sustained upon examination.

8

DECKERS OUTDOOR CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Three and Nine months ended December 31, 2014 and 2013

(Unaudited)

(amounts in thousands, except share quantity and per share data)

Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement. The portion of the benefits that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying condensed consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.  With few exceptions, the Company is no longer subject to US federal, state, local, or non-US income tax examinations by tax authorities for years before 2008.

Although the Company believes its tax estimates are reasonable and prepares its tax filings in accordance with all applicable tax laws, the final determination with respect to any tax audits, and any related litigation, could be materially different from the Company’s estimates or from its historical income tax provisions and accruals.  The results of an audit or litigation could have a material effect on operating results or cash flows in the periods for which that determination is made.  In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties, or interest assessments.

The Company has ongoing income tax examinations in various state and foreign tax jurisdictions.  During the three and nine months ended December 31, 2014, the Company recorded an accrual for uncertain tax positions of approximately $200 and $2,200. In addition, accruals for interest and potential penalties of approximately $1,100 were recorded during the nine months ended December 31, 2014. The accrual relates to tax positions taken in prior years that are subject to examination.  The Company records accruals relating to interest and potential penalties related to income tax matters within interest expense. It is reasonably possible that approximately $300 of uncertain tax positions will be settled within the next 12 months.

Indemnification.   The Company has agreed to indemnify certain of its licensees, distributors, and promotional partners in connection with claims related to the use of the Company’s intellectual property.  The terms of such agreements range up to five years initially and generally do not provide for a limitation on the maximum potential future payments.  From time to time, the Company also agrees to indemnify its licensees, distributors and promotional partners in connection with claims that the Company’s products infringe the intellectual property rights of third parties.  These agreements may or may not be made pursuant to a written contract. In addition, from time to time, the Company also agrees to standard indemnfication provisions in commercial agreements in the ordinary course of business.

Management believes the likelihood of any payments under any of these arrangements is remote and would be immaterial.  This determination was made based on a prior history of insignificant claims and related payments.  There are no currently pending claims relating to indemnification matters involving the Company’s intellectual property.

(6)      Stockholders’ Equity

In May 2006, the Company adopted the 2006 Equity Incentive Plan (2006 Plan), which was amended by Amendment No. 1 dated May 9, 2007.  The primary purpose of the 2006 Plan is to encourage ownership in the Company by key personnel, whose long-term service is considered essential to the Company’s continued success.  The 2006 Plan reserves 6,000,000 shares of the Company’s common stock for issuance to employees, directors, or consultants.  The maximum aggregate number of shares that may be issued under the 2006 Plan through the exercise of incentive stock options (Options) is 4,500,000.  Pursuant to the Deferred Stock Unit Compensation Plan, a sub plan under the 2006 Plan, a participant may elect to defer settlement of their outstanding unvested awards until such time as elected by the participant.

The Company has elected to grant nonvested stock units (NSUs) annually to key personnel.  The NSUs granted entitle the employee recipients to receive shares of common stock in the Company upon vesting of the NSUs.  The vesting of most NSUs is subject to achievement of certain performance targets.  During the three months ended December 31, 2014, the Company granted approximately 10,000 time-based equity award units at a weighted-average grant date fair value of $89.43 per share under the 2006 Plan. During the nine months ended December 31, 2014, the Company granted approximately 143,000 NSUs at a weighted-average grant date fair value of $83.99 per share, as well as approximately 33,000 time-based equity award units at a weighted-average grant date fair value of $82.64 per share under the 2006 Plan. The NSUs will vest in equal one-third installments at the end of each of the three years after the performance goal has been achieved, and the time-based equity award units have no Company performance targets and will vest in equal annual installments over a three year period. The vesting schedule for these awards was established to encourage officers and key employees to remain

9

DECKERS OUTDOOR CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Three and Nine months ended December 31, 2014 and 2013

(Unaudited)

(amounts in thousands, except share quantity and per share data)

with the Company for the long-term. As of December 31, 2014, future unrecognized compensation cost for these NSUs and time-based equity award units, excluding estimated forfeitures, was approximately $9,200. As of December 31, 2014, the Company believed that the achievement of at least the threshold performance objective of the NSU awards was probable, and therefore recognized compensation expense accordingly for these awards.

On a quarterly basis, the Company grants fully-vested shares of its common stock to each of its outside directors.  The fair value of such shares is expensed on the date of issuance.

In September 2014, the Board of Directors of the Company approved a long-term incentive award (2015 LTIP Awards) under its 2006 Equity Incentive Plan. The shares under these awards will be available for issuance to current and future members of the Company's leadership team, including the Company's named executive officers. Each recipient will receive a specified maximum number of restricted stock units (RSUs), each of which will represent the right to receive one share of the Company's common stock. These awards vest subject to certain long-term performance objectives and certain long-term service conditions. The awards will vest on March 31, 2017 only if the Company meets certain revenue targets ranging between approximately $2,155,000 and approximately $2,447,000 and certain EBITDA targets ranging between approximately $336,000 and approximately $394,000 for the fiscal year ending March 31, 2017. No vesting of any 2015 LTIP Awards will occur if either of the threshold performance criteria is not met for the year ending March 31, 2017. To the extent financial performance is achieved above the threshold levels, the number of RSUs that will vest will increase up to the maximum number of units granted under the award. Under this new program, the Company granted awards that contain a maximum amount of approximately 160,000 RSUs during the nine months ended December 31, 2014. The average grant date fair value of these RSUs was $98.29 per share. As of December 31, 2014, future unrecognized compensation cost for the 2015 LTIP Awards, excluding estimated forfeitures, was approximately $6,800. As of December 31, 2014, based on the Company's current long-range forecast, the Company believed that the achievement of at least the threshold performance objectives of these awards was probable, and therefore the Company recognized compensation expense accordingly.

In June 2012, the Company approved a stock repurchase program to repurchase up to $200,000 of the Company’s common stock in the open market or in privately negotiated transactions, subject to market conditions, applicable legal requirements, and other factors.  The program does not obligate the Company to acquire any particular amount of common stock and the program may be suspended at any time at the Company’s discretion.  Under this program, during the three and nine months ended December 31, 2014 the Company repurchased approximately 157,000 shares, for approximately $13,300, or an average price of $84.69. Through December 31, 2014, the Company had repurchased approximately 2,922,000 shares under this program, for approximately $134,000, or an average price of $45.87 per share, leaving the remaining approved amount at approximately 66,000. Between January 1, 2015 and February 6, 2015, the Company repurchased approximately 468,000 shares under the stock repurchase program approved in June 2012 for approximately $34,000, or an average price of $72.55 per share, leaving the remaining approved amount at approximately $32,000.

Subsequent to December 31, 2014, the Company approved a new stock repurchase program to repurchase up to $200,000 of the Company’s common stock in the open market or in privately negotiated transactions, subject to market conditions, applicable legal requirements, and other factors. The program does not obligate the Company to acquire any particular amount of common stock and the program may be suspended at any time at the Company’s discretion.

Subsequent to December 31, 2014, the Company granted approximately 13,000 time-based equity award units at a weighted-average grant date fair value of $68.96 per share. Future unrecognized compensation cost for these awards, excluding estimated forfeitures, is approximately $900.

The following is a reconciliation of the Company’s retained earnings:

10

DECKERS OUTDOOR CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Three and Nine months ended December 31, 2014 and 2013

(Unaudited)

(amounts in thousands, except share quantity and per share data)

	Retained Earnings
Balance at March 31, 2014	$	743,815
Net income	160,374
Repurchase of common stock	(13,305		)
Balance at December 31, 2014	$	890,884

(7)  Foreign Currency Exchange Contracts and Hedging

As of December 31, 2014, the Company had no foreign currency forward contracts designated as cash-flow hedges and had no non-designated derivative contracts. At March 31, 2014, the Company had foreign currency forward contracts designated as cash-flow hedges with notional amounts totaling approximately $64,000, held by four counterparties.

The following table summarizes the effect of foreign exchange contracts designated as cash flow hedging relationships on the condensed consolidated financial statements:

For the Nine Months Ended  December 31,	Amount of Gain (Loss) Recognized in OCI/L on Derivative (Effective Portion)			Location of Gain (Loss) Reclassified from AOCI/L into Income (Effective Portion)	Reclassified from AOCI/L into Income (Effective Portion)		Location of Amount Excluded from Effectiveness Testing	Gain (Loss) from Amount Excluded from Effectiveness Testing
2014	$	2,053		Net sales	$	1,226	SG&A	$	(79	)
2013	$	(3,253	)	Net sales	$	17	SG&A	$	22

The following table summarizes the effect of foreign exchange contracts not designated as hedging instruments on the condensed consolidated financial statements:

For the Nine Months Ended  December 31,	Location of Gain (Loss) Recognized in Income (Loss) on Derivatives	Amount of Gain (Loss) Recognized in Income (Loss) on Derivatives
2014	SG&A	$	5,909
2013	SG&A	$	727

Subsequent to December 31, 2014, the Company entered into non-designated derivative contracts with notional amounts totaling approximately $54,000, held by five counterparties.

(8)Accumulated Other Comprehensive Loss

Accumulated balances of the components within accumulated other comprehensive loss were as follows:

	December 31, 2014			March 31, 2014
Unrealized loss on foreign currency hedging, net of tax	$	—		$	(759	)
Cumulative foreign currency translation adjustment, net of tax	(12,431		)	(1,284		)
Accumulated other comprehensive loss	$	(12,431	)	$	(2,043	)

(9)Net Income per Share

11

DECKERS OUTDOOR CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Three and Nine months ended December 31, 2014 and 2013

(Unaudited)

(amounts in thousands, except share quantity and per share data)

Basic net income per share represents net income divided by the weighted-average number of common shares outstanding for the period.  Diluted net income per share represents net income divided by the weighted-average number of common shares outstanding, including the dilutive impact of potential issuances of common stock.  The reconciliations of basic to diluted weighted-average common shares outstanding were as follows:

	Three Months Ended   December 31,		Nine Months Ended   December 31,
	2014	2013	2014	2013
Weighted-average shares used in basic computation	34,537,000	34,541,000	34,598,000	34,496,000
Dilutive effect of stock-based awards*	316,000	352,000	314,000	359,000
Weighted-average shares used for diluted computation	34,853,000	34,893,000	34,912,000	34,855,000

*Excluded NSUs	140,000	—	140,000	—
*Excluded RSUs	642,000	795,000	642,000	795,000
*Excluded stock appreciation rights (SARs)	525,000	525,000	525,000	525,000

* The share-based awards that were excluded from the dilutive effect were excluded because necessary conditions had not been satisfied for the shares to be issuable based on the Company’s performance through the three and nine months ended December 31, 2014 and 2013, respectively. The excluded awards include the maximum amounts achievable for these awards.

(10) Business Segments, Concentration of Business, and Credit Risk and Significant Customers

The Company’s accounting policies of the segments below are the same as those described in the summary of significant accounting policies in the Annual Report, except that the Company does not allocate corporate overhead costs or non-operating income and expenses to segments.  The Company evaluates segment performance primarily based on net sales and income (loss) from operations.  The Company’s reportable segments include the strategic business units for the worldwide wholesale operations of the UGG brand, Teva brand, Sanuk brand, and other brands, its E-Commerce business and its retail store business.  The wholesale operations of each brand are managed separately because each requires different marketing, research and development, design, sourcing, and sales strategies.  The E-Commerce and retail store segments are managed separately because they are Direct-to-Consumer sales, while the brand segments are wholesale sales.  The income (loss) from operations for each of the segments includes only those costs that are specifically related to each segment, which consist primarily of cost of sales, costs for research and development, design, selling and marketing, depreciation, amortization, and the costs of employees and their respective expenses that are directly related to each segment.  The unallocated corporate overhead costs include: costs of the distribution centers, certain executive and stock compensation, accounting and finance, legal, information technology, human resources, and facilities costs, among others. During the nine months ended December 31, 2014, the Company converted seven of its retail stores in China to partner retail stores, whereby, upon conversion, the stores became wholly-owned and operated by local, third party companies within China.  These conversions included the assignment of the lease and the sale of both the Company's on-hand inventory and store leasehold improvements to the operator.  As of the date of conversion, partner retail stores sales are included in the UGG brand wholesale segment and not included in the retail stores segment. During the three months ended September 30, 2014, certain operating expenses were classified as unallocated expenses and are now classified as segment expenses, as well as certain segment expenses that were classified in one segment are now classified in a different segment. This change in segment reporting only changed the presentation within the below table and did not impact the Company's condensed consolidated financial statements for any period. The segment information for the nine months ended December 31, 2014 has been adjusted retrospectively to conform to the current period presentation.

The Company’s other brands include Ahnu®, Hoka One One® (Hoka), MOZO® and TSUBO®.  The wholesale operations of the Company’s other brands are included as one reportable segment, other wholesale, presented in the figures below.  Business segment information is summarized as follows:

12

DECKERS OUTDOOR CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Three and Nine months ended December 31, 2014 and 2013

(Unaudited)

(amounts in thousands, except share quantity and per share data)

	Three Months Ended   December 31,						Nine Months Ended   December 31,
	2014			2013			2014			2013
Net sales to external customers:
UGG wholesale	$	401,702		$	399,628		$	815,694		$	735,671
Teva wholesale	12,373			14,189			65,641			58,830
Sanuk wholesale	17,763			19,974			66,047			64,409
Other wholesale	13,211			6,936			47,153			27,907
E-Commerce	146,871			117,300			183,902			142,920
Retail stores	192,758			178,021			297,983			263,121
	$	784,678		$	736,048		$	1,476,420		$	1,292,858
Income (loss) from operations:
UGG wholesale	$	135,893		$	128,909		$	261,614		$	210,655
Teva wholesale	(660		)	(1,258		)	3,812			(475		)
Sanuk wholesale	(282		)	1,085			9,307			11,231
Other wholesale	(4,522		)	(4,549		)	(9,104		)	(7,227		)
E-Commerce	67,006			53,536			75,256			57,883
Retail stores	74,302			67,328			51,979			55,250
Unallocated overhead costs	(57,156		)	(43,552		)	(169,182		)	(122,072		)
	$	214,581		$	201,499		$	223,682		$	205,245

Inter-segment sales from the Company’s wholesale segments to the Company’s E-Commerce and retail stores segments are at the Company’s cost, and there is no inter-segment profit on these inter-segment sales.  Income (loss) from operations of the wholesale segments does not include any inter-segment gross profit from sales to the E-Commerce and retail stores segments. 

Business segment asset information is summarized as follows:

	December 31, 2014		March 31, 2014
Total assets for reportable segments:
UGG wholesale	$	334,860	$	153,341
Teva wholesale	45,661		81,766
Sanuk wholesale	208,277		214,627
Other wholesale	53,625		41,281
E-Commerce	10,697		3,129
Retail stores	173,253		160,535
	$	826,373	$	654,679

The assets allocable to each segment include accounts receivable, inventory, fixed assets, goodwill, other intangible assets, and certain other assets that are specifically identifiable with one of the Company’s segments.  Unallocated assets are the assets not specifically related to the segments and include cash and cash equivalents, deferred tax assets, and various other assets shared by the Company’s segments.  Reconciliations of total assets from reportable segments to the condensed consolidated balance sheets are as follows:

13

DECKERS OUTDOOR CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Three and Nine months ended December 31, 2014 and 2013

(Unaudited)

(amounts in thousands, except share quantity and per share data)

	December 31, 2014		March 31, 2014
Total assets for reportable segments	$	826,373	$	654,679
Unallocated cash and cash equivalents	369,442		245,088
Unallocated deferred tax assets	37,523		38,933
Other unallocated corporate assets	183,503		125,504
Consolidated total assets	$	1,416,841	$	1,064,204

The Company does not consider international operations a separate segment, as management reviews such operations in the aggregate with the aforementioned segments. Long-lived assets, which consist of property and equipment, in the US and all other countries combined were as follows:

	December 31, 2014		March 31, 2014
US	$	180,484	$	148,178
All other countries*	35,571		36,392
Total	$	216,055	$	184,570

*  No other country’s long-lived assets comprised more than 10% of total long-lived assets as of December 31, 2014 and March 31, 2014.

The Company sells its products to customers throughout the US and to foreign customers located in Europe, Asia, Canada, Australia, and Latin America, among other regions.  International sales were 32.9% and 30.6% of the Company’s total net sales for the three months ended December 31, 2014 and 2013, respectively.  International sales were 35.8% and 33.5% of the Company’s total net sales for the nine months ended December 31, 2014 and 2013, respectively.  For the nine months ended December 31, 2014 and 2013, no single foreign country comprised more than 10% of total net sales.

Management performs regular evaluations concerning the ability of its customers to satisfy their obligations and records a provision for doubtful accounts based upon these evaluations.  No single customer accounted for more than 10% of net sales for either the nine months ended December 31, 2014 or 2013.  As of December 31, 2014, the Company had one customer representing 20.3% of net trade accounts receivable. As of March 31, 2014, the Company had one customer representing 11.8% of net trade accounts receivable, and a second customer representing 11.4% of net trade accounts receivable.

The Company’s production is concentrated at a limited number of independent contractor factories in Asia.  Sheepskin is the principal raw material for certain UGG products and the majority of sheepskin is purchased from two tanneries in China, which is sourced primarily from Australia and the United Kingdom (UK). The other materials used by the Company in production are sourced primarily in Asia. The Company’s operations are subject to the customary risks of doing business abroad, including, but not limited to, currency fluctuations, customs duties and related fees, various import controls and other nontariff barriers, restrictions on the transfer of funds, labor unrest and strikes and, in certain parts of the world, political instability.  The supply of sheepskin can be adversely impacted by weather conditions, disease, and harvesting decisions that are completely outside the Company’s control.  Further, the price of sheepskin is impacted by demand, industry, and competitors.

A portion of the Company’s cash and cash equivalents are held as cash in operating accounts that are with third party financial institutions.  These balances, at times, exceed the Federal Deposit Insurance Corporation insurance limits.  While the Company regularly monitors the cash balances in its operating accounts and adjusts the balances as appropriate, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. 

14

DECKERS OUTDOOR CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Three and Nine months ended December 31, 2014 and 2013

(Unaudited)

(amounts in thousands, except share quantity and per share data)

The remainder of the Company’s cash equivalents is invested in interest bearing funds managed by third party investment management institutions.  These investments can include US treasury bonds and securities, money market funds, and municipal bonds, among other investments. Certain of these investments are subject to general credit, liquidity, market, and interest rate risks.  Investment risk has been and may further be exacerbated by US mortgage defaults, credit and liquidity issues, and sovereign debt concerns in Europe, which have affected various sectors of the financial markets.  As of December 31, 2014, the Company had experienced no loss or lack of access to cash in its operating accounts, invested cash, and cash equivalents.  The Company’s cash and cash equivalents are as follows:

	December 31, 2014		March 31, 2014
Money market fund accounts	$	203,339	$	143,816
Cash	166,103		101,272
Total Cash and Cash Equivalents	$	369,442	$	245,088

15

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

This report and the information incorporated by reference in this report contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that concern matters that involve risks and uncertainties that could cause actual results to differ materially from those anticipated or projected in the forward-looking statements.  These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995.  All statements other than statements of historical fact contained in this interim report, including statements regarding future events, our future financial performance, our future business strategy and the plans and objectives of management for future operations, are forward-looking statements. We have attempted to identify forward-looking statements by using words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “project,” ‘plan”, “predict”, “should,” “will,” and similar expressions, or the negative of these expressions, as they relate to us, our management and our industry.  Specifically, this report and the information incorporated by reference in this report contain forward-looking statements relating to, among other things:

• our global business, growth, operating, investing, and financing strategies;

• our product, distribution channel, and geographic mix;

• the success of new products, new brands, and other growth initiatives;

• the impact of seasonality on our operations;

• expectations regarding our net sales and earnings growth and other financial metrics;

• our development of worldwide distribution channels;

• trends affecting our financial condition, results of operations, or cash flows;

• our expectations for expansion of our retail and E-Commerce capabilities;

• information security and privacy of customer, employee or company information;

• overall global economic trends;

• reliability of overseas factory production and storage; and

• the availability and cost of raw materials.

We have based our forward-looking statements on our current expectations and projections about trends affecting our business and industry and other future events.  Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy.

Some of the risks, uncertainties and assumptions that may cause actual results to differ from these forward-looking statements are described in Part II, Item 1A of this interim report in the section entitled “Risk Factors,” as well as in our other filings with the Securities and Exchange Commission (SEC).  In addition, actual results may differ as a result of additional risks and uncertainties of which we are currently unaware or which we do not currently view as material to our business.  We operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and we cannot predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. As a result, actual results may differ materially from the results stated in or implied by our forward-looking statements.  Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements, which reflect our opinions only as of the date of this quarterly report, as a prediction of actual results.

You should read this report in its entirety, together with our Annual Report on Form 10-K for the fiscal year (FY) ended December 31, 2013 filed with the SEC on March 3, 2014 (Annual Report), and the documents that we file as exhibits to these reports and the documents that we incorporate by reference in these reports, with the understanding that our future results may be materially different from what we currently expect.  We qualify all of our forward-looking statements by these cautionary statements and we

16

expressly disclaim any intent or obligation to update any forward-looking statements after the date hereof to conform such statements to actual results or to changes in our opinions or expectations, except as required by applicable law or the rules of the New York Stock Exchange.

References to “Deckers,” “we,” “us,” “our,” or similar terms refer to Deckers Outdoor Corporation together with its consolidated subsidiaries.  Unless otherwise specifically indicated, all amounts herein are expressed in thousands, except for share quantity, per share data, and selling prices per pair.  The following discussion of our financial condition and results of operations should be read together with our condensed consolidated financial statements and the accompanying notes to those statements included elsewhere in this document.

Overview

We are a global leader in designing, marketing and distributing innovative footwear, apparel and accessories developed for both everyday casual lifestyle use and high performance activities.  We market our products primarily under three proprietary brands:

• UGG®: Premier brand in luxurious comfort footwear, handbags, apparel, home and cold weather accessories;

• Teva®: Born from the outdoors, active lifestyle footwear for the adventurous spirit; and

• Sanuk®: Innovative action sport footwear brand rooted in the surf community.

In addition to our primary brands, our other brands include Ahnu®, an authentic performance footwear brand that makes footwear for fashion-minded people who prefer trails, yoga mats, and hybrid fitness workouts; Hoka One One® (Hoka), a line of footwear for all capacities of runner designed with a unique performance midsole geometry, oversized midsole volume and active foot frame; MOZO®, a line of footwear crafted for culinary professionals that redefines the industry dress code; and TSUBO®, a line of mid and high-end dress and dress casual comfort footwear that incorporates style and function with maximum comfort.

We sell our brands through quality domestic retailers and international distributors and retailers, as well as directly to our end-user consumers through our E-Commerce business and our retail stores. Independent third parties manufacture all of our products.

Our business has been impacted by, what we believe are, several important trends and we expect that it will continue to be impacted:

• Sales of our products are highly seasonal and are sensitive to weather conditions, which are beyond our control.  Even though we are creating more year-round styles for our brands, the effect of favorable or unfavorable weather on sales can be significant.

• Continuing uncertainty surrounding US and global economic conditions has adversely impacted businesses worldwide. Some of our customers have been, and more may be, adversely affected, which in turn has, and may continue to, adversely impact our financial results.

• The sheepskin used in certain UGG products is in high demand and limited supply, and there have been significant fluctuations in the price of sheepskin over the years as the demand from competitors for this material has changed. However, our sheepskin costs are expected to decrease for the fiscal year ending March 31, 2015 compared to the trailing twelve months ended March 31, 2014 due to lower pricing negotiated through our sheepskin contracts.

• Our use of UGGpure^TM, real wool woven into a durable backing used as an alternative to table grade sheepskin, in select products, primarily in linings and footbeds, continues to grow.

• The markets for casual, outdoor, and athletic footwear have grown significantly during the last decade. We believe this growth is a result of the trend toward casual dress in the workplace, increasingly active outdoor lifestyles, and a growing emphasis on comfort.

• Consumers are more often seeking footwear designed to address a broader array of activities with the same quality, comfort, and high performance attributes they have come to expect from traditional athletic footwear.

• Consumers have narrowed their footwear product breadth, focusing on brands with a rich heritage and authenticity as market category creators and leaders.

17

• Consumers have become increasingly focused on luxury and comfort, seeking out products and brands that are fashionable while still comfortable.

• There is an emerging sustainable lifestyle movement happening all around the world, and consumers are demanding that brands and companies become more environmentally and socially responsible.

• Consumers are following a recent trend of buy now, wear now. This trend entails the consumer waiting to purchase shoes until they will actually wear them, contrasted with a tendency in the past to purchase shoes they did not plan to wear until later.

By emphasizing our brands' images and our focus on comfort, performance and authenticity, we believe we can continue to maintain a loyal consumer following that is less susceptible to fluctuations caused by changing fashions and changes in consumer preferences. We have also responded to consumer focus on sustainability by establishing objectives, policies, and procedures to help us drive key sustainability initiatives around human rights, environmental sustainability, and community affairs.

We have experienced significant cost fluctuations, most over the past several years, notably with respect to sheepskin. We attempt to cover the full amount of our sheepskin purchases under fixed price contracts. We continually strive to contain our material costs through increasing the mix of non-sheepskin products, exploring new footwear materials and new production technologies, and utilizing lower cost production. Also, refer to Part I, Item 3. Quantitative and Qualitative Disclosures about Market Risk for further discussion of our commodity price risk.

Below is an overview of the various components of our business, including some key factors that affect each business and some of our strategies for growing each business.

UGG Brand Overview

The UGG brand is one of the most iconic and recognized brands in the global footwear industry and highlights our successful track record of building niche brands into lifestyle market leaders. With loyal consumers around the world the UGG brand has proven to be a highly resilient line of premium footwear, with an expanding product offering and a growing global audience that attracts women, men and children. UGG brand footwear continually earns media exposure from numerous outlets both organically and from strategic public relations efforts, including an increasing amount of exposure internationally. The UGG brand has invested in creating holistic, impactful integrated campaigns across paid, earned and owned media channels, including mobile, digital, social, out-of-home (OOH) and print, which are globally scalable, contributing to broader public awareness of the brand.

We believe the increased global media focus and demand for UGG products has been driven by the following:

• High consumer brand loyalty, due to over 35 years of delivering quality and luxuriously comfortable UGG footwear;

• Continued innovation of new product categories and styles, including those beyond footwear such as loungewear, handbags, cold-weather accessories and a new home offering;

• A more robust footwear offering, including transitional product that bridges the seasons between spring and fall;

• Expanded slipper category showing incremental growth with added styles for both women and men;

• Growing Direct-to-Consumer platform and enhanced OmniChannel capabilities that enable us to increasingly engage existing and prospective consumers in a more connected environment to introduce our evolving product lines;

• Product customization with our UGG by You program allows for a deeper connection with the brand and products;

• Focus on mobile consumers with responsive site design, providing shoppers access to the brand from their mobile device;

• Year-round holistic paid advertising approach for women, men and kids in targeted digital, high-end print, OOH, digital and across multiple social platforms;

• Holiday and winter focused advertising campaign to drive important seasonal sales;

• Continued creation of targeted UGG for Men campaigns featuring brand ambassador Tom Brady;

18

• Targeted E-Commerce based marketing to existing and prospective consumers through integrated outreach including email blasts, interactive site design and search engine optimization based content;

• Continued partnership with high-end retailers such as Nordstrom;

• Expanded product assortments from existing accounts;

• Adoption by high-profile celebrities as a favored footwear brand;

• Continued media attention that has enabled us to introduce the brand to consumers much faster than we would have otherwise been able to;

• Increased exposure to the brand driven by our concept stores that showcase all of our product offerings; and

• Continued expansion of worldwide retail through new UGG stores.

We believe the luxurious comfort of UGG products will continue to drive long-term consumer demand. Recognizing that there is a significant fashion element to UGG footwear and that footwear fashions fluctuate, our key strategies include presenting UGG as a year-round global, premium lifestyle brand with a broad product line suitable for wear in a variety of climates and occasions and limiting distribution to select higher-end retailers. As part of this strategic approach, we have increased our product offering, including growing transitional collections and our spring line, an expanded men’s line, a fall line that consists of a range of luxurious collections for both genders, an expanded kids’ line, as well as home, handbags, cold weather accessories, and apparel. An additional key strategy is to grow casual boots by expanding retail offerings in women's casual boots and cold weather products. We have also recently expanded our marketing and promotional efforts, which we believe has contributed, and will continue to contribute, to our growth. We believe that the evolution of the UGG brand and our strategy of product diversification will also help decrease our reliance on sheepskin, which is in high demand and subject to price volatility. Nonetheless, we cannot assure investors that our efforts will continue to provide UGG brand growth.

Teva Brand Overview

For 30 years Teva has fueled the expression of freedom through the adventure lifestyle around the globe. Teva pioneered the sport sandal category in 1984 and today our mission remains steadfast: to enable spontaneous adventure with versatile, utility-centered footwear for active consumers. By designing simple, functional footwear, Teva is driving growth by extending our established global platforms in sandals and water-related products and by leveraging our authenticity with active lifestyle consumers.

We believe that Teva’s Originals collection is a key platform in driving market penetration for the brand. The Originals Collection honors the heritage of Teva by revamping the styles the brand was founded on, blending their original simplicity with modern sophistication. In the US, our focus will be to bolster our leadership position in sandals and grow our market share through casual category extensions. Globally, we seek to establish the Originals collection as a beachhead for the Teva brand across warm-weather climates.

Within the US, we expect that Teva will grow its position as a market leader within the sport sandal category. Growth opportunities within our current core channels of distribution - outdoor specialty, sporting goods, and family footwear retail chains - will be pursued through deepening penetration with evolved and expanded product offerings. Teva plans to support its channel expansion beyond present distribution with focused investments in targeted, solution-driven marketing programs in order to attract new lifestyle consumers to the brand. However, we cannot assure investors that these efforts will be successful.

Sanuk Brand Overview

The Sanuk brand was founded 16 years ago, and from its origins in the Southern California surf culture, has grown into a global brand with an expanding fanbase and growing presence in the casual sneaker and sandal categories. The Sanuk brand’s use of unexpected materials and unconventional constructions combined with its fun and funky branding has contributed to the brand’s identity and growth since its inception, and led to successful products such as the Yoga Mat^TM sandal collection and the patented SIDEWALK SURFERS®.  We believe that the Sanuk brand provides substantial growth opportunities, especially within the casual sneaker markets, supporting our strategic initiatives spanning new product launches, OmniChannel development and global expansion.  However, we cannot assure investors that our efforts to grow the brand will be successful.

Other Brands Overview

Our other brands consist of Ahnu, Hoka, MOZO and TSUBO. Our other brands are all sold through most of our distribution channels, with the majority sold through wholesale channels.

19

Ahnu is an authentic performance footwear brand that makes footwear for fashion-minded people who prefer trails, yoga mats, and hybrid fitness workouts.  Ahnu's products feature après-yoga styling, innovative trail and city hikers, and everyday casual shoes and sandals.  Ahnu’s go-anywhere approach blurs the lines between performance and fashion through modern color and material stories infused with Numentum® performancetechnology.

The Hoka brand focuses on designing shoes with a unique performance midsole geometry, oversized midsole volume and an active foot frame. We believe runners from around the world are experiencing the benefits of Hoka brand products. These shoes are used by marathon runners, and even ultra-marathon runners as well as every day runners to enjoy running.

With respect to Ahnu and Hoka, we expect to leverage our design, marketing, and distribution capabilities to continue to grow them over the next several years, consistent with our mission to build niche brands into global market leaders. Nevertheless, we cannot assure investors that our efforts to grow these brands will be successful.

With respect to MOZO and TSUBO, we recently made the decision to seek strategic alternatives for these businesses.

E-Commerce Overview

Our E-Commerce business, which sells all of our brands, allows us to build our relationship with the consumer and is a key component of our integrated OmniChannel strategy. E-Commerce enables us to meet the growing demand for our products, sell the products at retail prices, and provide significant incremental operating income. The E-Commerce business provides us an opportunity to communicate to the consumer with a consistent brand message that is in line with our brands' promises, drives awareness of key brand initiatives, and offers targeted information to specific consumer segments. Our websites also drive wholesale and distributor sales through brand awareness and directing consumers to retailers that carry our brands, including our own retail stores. In recent years, our E-Commerce business has had significant revenue growth, much of which occurred as the UGG brand gained popularity and as consumers continued to increase internet usage for footwear and other purchases.

Managing our E-Commerce business requires us to focus on the latest trends and techniques for web design and marketing, to generate internet traffic to our websites, to effectively convert website visits into orders, and to maximize average order sizes. We plan to continue to grow our E-Commerce business through improved website features and performance, increased marketing, expansion into more international markets, and utilization of mobile and tablet technology. Nevertheless, we cannot assure investors that revenue from our E-Commerce business will continue to grow.

Retail Stores Overview

Our retail stores are predominantly UGG concept stores and UGG outlet stores. In 2013 we expanded our fleet and opened our first Sanuk (two concept, one outlet) stores. Our retail stores enable us to directly impact our customers' experience, meet the growing demand for these products, sell the products at retail prices and generate strong annual operating income. In addition, our UGG concept stores allow us to showcase our entire product line including footwear, accessories, handbags, home, outerwear, lounge and retail exclusive items; whereas, a wholesale account may not represent all of these categories. Through our outlet stores, we sell some of our discontinued styles from prior seasons, as well as full price in-line product, and products made specifically for the outlet stores. Within our OmniChannel strategy, we believe that consumers try on product in our retail stores, perform further online research and order product online and, conversely, E-Commerce fuels our retail locations. As a result, we believe that our stores and websites are interconnected in a way that will allow us to view them on a combined basis. Further, our stores will allow the consumer to buy through our E-Commerce channel using internet capable devices in our stores.

As of December 31, 2014, we had a total of 138 retail stores worldwide. These stores are company-owned and operated. During the remainder of fiscal year 2015, we plan to open additional retail stores worldwide.  During the nine months ended December 31, 2014, we converted seven of our retail stores in China to partner retail stores, whereby, upon conversion, the stores became wholly-owned and operated by local, third party companies within China.  These conversions included the assignment of the lease and the sale of both our on-hand inventory and store leasehold improvements to the operator.  As of the date of conversion, partner retail stores sales are included in our UGG brand wholesale segment and not included in our retail stores segment.

Seasonality

Our business is seasonal, with the highest percentage of UGG brand net sales occurring in the quarters ending September 30 and December 31 and the highest percentage of Teva and Sanuk brand net sales occurring in the quarters ending March 31 and June 30 of each year.  Our other brands do not have a significant seasonal impact.

In February 2014, our Board of Directors approved a change in our fiscal year end from December 31 to March 31. The change is intended to better align our planning, financial and reporting functions with the seasonality of our business.

20

The following table summarizes our quarterly net sales and (loss) income from operations:

	FY 2015
	Quarter Ended June 30, 2014			Quarter Ended September 30, 2014		Quarter Ended December 31, 2014		Quarter Ending March 31, 2015
Net sales	$	211,469		$	480,273	$	784,678
(Loss) Income from operations	$	(50,482	)	$	59,583	$	214,581

				CY 2013				FY 2014
	Quarter Ended June 30, 2013			Quarter Ended September 30, 2013		Quarter Ended December 31, 2013		Quarter Ended March 31, 2014
Net sales	$	170,085		$	386,725	$	736,048	$	294,716
(Loss) Income from operations	$	(42,751	)	$	46,497	$	201,499	$	(408	)

With the large growth in the UGG brand over the past several years, net sales in the quarters ending September 30 and December 31 have exceeded net sales in the quarters ending March 31 and June 30.  We currently expect this trend to continue.  Nonetheless, actual results could differ materially depending upon consumer preferences, availability of product, competition, and our wholesale and distributor customers continuing to carry and promote our various product lines, among other risks and uncertainties.

Results of Operations

Three Months Ended December 31, 2014 Compared to Three Months Ended December 31, 2013

The following table summarizes our results of operations:

	Three Months Ended December 31,
	2014				2013				Change
	Amount		%		Amount		%		Amount			%
Net sales	$	784,678	100.0	%	$	736,048	100.0	%	$	48,630		6.6	%
Cost of sales	369,539		47.1		359,848		48.9		9,691			2.7
Gross profit	415,139		52.9		376,200		51.1		38,939			10.4
Selling, general and administrative expenses	200,558		25.5		174,701		23.7		25,857			14.8
Income from operations	214,581		27.4		201,499		27.4		13,082			6.5
Other expense, net	1,265		0.2		1,102		0.2		163			14.8
Income before income taxes	213,316		27.2		200,397		27.2		12,919			6.4
Income tax expense	56,610		7.2		59,500		8.1		(2,890		)	(4.9	)
Net income	$	156,706	20.0	%	$	140,897	19.1	%	$	15,809		11.2	%

Overview.  Overall net sales increased for all distribution channels of all segments, except for the Sanuk and Teva brands wholesale sales. The increase in income from operations resulted from increased sales and gross margin, partially offset by higher selling, general and administrative expenses (SG&A).

21

Net Sales.  The following tables summarize net sales by location, brand, and distribution channel:

	Three Months Ended December 31,
					Change
	2014		2013		Amount			%
Net sales by location:
US	$	526,315	$	510,693	$	15,622		3.1	%
International	258,363		225,355		33,008			14.6
Total	$	784,678	$	736,048	$	48,630		6.6	%
Net sales by brand and distribution channel:
UGG:
Wholesale	$	401,702	$	399,628	$	2,074		0.5	%
E-Commerce	142,586		114,240		28,346			24.8
Retail stores	191,711		177,015		14,696			8.3
Total	735,999		690,883		45,116			6.5
Teva:
Wholesale	12,373		14,189		(1,816		)	(12.8	)
E-Commerce	1,097		1,071		26			2.4
Retail stores	169		249		(80		)	(32.1	)
Total	13,639		15,509		(1,870		)	(12.1	)
Sanuk:
Wholesale	17,763		19,974		(2,211		)	(11.1	)
E-Commerce	1,917		1,613		304			18.8
Retail stores	797		656		141			21.5
Total	20,477		22,243		(1,766		)	(7.9	)
Other:
Wholesale	13,211		6,936		6,275			90.5
E-Commerce	1,271		376		895			238.0
Retail stores	81		101		(20		)	(19.8	)
Total	14,563		7,413		7,150			96.5
Total	$	784,678	$	736,048	$	48,630		6.6	%
Total E-Commerce	$	146,871	$	117,300	$	29,571		25.2	%
Total Retail stores	$	192,758	$	178,021	$	14,737		8.3	%

In order to provide a framework for assessing how our underlying businesses performed, excluding the effect of foreign currency rate fluctuations, we provide certain financial information on a “constant currency basis,” which is in addition to the actual financial information presented. In order to calculate our constant currency information, we translate the current period financial information using the foreign currency exchange rates that were in effect during the previous comparable period. However, constant currency measures should not be considered in isolation or as an alternative to US dollar measures that reflect current period exchange rates, or to other financial measures calculated and presented in accordance with US generally accepted accounting principles.

The increase in overall net sales was primarily due to an increase in our UGG brand sales through our E-Commerce sites and retail stores as well as an increase in our other brands and UGG brand wholesale sales. These increases in net sales were slightly offset by decreases in Sanuk and Teva brand sales through the wholesale channel. On a constant currency basis, net sales increased 8.2% to approximately $796,000. We experienced an increase in the number of pairs sold in the E-Commerce, retail and other brands wholesale segments, partially offset by a decrease in the number of pairs sold in the Teva brand, Sanuk brand and UGG brand wholesale segments.  This resulted in an increase in the overall volume of footwear sold for all brands of 3.2% to approximately 9.6 million pairs sold for the three months ended December 31, 2014 from approximately 9.3 million pairs for the three months ended December 31, 2013. 

22

Wholesale net sales of our UGG brand were comparable to the prior year period.  On a constant currency basis, wholesale sales of our UGG brand increased 1.7% to approximately $406,000.

Wholesale net sales of our Teva brand decreased primarily due to a decrease in the volume of pairs sold, partially offset by an increase in the weighted-average wholesale selling price per pair.  The increase in average selling price was primarily due to a shift in product mix. For Teva wholesale net sales, the decrease in volume had an impact of approximately $2,000 and the increase in average selling price had an impact of approximately $1,000.

Wholesale net sales of our Sanuk brand decreased primarily due to a decrease in the weighted-average wholesale selling price per pair as well as a decrease in the volume of pairs sold. The decrease in average selling price was primarily due to a shift in product mix.  For Sanuk wholesale net sales, the decrease in average selling price had an impact of approximately $1,000 and the decrease in the volume of pairs sold had an impact of approximately $1,000.

Wholesale net sales of our other brands increased primarily due to an increase in the weighted-average wholesale selling price per pair as well as an increase in the volume of pairs sold. The increase in the average selling price was primarily due to a shift in product mix. For other brand wholesale net sales, the increase in average selling price had an impact of approximately $3,000 and the increase in volume of pairs sold had an impact of approximately $3,000.

Net sales of our E-Commerce business increased primarily due to an increase in the number of pairs sold, partially offset by a decrease in the weighted-average selling price per pair. The decrease in the average selling price was primarily due to a shift in product mix and increased sales discounts. For E-Commerce net sales, the increase in volume had an impact of approximately $36,000 and the decrease in average selling price had an impact of approximately $5,000.

Net sales of our retail store business, which are primarily UGG brand sales, increased largely due to the addition of new stores opened since December 31, 2013, partially offset by the negative impact of foreign currency exchange rate fluctuations. On a constant currency basis, net sales of our retail store business increased by 11.2% to approximately $198,000. A large majority of the new stores were in the US and China, with the remaining new stores in Japan, Canada, Hong Kong and Europe. Same store sales for the thirteen weeks ended December 28, 2014 decreased by 7.2% compared to the same period in 2013.  The decrease in same store sales is primarily due to a shift in product mix whereby we sold more casual styles, which generally carry lower price points, as compared to the prior year period, as well as a shift in sales of our Classic styles to online from in-store. For retail same store sales, we experienced a decrease in the weighted-average selling price which had an impact of approximately $8,000 on retail store net sales and a decrease in the volume of pairs sold which had an impact of approximately $2,000 on retail store net sales. As we continue to increase the number of retail stores, each new store will have less significant impact on our growth rate.

International sales, which are included in the segment sales above, for all of our products combined increased by 14.6% for the three months ended December 31, 2014 as compared to the three months ended December 31, 2013. On a constant currency basis, international sales increased by 19.8% to approximately $270,000. International sales represented 32.9% and 30.6% of worldwide net sales for the three months ended December 31, 2014 and 2013, respectively.  The increase in international sales as a percentage of worldwide net sales was primarily due to the continued growth in our UGG brand internationally across all channels of approximately $36,000.

Foreign income before income taxes was $73,001 and $47,902 and worldwide income before income taxes was $213,316 and $200,397 for the three months ended December 31, 2014 and 2013, respectively. Foreign income before income taxes represented 34.2% and 23.9% of worldwide income before income taxes for the three months ended December 31, 2014 and 2013, respectively. The increase in foreign income before income taxes as a percentage of worldwide income before income taxes was primarily due to the increase in international sales as well as a decrease in domestic income before income taxes, partially offset by an increase in foreign operating expenses of approximately $7,000. The increase in foreign operating expenses were primarily related to the expansion of our international retail and E-Commerce operations.

We expect that our foreign income before income taxes will continue to fluctuate from year to year based on several factors, including our expansion initiatives. In addition, we believe that the continued evolution and geographic scope of the UGG brand, our continuing strategy of enhancing product diversification, and our expected growth in our international retail and E-Commerce business, will result in increases in foreign income before income taxes as a percentage of worldwide income before income taxes in future years.

Gross Profit.  As a percentage of net sales, gross margin increased primarily due to increased margins of 2.6 percentage points from our UGG brand wholesale segment.  The increase in our UGG brand wholesale segment gross margin was due in part to our acquisition of our distributor in Germany.  An increase in the mix of retail and E-Commerce sales, which generally carry higher margins than our wholesale segments, contributed approximately 50 basis points to the increase in the overall gross margin. 

23

Additionally, closeout sales decreased as a percentage of overall sales and had higher margins compared with the same period last year.  These factors were partially offset by decreased margins of 2.5 percentage points from our E-Commerce segment primarily due to increased discounts and promotions compared to the same period last year.  The factors discussed above include the negative impact of foreign currency exchange rate fluctuations. Our gross margins fluctuate based on several factors, and we expect our gross margin to increase for the fiscal year ending March 31, 2015 compared to the fiscal year ended December 31, 2013, primarily due to the factors discussed above as well as reductions in average sheepskin prices.

Selling, General and Administrative (SG&A) Expenses.  The change in SG&A expenses was primarily due to:

• increased E-Commerce costs of approximately $6,000, largely related to the expansion of our E-Commerce business and increased expenses related to marketing and advertising;

• expenses of approximately $4,000 related to the negative impact of foreign currency exchange rate fluctuations in the current year, compared to approximately $2,000 of benefit related to the positive impact of foreign currency exchange rate fluctuations in the prior year;

• increased expenses of approximately $5,000 for marketing and promotions, largely related to the UGG and Hoka brands;

• increased retail costs of approximately $4,000, largely related to new retail stores that were not open as of December 31, 2013 and related corporate infrastructure; and

• increased distribution center costs of approximately $3,000, largely driven by the increase in sales and our new distribution center.

Income (Loss) from Operations.  Refer to note 10 to our accompanying condensed consolidated financial statements for a discussion of our reportable segments.  The following table summarizes operating income (loss) by segment:

	Three Months Ended December 31,
							Change
	2014			2013			Amount			%
UGG wholesale	$	135,893		$	128,909		$	6,984		5.4	%
Teva wholesale	(660		)	(1,258		)	598			47.5
Sanuk wholesale	(282		)	1,085			(1,367		)	(126.0	)
Other wholesale	(4,522		)	(4,549		)	27			0.6
E-Commerce	67,006			53,536			13,470			25.2
Retail stores	74,302			67,328			6,974			10.4
Unallocated overhead costs	(57,156		)	(43,552		)	(13,604		)	(31.2	)
Total	$	214,581		$	201,499		$	13,082		6.5	%

Income from operations increased primarily due to the increase in sales and gross margin, partially offset by the increase in SG&A expenses and the negative impact of foreign currency exchange rate fluctuations.  On a constant currency basis, income from operations increased by 8.0% to approximately $218,000.

The increase in income from operations of UGG brand wholesale was primarily the result of a 2.6 percentage point increase in gross margin, partially offset by an increase in operating expenses of approximately $4,000 and includes the negative impact of foreign currency exchange rate fluctuations. The increase in gross margin was primarily due to a greater mix of higher margin wholesale sales compared to lower margin distributor sales, due in part to our acquisition of our distributor in Germany, as well as a decreased impact from closeout sales. The increase in operating expenses was primarily due to amortization expense from our purchase of intangible assets. On a constant currency basis, income from operations of UGG brand wholesale increased 6.4% to approximately $137,000.

The decrease in loss from operations of Teva brand wholesale was primarily the result of a decrease in operating expenses of approximately $1,000. 

24

Sanuk brand wholesale had a loss from operations for the three months ended December 31, 2014, compared to income from operations for the three months ended December 31, 2013. This change was primarily the result of the decrease in net sales.

Loss from operations of our other brands wholesale was comparable to the prior year period.

The increase in income from operations of our E-Commerce business was primarily due to the increase in net sales, partially offset by a 2.5 percentage point decrease in gross margin as well as an increase in operating expenses of approximately $3,000. The decrease in gross margin was primarily due to increased sales discounts. The increase in operating expenses was primarily due an increase of approximately $6,000 largely related to expansion and marketing costs. The increase in operating expenses of approximately $3,000 includes the positive impact of foreign currency exchange rate fluctuations in the current year of approximately $2,000 compared to the negative impact of foreign currency exchange rate fluctuations of approximately $1,000 in the prior year.

Income from operations of our retail store business, which primarily relates to the UGG brand, increased primarily due to the increase in net sales, partially offset by increased operating expenses of approximately $4,000, and includes the negative impact of foreign currency exchange rate fluctuations. The increase in operating expenses was primarily due to our new store openings and related corporate infrastructure. On a constant currency basis, income from operations of our retail store business increased 13.0% to approximately $76,000.

The increase in unallocated overhead costs was primarily due to expense related to the negative impact of foreign currency exchange rate fluctuations of approximately $6,000 in the current year compared to a benefit related to the positive impact of foreign currency exchange rate fluctuations of approximately $3,000 in the prior year, as well as increased distribution center costs of approximately $3,000.

Other Expense, Net.  Other expense, net was comparable to the prior period.

Income Taxes. Income taxes for the interim periods are computed using the effective tax rate estimated to be applicable for the full fiscal year, which is subject to ongoing review and evaluation by management and can vary from quarter to quarter. Income tax expense and effective income tax rates were as follows:

	Three Months Ended   December 31,
	2014			2013
Income tax expense	$	56,610		$	59,500
Effective income tax rate	26.5		%	29.7		%

The decrease in the effective tax rate was primarily due to a change in the jurisdictional mix of expected annual pre-tax income.  Unremitted earnings of non-US subsidiaries are expected to be reinvested outside of the US indefinitely.  Such earnings would become taxable upon the sale or liquidation of these subsidiaries or upon the remittance of dividends.  As of December 31, 2014, we had approximately $136,000 of cash and cash equivalents outside the US that would be subject to additional income taxes if it were to be repatriated. We anticipate our effective tax rate for the fiscal year ending March 31, 2015 to be lower than the full year rate of 29.1% for the fiscal year ended December 31, 2013. 

Net Income.  Our net income increased as a result of the items discussed above. Our diluted earnings per share increased primarily due to the increase in net income as well as a reduction in the diluted weighted-average common shares outstanding. The reduction in the diluted weighted-average common shares outstanding was the result of our share repurchases made during the three months ended December 31, 2014. The weighted-average impact of the share repurchases was a reduction of approximately 100,000 shares.

Nine Months Ended December 31, 2014 Compared to Nine Months Ended December 31, 2013

The following table summarizes our results of operations:

25

	Nine Months Ended December 31,
	2014				2013				Change
	Amount		%		Amount		%		Amount		%
Net sales	$	1,476,420	100.0	%	$	1,292,858	100.0	%	$	183,562	14.2	%
Cost of sales	750,636		50.8		679,934		52.6		70,702		10.4
Gross profit	725,784		49.2		612,924		47.4		112,860		18.4
Selling, general and administrative expenses	502,102		34.0		407,679		31.5		94,423		23.2
Income from operations	223,682		15.2		205,245		15.9		18,437		9.0
Other expense, net	3,494		0.3		2,198		0.2		1,296		59.0
Income before income taxes	220,188		14.9		203,047		15.7		17,141		8.4
Income tax expense	59,814		4.0		58,365		4.5		1,449		2.5
Net income	$	160,374	10.9	%	$	144,682	11.2	%	$	15,692	10.8	%

Overview.  Overall net sales increased for all distribution channels of all segments.  The increase in income from operations resulted from increased sales and gross margin, partially offset by higher SG&A expenses.

26

Net Sales.  The following tables summarize net sales by location, brand, and distribution channel:

	Nine Months Ended December 31,
					Change
	2014		2013		Amount		%
Net sales by location:
US	$	947,665	$	859,581	$	88,084	10.2	%
International	528,755		433,277		95,478		22.0
Total	$	1,476,420	$	1,292,858	$	183,562	14.2	%
Net sales by brand and distribution channel:
UGG:
Wholesale	$	815,694	$	735,671	$	80,023	10.9	%
E-Commerce	166,140		131,226		34,914		26.6
Retail stores	294,605		261,402		33,203		12.7
Total	1,276,439		1,128,299		148,140		13.1
Teva:
Wholesale	65,641		58,830		6,811		11.6
E-Commerce	7,434		5,570		1,864		33.5
Retail stores	561		380		181		47.6
Total	73,636		64,780		8,856		13.7
Sanuk:
Wholesale	66,047		64,409		1,638		2.5
E-Commerce	6,778		5,159		1,619		31.4
Retail stores	2,619		1,166		1,453		124.6
Total	75,444		70,734		4,710		6.7
Other:
Wholesale	47,153		27,907		19,246		69.0
E-Commerce	3,550		965		2,585		267.9
Retail stores	198		173		25		14.5
Total	50,901		29,045		21,856		75.2
Total	$	1,476,420	$	1,292,858	$	183,562	14.2	%
Total E-Commerce	$	183,902	$	142,920	$	40,982	28.7	%
Total Retail stores	$	297,983	$	263,121	$	34,862	13.2	%

The increase in overall net sales was primarily due to an increase in our UGG brand sales through our wholesale channel, E-Commerce sites and retail stores as well as increases in our other brands and Teva brand wholesale sales. On a constant currency basis, net sales increased 14.8% to approximately $1,485,000. We experienced an increase in the number of pairs sold across all segments.  This resulted in an increase in the overall volume of footwear sold for all brands of 13.5% to approximately 22.7 million pairs sold for the nine months ended December 31, 2014 from 20.0 million pairs for the nine months ended December 31, 2013.

Wholesale net sales of our UGG brand increased primarily due to an increase in the volume of pairs sold as well as an increase in the weighted-average wholesale selling price per pair.  On a constant currency basis, wholesale sales of our UGG brand increased 11.2% to approximately $818,000. The increase in average selling price was primarily due to a shift in product mix as well as an increase in wholesale sales of approximately $75,000 versus an increase in sales to distributors of approximately $5,000, as selling prices through our wholesale channel are generally higher than selling prices through our distributor channel.  For UGG wholesale net sales, the increase in volume had an impact of approximately $65,000 and the increase in average selling price had an impact of approximately $12,000.

Wholesale net sales of our Teva brand increased primarily due to an increase in volume of pairs sold as well as an increase in the weighted-average wholesale selling price per pair.  The increase in average selling price was primarily due to a shift in product

27

mix. For Teva wholesale net sales, the increase in volume had an impact of approximately $7,000 and the increase in average selling price had an impact of approximately $1,000.

Wholesale net sales of our Sanuk brand increased primarily due to an increase in the volume of pairs sold, partially offset by a decrease in the weighted-average wholesale selling price per pair. The decrease in average selling price was primarily due to a shift in product mix.  For Sanuk wholesale net sales, the increase in volume of pairs sold had an impact of approximately $5,000 and the decrease in average selling price had an impact of approximately $4,000.

Wholesale net sales of our other brands increased primarily due to an increase in the volume of pairs sold as well as an increase in the weighted-average wholesale selling price per pair. The increase in the average selling price was primarily due to a shift in product mix as well as a decreased impact of closeout sales. For other brand wholesale net sales, the increase in volume of pairs sold had an impact of approximately $17,000 and the increase in average selling price had an impact of approximately $2,000.

Net sales of our E-Commerce business increased primarily due to an increase in the number of pairs sold, partially offset by a decrease in the weighted-average selling price per pair. The decrease in the average selling price was primarily due to a shift in product mix and increased sales discounts. For E-Commerce net sales, the increase in volume had an impact of approximately $46,000 and the decrease in average selling price had an impact of approximately $5,000.

Net sales of our retail store business, which are primarily UGG brand sales, increased largely due to the addition of new stores opened since December 31, 2013, partially offset by the negative impact of foreign currency exchange rate fluctuations. On a constant currency basis, net sales of our retail store business increased by 15.2% to approximately $303,000. A large majority of the new stores were in the US and China, with the remaining new stores in Japan, Canada, Hong Kong and Europe. Same store sales for the thirty-nine weeks ended December 28, 2014 decreased by 8.2% compared to the same period in 2013.  The decrease in same store sales is primarily due to a shift in product mix whereby we sold more casual styles, which generally carry lower price points, as well as a shift in sales of our Classic styles to online from in-store. For retail same store sales, we experienced a decrease in the weighted-average selling price which had an impact of approximately $17,000 on retail store net sales, partially offset by an increase in the volume of pairs sold which had an impact of approximately $2,000 on retail store net sales. As we continue to increase the number of retail stores, each new store will have less significant impact on our growth rate.

International sales, which are included in the segment sales above, for all of our products combined increased by 22.0% for the nine months ended December 31, 2014 as compared to the nine months ended December 31, 2013. On a constant currency basis, international sales increased 24.0% to approximately $537,000. International sales represented 35.8% and 33.5% of worldwide net sales for the nine months ended December 31, 2014 and 2013, respectively.  The increase in international sales as a percentage of worldwide net sales was primarily due to the continued growth in our UGG brand internationally across all channels of approximately $92,000.

Foreign income before income taxes was $73,443 and $60,622 and worldwide income before income taxes was $220,188 and $203,047 for the nine months ended December 31, 2014 and 2013, respectively. Foreign income before income taxes represented 33.4% and 29.9% of worldwide income before income taxes for the nine months ended December 31, 2014 and 2013, respectively. The increase in foreign income before income taxes as a percentage of worldwide income before income taxes was primarily due to the increase in international sales as well as a 1.1 percentage point increase in gross margin, partially offset by increased foreign operating expenses of approximately $42,000 and an increase in domestic income before income taxes. The increase in foreign operating expenses was primarily related to the expansion of our international retail and E-Commerce operations.

We expect that our foreign income before income taxes will continue to fluctuate from year to year based on several factors, including our expansion initiatives. In addition, we believe that the continued evolution and geographic scope of the UGG brand, our continuing strategy of enhancing product diversification, and our expected growth in our international retail and E-Commerce business, will result in increases in foreign income before income taxes as a percentage of worldwide income before income taxes in future years.

Gross Profit.  As a percentage of net sales, gross margin increased primarily due to increased margins of 4.1 percentage points from our UGG brand wholesale segment.  The increase in our UGG brand wholesale segment gross margin was primarily due to a greater mix of higher margin wholesale sales compared to lower margin distributor sales, due in part to our acquisition of our distributor in Germany.  An increase in the mix of retail and E-Commerce sales, which generally carry higher margins than our wholesale segments, contributed approximately 40 basis points to the increase in the overall gross margin.  Additionally, average sheepskin prices decreased compared to the same period last year and closeout sales decreased as a percentage of overall sales and had higher margins compared with the same period last year.  These factors were partially offset by decreased margins of 3.4 percentage points from our E-Commerce segment primarily due to increased discounts and promotions compared to the same period last year.The factors discussed above include the negative impact of foreign currency exchange rate fluctuations. Our

28

gross margins fluctuate based on several factors, and we expect our gross margin to increase for the fiscal year ending March 31, 2015 compared to the fiscal year ended December 31, 2013, primarily due to the factors discussed above.

Selling, General and Administrative (SG&A) Expenses.  The change in SG&A expenses was primarily due to:

• increased retail costs of approximately $25,000, largely related to new retail stores that were not open as of December 31, 2013 and related corporate infrastructure;

• increased expenses of approximately $16,000 for marketing and promotions, largely related to the UGG and Hoka brands;

• expenses of approximately $9,000 related to the negative impact of foreign currency exchange rate fluctuations in the current year, compared to approximately $3,000 of benefit related to the positive impact of foreign currency exchange rate fluctuations in the prior year;

• increased E-Commerce costs of approximately $11,000, largely related to increased expenses related to marketing and advertising and the expansion of our E-Commerce business;

• increased expenses of approximately $8,000 for corporate infrastructure to support our international wholesale expansion;

• increased information technology costs of approximately $6,000, in part due to accelerating the expense for certain software projects that will not be used;

• increased sales and commission expenses of approximately $5,000 largely driven by the increase in wholesale sales;

• increased distribution center costs of approximately $4,000, largely driven by the increase in sales and our new distribution center;

• increased amortization expense of approximately $4,000 related to our purchase of intangible assets; and

• increased infrastructure improvements of approximately $3,000 to support our OmniChannel transformation.

Income (Loss) from Operations.  Refer to note 10 to our accompanying condensed consolidated financial statements for a discussion of our reportable segments.  The following table summarizes operating income (loss) by segment:

	Nine Months Ended December 31,
							Change
	2014			2013			Amount			%
UGG wholesale	$	261,614		$	210,655		$	50,959		24.2	%
Teva wholesale	3,812			(475		)	4,287			902.5
Sanuk wholesale	9,307			11,231			(1,924		)	(17.1	)
Other wholesale	(9,104		)	(7,227		)	(1,877		)	(26.0	)
E-Commerce	75,256			57,883			17,373			30.0
Retail stores	51,979			55,250			(3,271		)	(5.9	)
Unallocated overhead costs	(169,182		)	(122,072		)	(47,110		)	(38.6	)
Total	$	223,682		$	205,245		$	18,437		9.0	%

Income from operations increased primarily due to the increase in sales and gross margin, partially offset by the increase in SG&A expenses and the negative impact of foreign currency exchange rate fluctuations.  On a constant currency basis, income from operations increased by 10.3% to approximately $226,500.

The increase in income from operations of UGG brand wholesale was the result of a 4.1 percentage point increase in gross margin as well as the increase in net sales, partially offset by an increase in operating expenses of approximately $13,000. The increase in gross margin was primarily due to a decreased impact from closeout sales as well as an increase in the proportion of wholesale

29

sales versus sales to distributors, as wholesale sales generally carry higher margins. Overall wholesale sales increased by approximately $75,000 while overall distributor sales increased by approximately $5,000. The change in sales mix was partially due to the acquisition of our UGG brand distributor in Germany and the corresponding conversion to a wholesale business. The increase in operating expenses was primarily due to marketing and promotions, amortization and sales and commissions.

Teva brand wholesale had income from operations for the nine months ended December 31, 2014, compared to a loss from operations for the nine months ended December 31, 2013. This change was primarily the result of a decrease in operating expenses of approximately $3,000 as well as the increase in net sales.

The decrease in income from operations of Sanuk brand wholesale was primarily the result of a 4.1 percentage point decrease in gross margin, partially offset by the increase in net sales. The decrease in gross margin was primarily due to an increased impact from closeout sales. 

The increase in loss from operations of our other brands wholesale was primarily the result of an increase in operating expenses of approximately $9,000, partially offset by the increase in net sales as well as a 3.5 percentage point increase in gross margin. The increase in operating expenses was primarily due to increased marketing and promotions as well as increased sales and commission expenses largely due to the increase in sales. The increase in gross margin was primarily due to a decreased impact from closeout sales.

The increase in income from operations of our E-Commerce business was primarily due to the increase in net sales. This increase was partially offset by a 3.4 percentage point decrease in gross margin as well as an increase in operating expenses of approximately $4,000. The decrease in gross margins was primarily due to increased sales discounts. The increase in operating expenses includes the positive impact of foreign currency exchange rate fluctuations in the current year of approximately $5,000 compared to the negative impact of foreign currency exchange rate fluctuations of approximately $2,000 in the prior year.

Income from operations of our retail store business, which primarily relates to the UGG brand, decreased primarily due to increased operating expenses of approximately $24,000, largely offset by the increase in net sales, and includes the negative impact of foreign currency exchange rate fluctuations. The increase in operating expenses largely related to our new store openings and related corporate infrastructure.  On a constant currency basis income from operations of our retail store business decreased 1.8% to approximately $54,000.

The increase in unallocated overhead costs was primarily due to expense related to the negative impact of foreign currency exchange rate fluctuations of approximately $14,000 in the current year compared to a benefit related to the positive impact of foreign currency exchange rate fluctuations of approximately $6,000 in the prior year, increased corporate infrastructure of approximately $11,000 to support our OmniChannel transformation and international wholesale expansion, increased information technology costs of approximately $6,000 and increased distribution center costs of approximately $4,000.

Other Expense, Net.  The increase in other expense, net was primarily due to an increase in interest expense.

Income Taxes.  Income taxes for the interim periods are computed using the effective tax rate estimated to be applicable for the full fiscal year, which is subject to ongoing review and evaluation by management and can vary from quarter to quarter.  Income tax expense and effective income tax rates were as follows:

	Nine Months Ended   December 31,
	2014			2013
Income tax expense	$	59,814		$	58,365
Effective income tax rate	27.2		%	28.7		%

The decrease in the effective tax rate was primarily due to a change in the jurisdictional mix of expected annual pre-tax income. This decrease was partially offset by overall discrete tax liabilities of approximately $1,400 recognized during the nine months ended December 31, 2014 compared to overall discrete tax benefits of approximately $1,700 recognized during the nine months ended December 31, 2013. The discrete tax liabilities relate to provisions recorded for unrecognized tax benefits as well as prior year US federal and state tax adjustments. The discrete tax benefits relate to a combination of prior year US federal, state and foreign tax adjustments.  Unremitted earnings of non-US subsidiaries are expected to be reinvested outside of the US indefinitely.  Such earnings would become taxable upon the sale or liquidation of these subsidiaries or upon the remittance of dividends.  As of December 31, 2014, we had approximately $136,000 of cash and cash equivalents outside the

30

US that would be subject to additional income taxes if it were to be repatriated. We anticipate our effective tax rate for the fiscal year ending March 31, 2015 to be lower than the full year rate of 29.1% for the fiscal year ended December 31, 2013.

Net Income. Our net income increased as a result of the items discussed above.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements other than our guarantee contracts. See “Contractual Obligations” below.

Liquidity and Capital Resources

We finance our working capital and operating needs using a combination of our cash and cash equivalents balances, cash generated from operations, and, as needed, the credit available under our Second Amended and Restated Credit Agreement.  In an economic recession or under other adverse economic conditions, our cash generated from operations may decline, and we may be unable to realize a return on our cash and cash equivalents, secure additional credit on favorable terms, or renew or access our existing credit.  These factors may impact our working capital reserves and have a material adverse effect on our business.

Our cash flow cycle includes the purchase of or deposits for raw materials, the purchase of inventories, the subsequent sale of the inventories, and the eventual collection of the resulting accounts receivables.  As a result, our working capital requirements begin when we purchase, or make deposits on, raw materials and inventories and continue until we ultimately collect the resulting receivables.  The seasonality of our UGG brand business requires us to build fall and winter inventories in the quarters ending June 30 and September 30 to support sales for the UGG brand’s major selling seasons, which historically occur during the quarters ending September 30 and December 31; whereas, the Teva and Sanuk brands build inventory levels beginning in the quarters ending December 31 and March 31 in anticipation of the spring selling season that occurs in the quarters ending March 31 and June 30.  Given the seasonality of our UGG, Teva, and Sanuk brands, our working capital requirements fluctuate significantly throughout the year.  The cash required to fund these working capital fluctuations has been provided using our internal cash flows and short-term borrowings.  As needed, we borrow funds under our Second Amended and Restated Credit Agreement.

The following table summarizes our cash flows:

	Nine Months Ended December 31,
							Change
	2014			2013			Amount			%
Net cash provided by operating activities	$	192,727		$	246,358		$	(53,631	)	(21.8	)%
Net cash used in investing activities	$	(76,152	)	$	(73,093	)	$	(3,059	)	(4.2	)%
Net cash provided by (used in) financing activities	$	15,751		$	(3,351	)	$	19,102		570.0	%

Cash from Operating Activities.  Net cash provided by operating activities for the nine months ended December 31, 2014 resulted primarily from net income and an increase in trade accounts payable. The increase in trade accounts payable was primarily due to the timing of inventory purchases and payments. This increase in cash provided by operating activities was partially offset by an increase in trade accounts receivable and inventories. The increase in trade accounts receivable was primarily related to increased wholesale sales in the three months ended December 31, 2014 as compared to the three months ended March 31, 2014.  The increase in inventory was primarily related to expected future sales and the timing of our inventory purchases and payments. Net cash provided by operating activities for the nine months ended December 31, 2013 resulted primarily from net income and increases in trade accounts payable. The increase in trade accounts payable was primarily due to the timing of inventory purchases and payments. This increase in cash provided by operating activities was partially offset by an increase in trade accounts receivable and prepaid expenses and other current assets. The increase in trade accounts receivable was primarily related to increased wholesale sales during the three months ended December 31, 2013 as compared to the three months ended March 31, 2013. The increase in prepaid expenses and other current assets was primarily related to additional deposits paid in accordance with our contracts to purchase sheepskin.

Net working capital increased as of December 31, 2014 from March 31, 2014, primarily as a result of higher cash and cash equivalents balances, increased trade accounts receivable and increased inventories, partially offset by increased trade accounts payable and increased other current liabilities. Changes in working capital are due to the items discussed above, as well as our normal seasonality and timing of cash receipts and cash payments.

31

Wholesale accounts receivable turnover and inventory turnover both improved in the twelve months ended December 31, 2014 compared to the twelve months ended December 31, 2013, and do not have a material impact on our liquidity. 

Cash from Investing Activities.  Net cash used in investing activities for the nine months ended December 31, 2014 resulted primarily from the purchases of property and equipment and purchase of intangible and other assets, net. The capital expenditures were primarily related to infrastructure improvements to support our OmniChannel transformation and international expansion, the build out of our distribution center and retail stores, and purchases of computer hardware and software. The purchase of intangible and other assets, net was related to the acquisition of our UGG brand distributor that sold to retailers in Germany. For the nine months ended December 31, 2013, net cash used in investing activities resulted primarily from the purchases of property and equipment. The capital expenditures included the build out of our new corporate facilities and retail stores, and purchases of computer hardware and software.

As of December 31, 2014, we had approximately $7,000 of material commitments for future capital expenditures primarily related to equipment costs of our new distribution center and build out of retail stores. We estimate that the remaining capital expenditures for fiscal year 2015, including the aforementioned commitments will be approximately $30,000 to $35,000. We anticipate these expenditures will primarily include information technology and related infrastructure improvements to support our OmniChannel transformation and international expansion, equipment costs of our new distribution center, and the build out of retail stores. The actual amount of capital expenditures may differ from this estimate, largely depending on the timing of new store openings or any unforeseen needs to replace existing assets and the timing of other expenditures.

Cash from Financing Activities.  For the nine months ended December 31, 2014, net cash provided by financing activities was comprised primarily of short-term borrowings provided by our lines of credit and funding received from the mortgage obtained on our corporate headquarters property. This was partially offset by repayments of short-term borrowings, cash paid for repurchases of common stock, and cash used to pay for shares withheld for taxes from employee stock unit vestings.  For the nine months ended December 31, 2013, net cash used in financing activities was comprised primarily of repayments of short-term borrowings as well as cash used to pay for shares withheld for taxes from employee stock unit vestings, largely offset by short-term borrowings.

In June 2012, our Board of Directors approved a stock repurchase program to repurchase up to $200,000 of our common stock in the open market or in privately negotiated transactions, subject to market conditions, applicable legal requirements, and other factors.  The program does not obligate us to acquire any particular amount of common stock and the program may be suspended at any time at our discretion.  Under this program, during the nine months ended December 31, 2014 we repurchased approximately 157,000 shares, for approximately $13,300, or an average price of $84.69. Through December 31, 2014, we have repurchased approximately 2,922,000 shares under this program, for approximately $134,000, or an average price of $45.87, leaving the remaining approved amount at approximately $66,000. Between January 1, 2015 and February 6, 2015, we repurchased approximately 468,000 shares under the stock repurchase program approved in June 2012 for approximately $34,000, or an average price of $72.55 per share, leaving the remaining approved amount at approximately $32,000. Also subsequent to December 31, 2014, our Board of Directors approved a new stock repurchase program to repurchase up to $200,000 of the Company’s common stock in the open market or in privately negotiated transactions, subject to market conditions, applicable legal requirements, and other factors.

In August 2011 we entered into a Credit Agreement (Credit Agreement) with JPMorgan Chase Bank, National Association (JPMorgan) as the administrative agent, Comerica Bank (Comerica) and HSBC Bank USA, National Association (HSBC), as co-syndication agents, and the lenders party thereto.  In August 2012 we amended and restated in its entirety the Credit Agreement (Amended and Restated Credit Agreement).  In June 2013 we amended the Amended and Restated Credit Agreement to permit additional borrowings in China of $12,500 and revised certain financial covenants including an increase in the maximum amount permitted to be spent on the headquarters building from $75,000 to $80,000. In August 2013 one of our subsidiaries entered into a new credit agreement in China (China Credit Facility).  In November 2014 we entered into a second Amended and Restated Credit Agreement with JPMorgan as the administrative Agent, Comerica and HSBC as co-syndication agents, and the lenders party thereto. The Second Amended and Restated Credit Agreement amends and restates, in its entirety, the Amended and Restated Credit Agreement. The Second Amended and Restated Credit Agreement is a five-year, $400,000 secured revolving credit facility. Refer to note 4 and to our accompanying condensed consolidated financial statements for further information on our Second Amended and Restated Credit Agreement and China Credit Facility.  At December 31, 2014, we had no outstanding borrowings under the Second Amended and Restated Credit Agreement and outstanding letters of credit of approximately $100, leaving an unused balance of approximately $399,900 under the Second Amended and Restated Credit Agreement.  At December 31, 2014, we had approximately $4,900 of outstanding borrowings under the China Credit Facility. As of December 31, 2014, we were in compliance with all covenants and we remain in compliance as of the date of this report.

32

In July 2014, we obtained a mortgage on our corporate headquarters property for approximately $33,900.  At December 31, 2014 the outstanding balance under the mortgage is $33,800. The mortgage has a fixed interest rate of 4.928%.  Payments include interest and principal in an amount that will amortize the principal balance over a 30 year period. Minimum principal payments over the next 5 years are approximately $2,700.   The loan will mature and have a balloon payment due in 15 years of approximately $23,400.  The loan will be used for working capital and other general corporate purposes. In December 2014 the mortgage financial covenants were amended to be consistent with the financial covenants of the Second Amended and Restated Credit Agreement.

Contractual Obligations.  There were no material changes to the contractual obligations or contingent consideration liabilities reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC on March 3, 2014, other than those which occurred in the ordinary course of business and the mortgage secured by our corporate headquarters property referred to in note 4.

We believe that internally generated funds, the available borrowings under our existing credit facilities, mortgage proceeds, and our cash and cash equivalents will provide sufficient liquidity to enable us to meet our working capital requirements for at least the next 12 months and the foreseeable future.  However, risks and uncertainties that could impact our ability to maintain our cash position include our growth rate, the continued strength of our brands, our ability to respond to changes in consumer preferences, the impact of commodity costs including for sheepskin, our ability to collect our receivables in a timely manner, our ability to effectively manage our inventories, our ability to generate returns on our acquisitions of businesses, and market volatility, among others.  See Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for a discussion of additional factors that may affect our working capital position.  Furthermore, we may require additional cash resources due to changed business conditions or other future developments, including any investments or acquisitions we may decide to pursue.  If these sources are insufficient to satisfy our cash requirements, we may seek to sell debt securities or additional equity securities or to obtain a new credit agreement or draw on our existing Second Amended and Restated Credit Agreement.  The sale of convertible debt securities or additional equity securities could result in additional dilution to our stockholders.  Additional indebtedness could further result in incurring additional debt service obligations and could result in additional operating and financial covenants that would restrict our operations.  In addition, there can be no assurance that any additional financing will be available on acceptable terms, if at all.  Although there are no other material present understandings, commitments or agreements with respect to the acquisition of any other businesses, we may evaluate acquisitions of other businesses or brands.

Critical Accounting Policies and Estimates

For a discussion of accounting policies that we consider critical to our business operations and understanding of our results of operations, and that affect the more significant judgments and estimates used in the preparation of our condensed consolidated financial statements, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” contained in the Annual Report.

Recent Accounting Pronouncement

On May 28, 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in US GAAP when it becomes effective. The new standard is effective for us on April 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

Item 3.   Quantitative and Qualitative Disclosures About Market Risk

Commodity Price Risk. We purchase certain materials that are affected by commodity prices, the most significant of which is sheepskin.  The supply of sheepskin used in certain UGG products is in high demand and there are a limited number of suppliers able to meet our expectations for the quantity and quality of sheepskin required.  There have been significant changes in the price of sheepskin in recent years as the demand from our competitors, as well as the demand from our customers, for this commodity has changed.  Other significant factors affecting the price of sheepskin include weather patterns, harvesting decisions, global economic conditions, and additional factors which are not considered predictable or within our control.  We use purchasing contracts, pricing arrangements, and refundable deposits to attempt to reduce the impact of price volatility as an alternative to hedging commodity prices.  The purchasing contracts and pricing arrangements we use may result in unconditional purchase obligations, which are not reflected in our condensed consolidated balance sheets.  In the event of significant commodity cost increases, we will likely not be able to adjust our selling prices sufficiently to mitigate the impact on our margins.

33

Foreign Currency Exchange Rate Risk.  We face market risk to the extent that changes in foreign currency exchange rates affect our foreign assets, liabilities, revenues and expenses. We hedge certain foreign currency forecasted transactions and exposures from existing assets and liabilities. Other than as a result of an increasing amount of sales, expenses, and financial positions denominated in foreign currencies, as discussed above, we do not believe that there has been a material change in the nature of our primary market risk exposures, including with respect to the categories of market risk to which we are exposed or the particular markets that present the primary risk of loss. As of the date of this Quarterly Report on Form 10-Q, we do not know of or expect there to be any material change in the general nature of our primary market risk exposure in the near term.

We utilize forward contracts and other derivative instruments to mitigate exposure to fluctuations in the foreign currency exchange rate for a portion of the amounts we expect to purchase and sell in foreign currencies. As of December 31, 2014, we had no foreign currency forward contracts designated as cash-flow hedges and had no non-designated derivative contracts. As our international operations grow and we increase purchases and sales in foreign currencies, we will continue to evaluate our hedging policy and may utilize additional derivative instruments, as needed, to hedge our foreign currency exposures. We do not use foreign currency contracts for trading purposes. Subsequent to December 31, 2014, we entered into non-designated derivative contracts with notional amounts totaling approximately $54,000.

Although the majority of our sales and inventory purchases are denominated in US currency, these sales and inventory purchases may be impacted by fluctuations in the exchange rates between the US dollar and the local currencies in the international markets where our products are sold and manufactured. Our foreign currency exposure is generated primarily from our European and Asian operations.  Approximately $425,000, or 28.8%, of our total net sales for the nine months ended December 31, 2014 were denominated in foreign currencies.  As we hold more cash and other monetary assets and liabilities in foreign currencies, we are exposed to financial statement transaction gains and losses as a result of remeasuring the financial positions held in foreign currencies into US dollars for subsidiaries that are US dollar functional and also from remeasuring the financial positions held in US dollars and foreign currencies into the functional currency of subsidiaries that are non-US dollar functional.  We remeasure monetary assets and liabilities denominated in foreign currencies into US dollars using the exchange rate as of the end of the reporting period.  In addition, certain of our foreign subsidiaries’ local currency is their designated functional currency, and we translate those subsidiaries’ assets and liabilities into US dollars using the exchange rates at of the end of the reporting period, which results in financial statement translation gains and losses in other comprehensive income.  Changes in foreign exchange rates affect our reported profits and can distort comparisons from year to year.  In addition, if the US dollar strengthens, it may result in increased pricing pressure on our foreign distributors, and retailers, which may have a negative impact on our net sales and gross margins.

Interest Rate Risk.  Our market risk exposure with respect to financial instruments is tied to changes in the prime rate in the US and changes in London Interbank Offered Rate (LIBOR). Our Second Amended and Restated Credit Agreement provides for interest on outstanding borrowings at rates tied to the prime rate or, at our election, tied to LIBOR. Our China Credit Facility provides for interest on outstanding borrowings at rates based on the People’s Bank of China rate, which was 5.6% at December 31, 2014.

Item 4.   Controls and Procedures

Disclosure Controls and Procedures

The Company maintains a system of disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act) which are designed to provide reasonable assurance that information required to be disclosed in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. These disclosure controls and procedures include, among other processes, controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.  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 are designed to do, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

The Company carried out an evaluation, under the supervision and with the participation of management, including the principal executive officer and the principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2014 pursuant to Exchange Act Rule 13a-15.  Based upon that evaluation, the principal executive officer and the principal financial officer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this report to ensure that the information required to be disclosed

34

by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to ensure that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarter ended December 31, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II.  OTHER INFORMATION

Item 1.Legal Proceedings

On July 17, 2012 and July 26, 2012, two purported shareholder derivative lawsuits were filed in the California Superior Court for the County of Santa Barbara against our Board of Directors and several of our officers. The Company was named as nominal defendant. Plaintiffs in the state derivative actions allege, among other things, that the Board allowed certain officers to make allegedly false and misleading statements. The complaints include claims for breach of fiduciary duties, mismanagement, waste of corporate assets, insider trading, unjust enrichment, and violations of the California Corporations Code. The complaints seek compensatory damages, disgorgement, and other relief.  The actions were consolidated on September 13, 2012, and the Plaintiffs filed a consolidated complaint on November 20, 2012. On March 21, 2013, the Company’s demurrer to the consolidated complaint was sustained with leave to amend.  The Plaintiffs did not timely amend the consolidated complaint and a final judgment and order of dismissal with prejudice was entered on May 6, 2013.  Plaintiffs filed an appeal on May 22, 2013. The court of appeal affirmed the judgment of dismissal on October 2, 2014. Plaintiffs filed a petition for review in the California Supreme Court on December 5, 2014.

As part of our policing program for our intellectual property rights, from time to time, we file lawsuits in the US and abroad alleging acts of trademark counterfeiting, trademark infringement, patent infringement, trade dress infringement, trademark dilution, and state or foreign law claims.  At any given point in time, we may have a number of such actions pending.  These actions often result in seizure of counterfeit merchandise or out of court settlements with defendants or both.  From time to time, we are subject to claims where plaintiffs will raise, or defendants will raise, either as affirmative defenses or as counterclaims, the invalidity or unenforceability of certain of our intellectual properties, including our trademark registration for UGG.  We also are aware of many instances throughout the world in which a third party is using our UGG trademarks within its internet domain name, and we have discovered and are investigating several manufacturers and distributors of counterfeit UGG products.

Although we are subject to other routine legal proceedings from time to time in the ordinary course of business, including employment, intellectual property and product liability claims, we believe that the outcome of all pending legal proceedings in the aggregate will not have a material adverse effect on our business or consolidated financial statements.

Other than the aforementioned matters, there have been no material changes from the legal proceedings disclosed in the “Legal Proceedings” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on March 3, 2014.

Item 1A.Risk Factors

There have been no material changes from the risk factors disclosed in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC on March 3, 2014.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

In June 2012, the Company approved a stock repurchase program to repurchase up to $200,000 of the Company’s common stock in the open market or in privately negotiated transactions, subject to market conditions, applicable legal requirements, and other factors.  The program does not obligate the Company to acquire any particular amount of common stock and the program may be suspended at any time at the Company’s discretion.  Under this program, during the three and nine months ended December 31, 2014 we repurchased approximately 157,000 shares, for approximately $13,300, or an average price of $84.69. Through December 31, 2014, the Company had repurchased approximately 2,922,000 shares under this program, for approximately $134,000, or an average price of $45.87 per share, leaving the remaining approved amount at approximately $66,000.  The purchases

35

were funded from available working capital. Between January 1, 2015 and February 6, 2015, the Company repurchased approximately 468,000 shares under the stock repurchase program approved in June 2012 for approximately $34,000, or an average price of $72.55 per share, leaving the remaining approved amount at approximately $32,000.

Subsequent toDecember 31, 2014, the Company approved a new stock repurchase program to repurchase up to $200,000 of the Company’s common stock in the open market or in privately negotiated transactions, subject to market conditions, applicable legal requirements, and other factors.

Item 3.Defaults upon Senior Securities

Not applicable

Item 4.Mine Safety Disclosures

Not applicable

Item 5.Other Information

Not applicable

36

Item 6.Exhibits

EXHIBIT INDEX

Exhibit Number	Description of Exhibit
10.1	Second Amended and Restated Credit Agreement, dated as of November 13, 2014, by and among Deckers Outdoor Corporation, as Borrower, JPMorgan Chase Bank, National Association, as Administrative Agent, Comerica Bank and HSBC Bank USA, National Association, as Co-Syndication Agents, and the lenders from time to time party thereto. (Exhibit 10.1 to the Registrant’s Form 8-K filed on November 19, 2014 and incorporated by reference herein)
*31.1	Certification of the Chief Executive Officer pursuant to Rule 13A-14(a) under the Exchange Act, adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*31.2	Certification of the Chief Financial Officer pursuant to Rule 13A-14(a) under the Exchange Act, adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
**32.1	Certification pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
*101.1	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of December 31, 2014 and March 31, 2014; (ii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended December 31, 2014 and 2013; (iii) Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2014 and 2013, and (iv) Notes to Condensed Consolidated Financial Statements.

*	Filed herewith.
**	Furnished herewith.

37

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Deckers Outdoor Corporation
Date:	February 9, 2015	/s/ Thomas A. George
		Thomas A. George
		Chief Financial Officer
		(Duly Authorized Officer on Behalf of the Registrant and Principal Financial and Accounting Officer)

38

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Angel R. Martinez, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Deckers Outdoor Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 9, 2015	/s/ Angel R. Martinez
		Angel R. Martinez
		Chief Executive Officer
		Deckers Outdoor Corporation
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Thomas A. George, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Deckers Outdoor Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 9, 2015	/s/ Thomas A. George
		Thomas A. George
		Chief Financial Officer
		Deckers Outdoor Corporation
		(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to their knowledge, the Quarterly Report on Form 10-Q for the quarter ended December 31, 2014 of Deckers Outdoor Corporation (the Company) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in such periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in such report.

Very truly yours,
Angel R. Martinez
/s/ Angel R. Martinez
Chief Executive Officer (Principal Executive Officer)
Thomas A. George
/s/ Thomas A. George
Chief Financial Officer (Principal Financial and Accounting Officer)
Dated:	February 9, 2015

This certification accompanies the Quarterly Report pursuant to Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that section. This certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates it by reference.

XML

Accumulated Other Comprehensive Loss (AOCL) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Mar. 31, 2014
Accumulated other comprehensive loss
Unrealized loss on foreign currency hedging, net of tax	$ 0	$ (759)
Cumulative foreign currency translation adjustment, net of tax	(12,431)	(1,284)
Accumulated other comprehensive loss	$ (12,431)	$ (2,043)

XML

Goodwill and Other Intangible Assets (Segment Information) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Mar. 31, 2014
Goodwill
Goodwill	$ 127,934	$ 127,934
UGG brand
Goodwill
Goodwill	6,101	6,101
Sanuk brand
Goodwill
Goodwill	113,944	113,944
Other brands
Goodwill
Goodwill	$ 7,889	$ 7,889

XML

Business Segments, Concentration of Business, and Credit Risk and Significant Customers (Long-lived Assets) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended		3 Months Ended			9 Months Ended	3 Months Ended
	Dec. 31, 2014		Dec. 31, 2014		Dec. 31, 2013	Dec. 31, 2013	Mar. 31, 2014		Sep. 30, 2013	Mar. 31, 2013
Business segment information
Number of Stores	7		7
Property and equipment, by major country	216,055		216,055				184,570
Number of Customers Considered Concentration Risk	1		1				1
Number of Tanneries	2		2
Cash and cash equivalents
Money market fund accounts	203,339		203,339				143,816
Cash	166,103		166,103				101,272
Total Cash and Cash Equivalents	369,442		369,442				245,088		237,125	64,591
Long-lived Assets
Business segment information
Concentration risk (as a percent)	10.00%
International Net Sales
Business segment information
Concentration risk (as a percent)	35.80%		32.90%		30.60%	33.50%
Concentration risk benchmark (as a percent)	10.00%
Net Trade Accounts Receivable
Business segment information
Concentration risk benchmark (as a percent)			10.00%
Net Trade Accounts Receivable | Customer One
Business segment information
Concentration risk (as a percent)	20.30%						11.80%
Net Trade Accounts Receivable | Customer Two
Business segment information
Concentration risk (as a percent)							11.40%
US
Business segment information
Property and equipment, by major country	180,484		180,484				148,178
All other countries
Business segment information
Property and equipment, by major country	35,571	[1]	35,571	[1]			36,392	[1]

[1] No other country’s long-lived assets comprised more than 10% of total long-lived assets as of December 31, 2014 and March 31, 2014.

XML

Notes Payable and Long Term Debt

9 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Notes Payable and Long Term Debt

Notes Payable and Long Term Debt

In August 2011, the Company entered into a Credit Agreement (Credit Agreement) with JPMorgan Chase Bank, National Association (JPMorgan) as the administrative agent, Comerica Bank (Comerica) and HSBC Bank USA, National Association (HSBC) as syndication agents, and the lenders party thereto. In August 2012, the Company amended and restated in its entirety the Credit Agreement (Amended and Restated Credit Agreement). In November 2014, the Company amended and restated in its entirety the Amended and Restated Credit Agreement (Second Amended and Restated Credit Agreement). The Second Amended and Restated Credit Agreement is a five-year, $400,000 secured revolving credit facility that contains a $75,000 sublimit for the issuance of letters of credit and a $5,000 sublimit for swingline loans and matures on November 13, 2019. Subject to customary conditions and the approval of any lender whose commitment would be increased, the Company has the option to increase the maximum principal amount available under the Second Amended and Restated Credit Agreement by up to an additional $200,000, resulting in a maximum available principal amount of $600,000. None of the lenders under the Second Amended and Restated Credit Agreement has committed at this time or is obligated to provide any such increase in the commitments. In addition to allowing borrowings in US dollars, the Second Amended and Restated Credit Agreement provides a $150,000 sublimit for borrowings in Euros, British pounds and any other currency that is subsequently approved by JPMorgan, each lender and the issuing bank. At the Company’s option, revolving loans issued under the Second Amended and Restated Credit Agreement will initially bear interest at either the adjusted London Interbank Offered Rate (LIBOR) for 30 days (0.17% at December 31, 2014) plus 1.25% per annum, in the case of LIBOR borrowings, or at the alternate base rate plus 0.25% per annum, and thereafter the interest rate will fluctuate between adjusted LIBOR plus 1.25% per annum and adjusted LIBOR plus 2.00% per annum (or between the alternate base rate plus 0.25% per annum and the alternate base rate plus 1.00% per annum), based upon the Company’s total adjusted leverage ratio at such time. In addition, the Company will initially be required to pay fees of 0.175% per annum on the daily amount of the revolving credit facility, and thereafter the fee rate will fluctuate between 0.175% and 0.30% per annum, based upon the Company’s total adjusted leverage ratio.

The Company’s obligations under the Second Amended and Restated Credit Agreement are guaranteed by the Company’s existing and future wholly-owned domestic subsidiaries (other than certain immaterial subsidiaries, foreign subsidiaries, foreign subsidiary holding companies and specified excluded subsidiaries) (the Guarantors), and is secured by a first-priority security interest in substantially all of the assets of the Company and the Guarantors, including all or a portion of the equity interests of certain of the Company’s domestic and first-tier foreign subsidiaries.

The Second Amended and Restated Credit Agreement contains financial covenants which include: the total adjusted leverage ratio must not be greater than 3.25 to 1.00; the sum of the consolidated annual earnings before interest, taxes, depreciation, and amortization (EBITDA) and annual rental expense, divided by the sum of the annual interest expense and the annual rental expense must be greater than 2.25 to 1.00; and other customary limitations. The Second Amended and Restated Credit Agreement contains certain other covenants which include: the maximum amount paid for capital expenditures may not exceed $110,000 per year if the total adjusted leverage ratio is equal to or exceeds 2.75 to 1.00; the maximum additional unsecured debt may not exceed $200,000; the Company may not have aggregate ERISA events that are considered materially adverse; the Company may not have a change of control (as defined in the Second Amended and Restated Credit Agreement); and no restrictions on dividends, share repurchases or acquisitions if the total adjusted leverage ratio does not exceed 2.75 to 1.00.

At December 31, 2014, the Company had no outstanding borrowings under the Second Amended and Restated Credit Agreement and outstanding letters of credit of approximately $100.  As a result, the unused balance and the amount available to borrow after applying the total adjusted leverage ratio under the Second Amended and Restated Credit Agreement was approximately $399,900 at December 31, 2014.  In August 2012, the Company incurred approximately $1,700 of deferred financing costs which were included in prepaid expenses and amortized over the term of the Amended and Restated Credit Agreement using the straight-line method. In November 2014, the Company incurred approximately $800 of additional deferred financing costs which were combined with the remaining unamortized balance from the Amended and Restated Credit Agreement included in prepaid expenses. The combined amount is being amortized over the term of the Second Amended and Restated Credit Agreement using the straight-line method.

In October 2014, the China Credit Facility was amended (Amended China Credit Facility) to include, among other things, an extension of the aggregate period of borrowing from 12 months to 18 months. At December 31, 2014, the Company had approximately $4,900 of outstanding borrowings under the Amended China Credit Facility. Interest is based on the People’s Bank of China rate, which was 5.6% at December 31, 2014.

In July 2014, the Company obtained a mortgage secured by its corporate headquarters property for approximately $33,900.  At December 31, 2014 the outstanding balance under the mortgage was approximately $33,800, which includes approximately $500 in short-term borrowings and approximately $33,300 in mortgage payable in the condensed consolidated balance sheet. The mortgage has a fixed interest rate of 4.928%.  Payments include interest and principal in an amount that will amortize the principal balance over a 30 year period.  Minimum principal payments over the next 5 years are approximately $2,700. The loan will mature and have a balloon payment due in 15 years of approximately $23,400.  In December 2014, the mortgage financial covenants were amended to be consistent with the financial covenants of the Second Amended and Restated Credit Agreement as discussed above.

XML

Commitments and Contingencies (Narrative) (Details) (USD $)	3 Months Ended	9 Months Ended
	Dec. 31, 2014	Dec. 31, 2014	Mar. 31, 2014	Sep. 30, 2012
Commitments and Contingencies
Business Acquisition Purchase Price, Additional Participation Payment Year Three, Terms		60 days
Liability for Uncertain Tax Positions, Current	$ 200,000	$ 2,200,000
Income Tax Examination, Penalties and Interest Accrued		1,100,000
Income Tax Examination, Estimate of Possible Loss		300,000
Maximum indemnity period of claims for intellectual property		5 years
Indemnification
Commitments and Contingencies
Number of pending claims	0	0
Future capital expenditures
Commitments and Contingencies
Material commitments	7,000,000	7,000,000
Sanuk
Commitments and Contingencies
Business Combination, Contingent Consideration, Liability	26,200,000	26,200,000	28,000,000
Hoka
Commitments and Contingencies
Business Combination, Contingent Consideration, Liability	1,500,000	1,500,000	1,800,000
Maximum contingent consideration payments				$ 2,000,000
Gross profit performance criteria | Sanuk
Commitments and Contingencies
Contingent consideration performance percentage applied to gross profit		40.00%

XML

Credit Agreement (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	1 Months Ended
	Dec. 31, 2014	Nov. 30, 2014	Oct. 30, 2014	Mar. 31, 2014	Jul. 31, 2014	Nov. 13, 2014	Aug. 31, 2013
Notes Payable and Long-Term Debt
Short-term borrowings	$ 5,367			$ 6,702
Mortgage payable	33,282			0
Mortgage
Notes Payable and Long-Term Debt
Debt Instrument, Term for Minimum Payments	5 years
Effective interest rate on debt	4.928%
Debt Instrument, Face Amount					33,900
Gross amount of mortgage	33,800
Loan amortization period	30 years
Debt Instrument, Periodic Payment	2,700
Term of mortgage loan	15 years
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid	23,400
Short-term borrowings	500
Mortgage payable	33,282
Second Amended and Restated Credit Agreement
Notes Payable and Long-Term Debt
Line of Credit Facility Term		5 years
Current borrowing capacity						400,000
Line of Credit Facility, Capacity Available for Letters of Credit, Maximum						75,000
Line of Credit Facility Capacity Available for Swing Loans, Maximum						5,000
Line of Credit Facility Borrowing Capacity Increase Available						200,000
Line of Credit Facility, Maximum Borrowing Capacity						600,000
Line of Credit Facility Capacity Available for Foreign Currency, Maximum						150,000
Debt Instrument Period of Initial Variable Rate	30 days
Debt Instrument, Basis Spread on Variable Rate	1.00%
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.175%
Debt Instrument Covenant Total Adjusted Leverage Ratio, Numerator	2.75
Outstanding borrowings	0
Deferred Finance Costs, Gross		800
Credit Agreement
Notes Payable and Long-Term Debt
Deferred Finance Costs, Gross							1,700
Revolving Credit Facility | Second Amended and Restated Credit Agreement | Line of Credit
Notes Payable and Long-Term Debt
Outstanding letters of credit	100
Line of Credit Facility, Remaining Borrowing Capacity	399,900
Revolving Credit Facility | Amended China Credit Agreement | Line of Credit
Notes Payable and Long-Term Debt
Outstanding borrowings	4,900
Effective interest rate on debt	5.60%
Minimum | Second Amended and Restated Credit Agreement
Notes Payable and Long-Term Debt
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.175%
Debt covenant ratio for earnings, EBITDA, and annual rental expense	2.25
Minimum | Amended China Credit Agreement
Notes Payable and Long-Term Debt
Term of mortgage loan			12 months
Maximum | Second Amended and Restated Credit Agreement
Notes Payable and Long-Term Debt
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.30%
Debt Instrument, Covenant Total Adjusted Leverage Ratio, Numerator for Credit Agreement	3.25
Debt Instrument, Covenant Capital Expenditures Allowed	110,000
Debt Instrument, Covenant Additional Unsecured Debt Allowed	$ 200,000
Maximum | Amended China Credit Agreement
Notes Payable and Long-Term Debt
Term of mortgage loan			18 months
London Interbank Offered Rate (LIBOR) | Second Amended and Restated Credit Agreement
Notes Payable and Long-Term Debt
Adjusted LIBOR Interest Rate at Period End	0.17%
London Interbank Offered Rate (LIBOR) | Debt Instrument Variable Interest Rate First 30 Days | Second Amended and Restated Credit Agreement
Notes Payable and Long-Term Debt
Debt Instrument, Basis Spread on Variable Rate	1.25%
London Interbank Offered Rate (LIBOR) | Debt Instrument Variable Interest Rate Thereafter Days | Second Amended and Restated Credit Agreement
Notes Payable and Long-Term Debt
Debt Instrument, Description of Variable Rate Basis	LIBOR
London Interbank Offered Rate (LIBOR) | Debt Instrument Variable Interest Rate Thereafter Days | Minimum | Second Amended and Restated Credit Agreement
Notes Payable and Long-Term Debt
Debt Instrument, Basis Spread on Variable Rate	1.25%
London Interbank Offered Rate (LIBOR) | Debt Instrument Variable Interest Rate Thereafter Days | Maximum | Second Amended and Restated Credit Agreement
Notes Payable and Long-Term Debt
Debt Instrument, Basis Spread on Variable Rate	2.00%
Debt Instrument Alternate Variable Rate Base | Debt Instrument Variable Interest Rate First 30 Days | Second Amended and Restated Credit Agreement
Notes Payable and Long-Term Debt
Debt Instrument, Basis Spread on Variable Rate	0.25%
Debt Instrument Alternate Variable Rate Base | Debt Instrument Variable Interest Rate Thereafter Days | Second Amended and Restated Credit Agreement
Notes Payable and Long-Term Debt
Debt Instrument, Basis Spread on Variable Rate	0.25%

XML

Stockholders' Equity (Narrative) (Details) (USD $)	1 Months Ended	3 Months Ended	9 Months Ended	30 Months Ended	1 Months Ended
	Jun. 30, 2012	Dec. 31, 2014	Dec. 31, 2014	Dec. 31, 2014	Feb. 09, 2015	Sep. 30, 2014
Stockholders' equity
Weighted average grant date fair value			$ 98.29
Compensation cost not yet recognized		$ 9,200,000	$ 9,200,000	$ 9,200,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options		6,800,000	6,800,000	6,800,000
Maximum stock repurchase amount approved by Board of Directors	200,000,000
Number of shares repurchased		157,000		2,922,000
Repurchase of common stock, payments		13,300		134,000,000
Average stock price of shares repurchased (in dollars per share)		$ 84.69		$ 45.87
Remaining stock repurchase amount approved by Board of Directors				66,000,000
Subsequent Event
Stockholders' equity
Maximum stock repurchase amount approved by Board of Directors					200,000
Number of shares repurchased					468,000
Repurchase of common stock, payments					34,000,000
Average stock price of shares repurchased (in dollars per share)					$ 72.55
Remaining stock repurchase amount approved by Board of Directors					32,000,000
Minimum
Stockholders' equity
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options Revenue Targets Range						2,155,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Earnings before Interest, Taxes, Depreciation, and Amortization, Target Range						336,000,000
Maximum
Stockholders' equity
Number of shares granted			160,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options Revenue Targets Range						2,447,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Earnings before Interest, Taxes, Depreciation, and Amortization, Target Range						394,000,000
2006 Equity Incentive Plan (2006 Plan)
Stockholders' equity
Common stock reserved for issuance (in shares)		6,000,000	6,000,000	6,000,000
Maximum number of shares that may be issued through the exercise of incentive stock options		4,500,000	4,500,000	4,500,000
2006 Equity Incentive Plan (2006 Plan) | Nonvested stock units issued (NSUs)
Stockholders' equity
Number of shares granted			143,000
Weighted average grant date fair value			$ 83.99
NSUs granted that will vest at the end of each of the three years after the performance goals are achieved (as a percent)			33.33%
Award vesting period of the grants			3 years
2006 Equity Incentive Plan (2006 Plan) | Time-based equity award
Stockholders' equity
Number of shares granted		10,000	33,000
Weighted average grant date fair value		$ 89.43	$ 82.64
2006 Equity Incentive Plan (2006 Plan) | Time-based equity award | Subsequent Event
Stockholders' equity
Number of shares granted					13,000
Weighted average grant date fair value					$ 68.96
Compensation cost not yet recognized					$ 900,000

XML

Stockholders' Equity Stockholders' Equity (Change in Retained Earnings) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period			$ 743,815
Net income	156,706	140,897	160,374	144,682
Repurchase of common stock			(13,305)
Balance, end of period	$ 890,884		$ 890,884

XML

Fair Value Measurements

9 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The fair values of the Company’s cash and cash equivalents, trade accounts receivable, prepaid expenses, other current assets, short-term borrowings, trade accounts payable, accrued payroll, other accrued expenses, income taxes payable and VAT payable approximate the carrying values due to the relatively short maturities of these instruments.  The fair values of the Company’s long-term liabilities, other than contingent consideration, recalculated using current interest rates, would not significantly differ from the recorded amounts.  The fair value of the contingent consideration related to acquisitions and of the Company's derivatives are measured and recorded at fair value on a recurring basis.  Changes in fair value resulting from either accretion or changes in discount rates or in the expectations of achieving the performance targets are recorded in selling, general and administrative expenses (SG&A). The Company records the fair value of assets or liabilities associated with derivative instruments and hedging activities in other current assets or other accrued expenses, respectively, in the condensed consolidated balance sheets.

In 2010, the Company established a nonqualified deferred compensation program that permits a select group of management employees to defer earnings to a future date on a nonqualified basis.  For each plan year, on behalf of the Company, the Company’s Board of Directors (the Board) may, but is not required to, contribute any amount it desires to any participant under this program.  The Company’s contribution will be determined by the Board annually, most likely in the quarter ending March 31.  The value of the deferred compensation is recognized based on the fair value of the participants’ accounts.  The Company has established a rabbi trust for the purpose of supporting the benefits payable under this program.  The assets of the trust are reported in other assets on the Company’s condensed consolidated balance sheets.  All amounts deferred are presented in long-term liabilities in the condensed consolidated balance sheets.

The inputs used in measuring fair value are prioritized into the following hierarchy:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable.

• Level 3: Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing an asset or liability. 

The table below summarizes the Company’s financial assets and liabilities that are measured on a recurring basis at fair value:

	Fair value at December 31,			Fair Value Measurement Using
	2014			Level 1			Level 2		Level 3
Assets (liabilities) at fair value
Nonqualified deferred compensation asset	$	5,321		$	5,321		$	—	$	—
Nonqualified deferred compensation liability	$	(5,321	)	$	(5,321	)	$	—	$	—
Contingent consideration for acquisition of business	$	(27,700	)	$	—		$	—	$	(27,700	)

	Fair value at March 31,			Fair Value Measurement Using
	2014			Level 1			Level 2			Level 3
Assets (liabilities) at fair value
Nonqualified deferred compensation asset	$	4,534		$	4,534		$	—		$	—
Nonqualified deferred compensation liability	$	(4,534	)	$	(4,534	)	$	—		$	—
Designated derivatives liability	$	(832	)	$	—		$	(832	)	$	—
Contingent consideration for acquisition of business	$	(30,000	)	$	—		$	—		$	(30,000	)

The Level 2 inputs consist of forward spot rates at the end of the reporting period (see note 7).

The fair value of the contingent consideration is based on subjective assumptions.  It is reasonably possible the estimated fair value of the contingent consideration could change in the near-term and the effect of the change could be material.

Sanuk®

The estimated fair value of the contingent consideration attributable to our Sanuk® (Sanuk) brand acquisition is based on the Sanuk brand's estimated future gross profit in calendar year 2015, using a probability weighted average sales forecast to determine a best estimate of gross profit.  The estimated sales forecast includes a compound annual growth rate (CAGR) of 14.9% from calendar year 2013 through calendar year 2015.  The gross profit forecast for calendar year 2015 is approximately $71,000, which is then used to apply the contingent consideration percentage in accordance with the applicable agreement.  The total estimated contingent consideration is then discounted to the present value with a discount rate of 7.0%.  The Company’s use of different estimates and assumptions could produce different estimates of the value of the contingent consideration.  For example, a 5.0% change in the estimated CAGR would change the total liability balance at December 31, 2014 by approximately $2,000.

Hoka One One®

In connection with the Company’s acquisition of the HokaOne One® (Hoka) brand, the purchase price includes contingent consideration with maximum payments of $2,000, which is based on the Hoka brand’s net sales for calendar years 2013 through 2017. The Company estimates future net sales using a probability weighted average sales forecast to determine a best estimate.  The Company’s use of different estimates and assumptions is not expected to have a material impact to the value of the contingent consideration.

Refer to note 5 for further information on the contingent consideration arrangements.

The following table presents a reconciliation of the Level 3 measurement:

Balance at March 31, 2014	$	30,000
Payments	(500		)
Change in fair value	(1,800		)
Balance at December 31, 2014	$	27,700

XML

Foreign Currency Exchange Contracts and Hedging (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Mar. 31, 2014 counterparty	Feb. 09, 2015 counterparty
Foreign currency exchange contracts and hedging
Number of counterparties in derivative contracts			4
Derivatives designated as cash flow hedges | Foreign currency exchange contracts
Summary of the effect of derivative instruments on the consolidated statements of income
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)	$ 2,053	$ (3,253)
Reclassified from AOCI into Income (Effective Portion)	1,226	17
Gain (Loss) from Amount Excluded from Effectiveness Testing	(79)	22
Designated as Hedging Instrument | Foreign currency exchange contracts
Foreign currency exchange contracts and hedging
Derivative notional amount			64,000
Designated as Hedging Instrument | Derivatives designated as cash flow hedges | Foreign currency exchange contracts
Foreign currency exchange contracts and hedging
Derivative, number of instruments held	0
Non-designated derivatives | Foreign currency exchange contracts
Foreign currency exchange contracts and hedging
Derivative, number of instruments held	0
Summary of the effect of derivative instruments on the consolidated statements of income
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)	5,909	727
Subsequent Event | Non-designated derivatives | Foreign currency exchange contracts
Foreign currency exchange contracts and hedging
Derivative notional amount				$ 54,000
Number of counterparties in derivative contracts				5

XML

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Mar. 31, 2014
Current assets:
Cash and cash equivalents	$ 369,442	$ 245,088
Trade accounts receivable, net of allowances ($23,443 at December 31, 2014 and $15,569 at March 31, 2014)	189,548	106,199
Inventories	293,905	211,519
Prepaid expenses	14,934	12,067
Other current assets	54,366	27,118
Deferred tax assets	20,967	21,871
Total current assets	943,162	623,862
Property and equipment, net of accumulated depreciation ($123,299 at December 31, 2014 and $103,090 at March 31, 2014)	216,055	184,570
Goodwill	127,934	127,934
Other intangible assets, net of accumulated amortization ($35,561 at December 31, 2014 and $26,026 at March 31, 2014)	92,033	91,411
Deferred tax assets	16,556	17,062
Other assets	21,101	19,365
Total assets	1,416,841	1,064,204
Current liabilities:
Short-term borrowings	5,367	6,702
Trade accounts payable	171,167	76,139
Accrued payroll	27,197	22,927
Other accrued expenses	32,438	11,624
Income taxes payable	46,419	2,908
Value added tax (VAT) payable	12,643	1,915
Total current liabilities	295,231	122,215
Mortgage payable	33,282	0
Other long-term liabilities	55,100	53,140
Commitments and contingencies (note 5)
Stockholders’ equity:
Common stock, $0.01 par value; 125,000 shares authorized; shares issued and outstanding of 34,567 at December 31, 2014 and 34,624 at March 31, 2014	346	346
Additional paid-in capital	154,429	146,731
Retained earnings	890,884	743,815
Accumulated other comprehensive loss	(12,431)	(2,043)
Total stockholders’ equity	1,033,228	888,849
Total liabilities and stockholders' equity	$ 1,416,841	$ 1,064,204

XML

General

9 Months Ended

Dec. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

General

General

(a)Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments necessary for a fair presentation for each of the periods presented.  The results of operations for interim periods are not necessarily indicative of results to be achieved for full fiscal years or other interim periods.  Deckers Outdoor Corporation (also referred to as Deckers or the Company) is a global leader in designing, marketing and distributing innovative footwear, apparel, and accessories developed for both everyday casual lifestyle use and high performance activities.  The Company’s business is seasonal, with the highest percentage of UGG® brand net sales occurring in the quarters ending September 30 and December 31 and the highest percentage of Teva® and Sanuk® brand net sales occurring in the quarters ending March 31 and June 30 of each year.  The other brands do not have a significant seasonal impact on the Company.

In February 2014, our Board of Directors approved a change in the Company's fiscal year (FY) end from December 31 to March 31. The change is intended to better align our planning, financial and reporting functions with the seasonality of our business.

In July 2014, the Company acquired its UGG brand distributor that sold to retailers in Germany and now operates a wholesale business in Germany through the newly acquired subsidiary. The acquisition included certain intangible and tangible assets and the assumption of liabilities. The purchase price of the acquisition was not material to the Company’s condensed consolidated financial statements.

We sell our brands through quality domestic retailers and international distributors and retailers, as well as directly to end-user consumers through our E-Commerce business and our retail stores.  Independent third parties manufacture all of our products.

As contemplated by the Securities and Exchange Commission (SEC) under Rule 10-01 of Regulation S-X, the accompanying condensed consolidated financial statements and related footnotes have been condensed and do not contain certain information that will be included in the Company’s annual consolidated financial statements and footnotes thereto.  For further information, refer to the consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on March 3, 2014 (Annual Report).

(b)Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in accordance with United States generally accepted accounting principles (US GAAP) requires management to make estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes.  Management bases these estimates and assumptions upon historical experience, existing and known circumstances, authoritative accounting pronouncements and other factors that management believes to be reasonable.  Significant areas requiring the use of management estimates relate to inventory write-downs, accounts receivable reserves, returns liabilities, stock compensation, performance based compensation, impairment assessments, depreciation and amortization, income tax liabilities and uncertain tax positions, fair value of financial instruments, and fair values of acquired intangibles, assets and liabilities, including estimated contingent consideration payments.  Actual results could differ materially from these estimates.

(c) Recent Accounting Pronouncement

On May 28, 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in US GAAP when it becomes effective. The new standard is effective for the Company on April 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

XML

Business Segments, Concentration of Business, and Credit Risk and Significant Customers (Wholesale Operations) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Mar. 31, 2014
Business segment information
Net sales to external customers	$ 784,678	$ 736,048	$ 1,476,420	$ 1,292,858
Income (loss) from operations	214,581	201,499	223,682	205,245
Total assets for reportable segments	1,416,841		1,416,841		1,064,204
Reportable segments
Business segment information
Total assets for reportable segments	826,373		826,373		654,679
UGG wholesale
Business segment information
Net sales to external customers	401,702	399,628	815,694	735,671
Income (loss) from operations	135,893	128,909	261,614	210,655
Total assets for reportable segments	334,860		334,860		153,341
Teva wholesale
Business segment information
Net sales to external customers	12,373	14,189	65,641	58,830
Income (loss) from operations	(660)	(1,258)	3,812	(475)
Total assets for reportable segments	45,661		45,661		81,766
Sanuk wholesale
Business segment information
Net sales to external customers	17,763	19,974	66,047	64,409
Income (loss) from operations	(282)	1,085	9,307	11,231
Total assets for reportable segments	208,277		208,277		214,627
Other wholesale
Business segment information
Net sales to external customers	13,211	6,936	47,153	27,907
Income (loss) from operations	(4,522)	(4,549)	(9,104)	(7,227)
Total assets for reportable segments	53,625		53,625		41,281
eCommerce
Business segment information
Net sales to external customers	146,871	117,300	183,902	142,920
Income (loss) from operations	67,006	53,536	75,256	57,883
Total assets for reportable segments	10,697		10,697		3,129
Retail stores
Business segment information
Net sales to external customers	192,758	178,021	297,983	263,121
Income (loss) from operations	74,302	67,328	51,979	55,250
Total assets for reportable segments	173,253		173,253		160,535
Unallocated to Segments
Business segment information
Income (loss) from operations	$ (57,156)	$ (43,552)	$ (169,182)	$ (122,072)

XML

Net Income per Share Net Income per Share (Tables)

9 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Schedule of reconciliations of basic to diluted weighted-average common shares outstanding

The reconciliations of basic to diluted weighted-average common shares outstanding were as follows:

	Three Months Ended   December 31,		Nine Months Ended   December 31,
	2014	2013	2014	2013
Weighted-average shares used in basic computation	34,537,000	34,541,000	34,598,000	34,496,000
Dilutive effect of stock-based awards*	316,000	352,000	314,000	359,000
Weighted-average shares used for diluted computation	34,853,000	34,893,000	34,912,000	34,855,000

*Excluded NSUs	140,000	—	140,000	—
*Excluded RSUs	642,000	795,000	642,000	795,000
*Excluded stock appreciation rights (SARs)	525,000	525,000	525,000	525,000

* The share-based awards that were excluded from the dilutive effect were excluded because necessary conditions had not been satisfied for the shares to be issuable based on the Company’s performance through the three and nine months ended December 31, 2014 and 2013, respectively. The excluded awards include the maximum amounts achievable for these awards.

XML

Business Segments, Concentration of Business, and Credit Risk and Significant Customers (Assets) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Mar. 31, 2014	Sep. 30, 2013	Mar. 31, 2013
Reconciliations of total assets from reportable segments to the condensed consolidated balance sheets
Total assets for reportable segments	$ 1,416,841	$ 1,064,204
Unallocated cash and cash equivalents	369,442	245,088	237,125	64,591
Consolidated total assets	1,416,841	1,064,204
Reportable segments
Reconciliations of total assets from reportable segments to the condensed consolidated balance sheets
Total assets for reportable segments	826,373	654,679
Consolidated total assets	826,373	654,679
Unallocated to Segments
Reconciliations of total assets from reportable segments to the condensed consolidated balance sheets
Unallocated cash and cash equivalents	369,442	245,088
Unallocated deferred tax assets	37,523	38,933
Other unallocated corporate assets	$ 183,503	$ 125,504

XML

Goodwill and Other Intangible Assets (Change in Balance) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Dec. 31, 2014
Changes in goodwill
Goodwill, net, balance at the beginning of the period	$ 127,934
Goodwill, net, balance at the end of the period	127,934
Other intangible assets, net:
Other intangible assets, net, balance at beginning of the period	91,411
Purchase of intangible assets	12,472
Amortization expense	(9,300)
Changes in foreign currency exchange rates	(2,550)
Other intangible assets, net, balance at end of the period	$ 92,033

XML

Goodwill and Other Intangible Assets

9 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

The Company’s goodwill and other intangible assets are summarized as follows:

	Goodwill, Net		Other Intangible Assets, Net
Balance at March 31, 2014	$	127,934	$	91,411
Purchase of intangible assets	—		12,472
Amortization expense	—		(9,300		)
Changes in foreign currency exchange rates	—		(2,550		)
Balance at December 31, 2014	$	127,934	$	92,033

The Company’s goodwill by segment is as follows:

	December 31, 2014		March 31, 2014
UGG brand	$	6,101	$	6,101
Sanuk brand	113,944		113,944
Other brands	7,889		7,889
Total	$	127,934	$	127,934

XML

Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Dec. 31, 2014	Mar. 31, 2014
Statement of Financial Position [Abstract]
Trade accounts receivable, allowances (in dollars)	$ 23,443	$ 15,569
Property and equipment, accumulated deprecation	123,299	103,090
Other intangible assets, accumulated amortization	$ 35,561	$ 26,026
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares	125,000	125,000
Common stock, issued shares	34,567	34,624
Common stock, outstanding shares	34,567	34,624

XML

Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of goodwill and other intangible assets

The Company’s goodwill and other intangible assets are summarized as follows:

	Goodwill, Net		Other Intangible Assets, Net
Balance at March 31, 2014	$	127,934	$	91,411
Purchase of intangible assets	—		12,472
Amortization expense	—		(9,300		)
Changes in foreign currency exchange rates	—		(2,550		)
Balance at December 31, 2014	$	127,934	$	92,033

Schedule of total goodwill by segment

The Company’s goodwill by segment is as follows:

	December 31, 2014		March 31, 2014
UGG brand	$	6,101	$	6,101
Sanuk brand	113,944		113,944
Other brands	7,889		7,889
Total	$	127,934	$	127,934

XML

Document and Entity Information	9 Months Ended
	Dec. 31, 2014	Jan. 30, 2015
Document and Entity Information
Entity Registrant Name	DECKERS OUTDOOR CORP
Entity Central Index Key	0000910521
Document Type	10-Q
Document Period End Date	Dec. 31, 2014
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		34,568,408
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3

XML

Fair Value Measurements (Tables)

9 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Schedule of Company's financial assets and liabilities measured on a recurring basis at fair value

The table below summarizes the Company’s financial assets and liabilities that are measured on a recurring basis at fair value:

	Fair value at December 31,			Fair Value Measurement Using
	2014			Level 1			Level 2		Level 3
Assets (liabilities) at fair value
Nonqualified deferred compensation asset	$	5,321		$	5,321		$	—	$	—
Nonqualified deferred compensation liability	$	(5,321	)	$	(5,321	)	$	—	$	—
Contingent consideration for acquisition of business	$	(27,700	)	$	—		$	—	$	(27,700	)

	Fair value at March 31,			Fair Value Measurement Using
	2014			Level 1			Level 2			Level 3
Assets (liabilities) at fair value
Nonqualified deferred compensation asset	$	4,534		$	4,534		$	—		$	—
Nonqualified deferred compensation liability	$	(4,534	)	$	(4,534	)	$	—		$	—
Designated derivatives liability	$	(832	)	$	—		$	(832	)	$	—
Contingent consideration for acquisition of business	$	(30,000	)	$	—		$	—		$	(30,000	)

Schedule of reconciliation of beginning and ending amounts related to the fair value for contingent consideration for acquisition of business, categorized as Level 3

The following table presents a reconciliation of the Level 3 measurement:

Balance at March 31, 2014	$	30,000
Payments	(500		)
Change in fair value	(1,800		)
Balance at December 31, 2014	$	27,700

XML

Condensed Consolidated Statements of Comprehensive Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Income Statement [Abstract]
Net sales	$ 784,678	$ 736,048	$ 1,476,420	$ 1,292,858
Cost of sales	369,539	359,848	750,636	679,934
Gross profit	415,139	376,200	725,784	612,924
Selling, general and administrative expenses	200,558	174,701	502,102	407,679
Income from operations	214,581	201,499	223,682	205,245
Other expense (income), net:
Interest income	(38)	(18)	(122)	(34)
Interest expense	1,308	1,293	3,746	2,740
Other, net	(5)	(173)	(130)	(508)
Total other expense (income), net	1,265	1,102	3,494	2,198
Income before income taxes	213,316	200,397	220,188	203,047
Income tax expense	56,610	59,500	59,814	58,365
Net income	156,706	140,897	160,374	144,682
Other comprehensive loss, net of tax:
Unrealized (loss) gain on foreign currency hedging	(682)	(34)	759	(2,016)
Foreign currency translation adjustment	(6,647)	(1,892)	(11,147)	(83)
Total other comprehensive loss	(7,329)	(1,926)	(10,388)	(2,099)
Comprehensive income	$ 149,377	$ 138,971	$ 149,986	$ 142,583
Net income per share:
Basic (in dollars per share)	$ 4.54	$ 4.08	$ 4.64	$ 4.19
Diluted (in dollars per share)	$ 4.50	$ 4.04	$ 4.59	$ 4.15
Weighted-average common shares outstanding:
Basic (in shares)	34,537	34,541	34,598	34,496
Diluted (in shares)	34,853	34,893	34,912	34,855

XML

Foreign Currency Exchange Contracts and Hedging

9 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Foreign Currency Exchange Contracts and Hedging

Foreign Currency Exchange Contracts and Hedging

As of December 31, 2014, the Company had no foreign currency forward contracts designated as cash-flow hedges and had no non-designated derivative contracts. At March 31, 2014, the Company had foreign currency forward contracts designated as cash-flow hedges with notional amounts totaling approximately $64,000, held by four counterparties.

The following table summarizes the effect of foreign exchange contracts designated as cash flow hedging relationships on the condensed consolidated financial statements:

For the Nine Months Ended  December 31,	Amount of Gain (Loss) Recognized in OCI/L on Derivative (Effective Portion)			Location of Gain (Loss) Reclassified from AOCI/L into Income (Effective Portion)	Reclassified from AOCI/L into Income (Effective Portion)		Location of Amount Excluded from Effectiveness Testing	Gain (Loss) from Amount Excluded from Effectiveness Testing
2014	$	2,053		Net sales	$	1,226	SG&A	$	(79	)
2013	$	(3,253	)	Net sales	$	17	SG&A	$	22

The following table summarizes the effect of foreign exchange contracts not designated as hedging instruments on the condensed consolidated financial statements:

For the Nine Months Ended  December 31,	Location of Gain (Loss) Recognized in Income (Loss) on Derivatives	Amount of Gain (Loss) Recognized in Income (Loss) on Derivatives
2014	SG&A	$	5,909
2013	SG&A	$	727

Subsequent to December 31, 2014, the Company entered into non-designated derivative contracts with notional amounts totaling approximately $54,000, held by five counterparties.

XML

Stockholders' Equity

9 Months Ended

Dec. 31, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

In May 2006, the Company adopted the 2006 Equity Incentive Plan (2006 Plan), which was amended by Amendment No. 1 dated May 9, 2007.  The primary purpose of the 2006 Plan is to encourage ownership in the Company by key personnel, whose long-term service is considered essential to the Company’s continued success.  The 2006 Plan reserves 6,000,000 shares of the Company’s common stock for issuance to employees, directors, or consultants.  The maximum aggregate number of shares that may be issued under the 2006 Plan through the exercise of incentive stock options (Options) is 4,500,000.  Pursuant to the Deferred Stock Unit Compensation Plan, a sub plan under the 2006 Plan, a participant may elect to defer settlement of their outstanding unvested awards until such time as elected by the participant.

The Company has elected to grant nonvested stock units (NSUs) annually to key personnel.  The NSUs granted entitle the employee recipients to receive shares of common stock in the Company upon vesting of the NSUs.  The vesting of most NSUs is subject to achievement of certain performance targets.  During the three months ended December 31, 2014, the Company granted approximately 10,000 time-based equity award units at a weighted-average grant date fair value of $89.43 per share under the 2006 Plan. During the nine months ended December 31, 2014, the Company granted approximately 143,000 NSUs at a weighted-average grant date fair value of $83.99 per share, as well as approximately 33,000 time-based equity award units at a weighted-average grant date fair value of $82.64 per share under the 2006 Plan. The NSUs will vest in equal one-third installments at the end of each of the three years after the performance goal has been achieved, and the time-based equity award units have no Company performance targets and will vest in equal annual installments over a three year period. The vesting schedule for these awards was established to encourage officers and key employees to remain with the Company for the long-term. As of December 31, 2014, future unrecognized compensation cost for these NSUs and time-based equity award units, excluding estimated forfeitures, was approximately $9,200. As of December 31, 2014, the Company believed that the achievement of at least the threshold performance objective of the NSU awards was probable, and therefore recognized compensation expense accordingly for these awards.

On a quarterly basis, the Company grants fully-vested shares of its common stock to each of its outside directors.  The fair value of such shares is expensed on the date of issuance.

In September 2014, the Board of Directors of the Company approved a long-term incentive award (2015 LTIP Awards) under its 2006 Equity Incentive Plan. The shares under these awards will be available for issuance to current and future members of the Company's leadership team, including the Company's named executive officers. Each recipient will receive a specified maximum number of restricted stock units (RSUs), each of which will represent the right to receive one share of the Company's common stock. These awards vest subject to certain long-term performance objectives and certain long-term service conditions. The awards will vest on March 31, 2017 only if the Company meets certain revenue targets ranging between approximately $2,155,000 and approximately $2,447,000 and certain EBITDA targets ranging between approximately $336,000 and approximately $394,000 for the fiscal year ending March 31, 2017. No vesting of any 2015 LTIP Awards will occur if either of the threshold performance criteria is not met for the year ending March 31, 2017. To the extent financial performance is achieved above the threshold levels, the number of RSUs that will vest will increase up to the maximum number of units granted under the award. Under this new program, the Company granted awards that contain a maximum amount of approximately 160,000 RSUs during the nine months ended December 31, 2014. The average grant date fair value of these RSUs was $98.29 per share. As of December 31, 2014, future unrecognized compensation cost for the 2015 LTIP Awards, excluding estimated forfeitures, was approximately $6,800. As of December 31, 2014, based on the Company's current long-range forecast, the Company believed that the achievement of at least the threshold performance objectives of these awards was probable, and therefore the Company recognized compensation expense accordingly.

In June 2012, the Company approved a stock repurchase program to repurchase up to $200,000 of the Company’s common stock in the open market or in privately negotiated transactions, subject to market conditions, applicable legal requirements, and other factors.  The program does not obligate the Company to acquire any particular amount of common stock and the program may be suspended at any time at the Company’s discretion.  Under this program, during the three and nine months ended December 31, 2014 the Company repurchased approximately 157,000 shares, for approximately $13,300, or an average price of $84.69. Through December 31, 2014, the Company had repurchased approximately 2,922,000 shares under this program, for approximately $134,000, or an average price of $45.87 per share, leaving the remaining approved amount at approximately 66,000. Between January 1, 2015 and February 6, 2015, the Company repurchased approximately 468,000 shares under the stock repurchase program approved in June 2012 for approximately $34,000, or an average price of $72.55 per share, leaving the remaining approved amount at approximately $32,000.

Subsequent to December 31, 2014, the Company approved a new stock repurchase program to repurchase up to $200,000 of the Company’s common stock in the open market or in privately negotiated transactions, subject to market conditions, applicable legal requirements, and other factors. The program does not obligate the Company to acquire any particular amount of common stock and the program may be suspended at any time at the Company’s discretion.

Subsequent to December 31, 2014, the Company granted approximately 13,000 time-based equity award units at a weighted-average grant date fair value of $68.96 per share. Future unrecognized compensation cost for these awards, excluding estimated forfeitures, is approximately $900.

The following is a reconciliation of the Company’s retained earnings:

	Retained Earnings
Balance at March 31, 2014	$	743,815
Net income	160,374
Repurchase of common stock	(13,305		)
Balance at December 31, 2014	$	890,884

XML

Business Segments, Concentration of Business, and Credit Risk and Significant Customers (Tables)

9 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Schedule of business segments information

Business segment asset information is summarized as follows:

	December 31, 2014		March 31, 2014
Total assets for reportable segments:
UGG wholesale	$	334,860	$	153,341
Teva wholesale	45,661		81,766
Sanuk wholesale	208,277		214,627
Other wholesale	53,625		41,281
E-Commerce	10,697		3,129
Retail stores	173,253		160,535
	$	826,373	$	654,679

The wholesale operations of the Company’s other brands are included as one reportable segment, other wholesale, presented in the figures below.  Business segment information is summarized as follows:

	Three Months Ended   December 31,						Nine Months Ended   December 31,
	2014			2013			2014			2013
Net sales to external customers:
UGG wholesale	$	401,702		$	399,628		$	815,694		$	735,671
Teva wholesale	12,373			14,189			65,641			58,830
Sanuk wholesale	17,763			19,974			66,047			64,409
Other wholesale	13,211			6,936			47,153			27,907
E-Commerce	146,871			117,300			183,902			142,920
Retail stores	192,758			178,021			297,983			263,121
	$	784,678		$	736,048		$	1,476,420		$	1,292,858
Income (loss) from operations:
UGG wholesale	$	135,893		$	128,909		$	261,614		$	210,655
Teva wholesale	(660		)	(1,258		)	3,812			(475		)
Sanuk wholesale	(282		)	1,085			9,307			11,231
Other wholesale	(4,522		)	(4,549		)	(9,104		)	(7,227		)
E-Commerce	67,006			53,536			75,256			57,883
Retail stores	74,302			67,328			51,979			55,250
Unallocated overhead costs	(57,156		)	(43,552		)	(169,182		)	(122,072		)
	$	214,581		$	201,499		$	223,682		$	205,245

Schedule of reconciliations of total assets from reportable segments to the condensed consolidated balance sheets

Reconciliations of total assets from reportable segments to the condensed consolidated balance sheets are as follows:

	December 31, 2014		March 31, 2014
Total assets for reportable segments	$	826,373	$	654,679
Unallocated cash and cash equivalents	369,442		245,088
Unallocated deferred tax assets	37,523		38,933
Other unallocated corporate assets	183,503		125,504
Consolidated total assets	$	1,416,841	$	1,064,204

Schedule of long-lived assets, which consist of property and equipment, by major country

Long-lived assets, which consist of property and equipment, in the US and all other countries combined were as follows:

	December 31, 2014		March 31, 2014
US	$	180,484	$	148,178
All other countries*	35,571		36,392
Total	$	216,055	$	184,570

*  No other country’s long-lived assets comprised more than 10% of total long-lived assets as of December 31, 2014 and March 31, 2014.

Schedule of the Company's cash and cash equivalents

The Company’s cash and cash equivalents are as follows:

	December 31, 2014		March 31, 2014
Money market fund accounts	$	203,339	$	143,816
Cash	166,103		101,272
Total Cash and Cash Equivalents	$	369,442	$	245,088

XML

Stockholders' Equity (Tables)

9 Months Ended

Dec. 31, 2014

Stockholders' Equity Note [Abstract]

Schedule of Retained Earnings Adjustments

The following is a reconciliation of the Company’s retained earnings:

	Retained Earnings
Balance at March 31, 2014	$	743,815
Net income	160,374
Repurchase of common stock	(13,305		)
Balance at December 31, 2014	$	890,884

XML

Business Segments, Concentration of Business, and Credit Risk and Significant Customers

9 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Business Segments, Concentration of Business, and Credit Risk and Significant Customers

Business Segments, Concentration of Business, and Credit Risk and Significant Customers

The Company’s accounting policies of the segments below are the same as those described in the summary of significant accounting policies in the Annual Report, except that the Company does not allocate corporate overhead costs or non-operating income and expenses to segments.  The Company evaluates segment performance primarily based on net sales and income (loss) from operations.  The Company’s reportable segments include the strategic business units for the worldwide wholesale operations of the UGG brand, Teva brand, Sanuk brand, and other brands, its E-Commerce business and its retail store business.  The wholesale operations of each brand are managed separately because each requires different marketing, research and development, design, sourcing, and sales strategies.  The E-Commerce and retail store segments are managed separately because they are Direct-to-Consumer sales, while the brand segments are wholesale sales.  The income (loss) from operations for each of the segments includes only those costs that are specifically related to each segment, which consist primarily of cost of sales, costs for research and development, design, selling and marketing, depreciation, amortization, and the costs of employees and their respective expenses that are directly related to each segment.  The unallocated corporate overhead costs include: costs of the distribution centers, certain executive and stock compensation, accounting and finance, legal, information technology, human resources, and facilities costs, among others. During the nine months ended December 31, 2014, the Company converted seven of its retail stores in China to partner retail stores, whereby, upon conversion, the stores became wholly-owned and operated by local, third party companies within China.  These conversions included the assignment of the lease and the sale of both the Company's on-hand inventory and store leasehold improvements to the operator.  As of the date of conversion, partner retail stores sales are included in the UGG brand wholesale segment and not included in the retail stores segment. During the three months ended September 30, 2014, certain operating expenses were classified as unallocated expenses and are now classified as segment expenses, as well as certain segment expenses that were classified in one segment are now classified in a different segment. This change in segment reporting only changed the presentation within the below table and did not impact the Company's condensed consolidated financial statements for any period. The segment information for the nine months ended December 31, 2014 has been adjusted retrospectively to conform to the current period presentation.

The Company’s other brands include Ahnu®, Hoka One One® (Hoka), MOZO® and TSUBO®.  The wholesale operations of the Company’s other brands are included as one reportable segment, other wholesale, presented in the figures below.  Business segment information is summarized as follows:

	Three Months Ended   December 31,						Nine Months Ended   December 31,
	2014			2013			2014			2013
Net sales to external customers:
UGG wholesale	$	401,702		$	399,628		$	815,694		$	735,671
Teva wholesale	12,373			14,189			65,641			58,830
Sanuk wholesale	17,763			19,974			66,047			64,409
Other wholesale	13,211			6,936			47,153			27,907
E-Commerce	146,871			117,300			183,902			142,920
Retail stores	192,758			178,021			297,983			263,121
	$	784,678		$	736,048		$	1,476,420		$	1,292,858
Income (loss) from operations:
UGG wholesale	$	135,893		$	128,909		$	261,614		$	210,655
Teva wholesale	(660		)	(1,258		)	3,812			(475		)
Sanuk wholesale	(282		)	1,085			9,307			11,231
Other wholesale	(4,522		)	(4,549		)	(9,104		)	(7,227		)
E-Commerce	67,006			53,536			75,256			57,883
Retail stores	74,302			67,328			51,979			55,250
Unallocated overhead costs	(57,156		)	(43,552		)	(169,182		)	(122,072		)
	$	214,581		$	201,499		$	223,682		$	205,245

Inter-segment sales from the Company’s wholesale segments to the Company’s E-Commerce and retail stores segments are at the Company’s cost, and there is no inter-segment profit on these inter-segment sales.  Income (loss) from operations of the wholesale segments does not include any inter-segment gross profit from sales to the E-Commerce and retail stores segments. 

Business segment asset information is summarized as follows:

	December 31, 2014		March 31, 2014
Total assets for reportable segments:
UGG wholesale	$	334,860	$	153,341
Teva wholesale	45,661		81,766
Sanuk wholesale	208,277		214,627
Other wholesale	53,625		41,281
E-Commerce	10,697		3,129
Retail stores	173,253		160,535
	$	826,373	$	654,679

The assets allocable to each segment include accounts receivable, inventory, fixed assets, goodwill, other intangible assets, and certain other assets that are specifically identifiable with one of the Company’s segments.  Unallocated assets are the assets not specifically related to the segments and include cash and cash equivalents, deferred tax assets, and various other assets shared by the Company’s segments.  Reconciliations of total assets from reportable segments to the condensed consolidated balance sheets are as follows:

	December 31, 2014		March 31, 2014
Total assets for reportable segments	$	826,373	$	654,679
Unallocated cash and cash equivalents	369,442		245,088
Unallocated deferred tax assets	37,523		38,933
Other unallocated corporate assets	183,503		125,504
Consolidated total assets	$	1,416,841	$	1,064,204

The Company does not consider international operations a separate segment, as management reviews such operations in the aggregate with the aforementioned segments. Long-lived assets, which consist of property and equipment, in the US and all other countries combined were as follows:

	December 31, 2014		March 31, 2014
US	$	180,484	$	148,178
All other countries*	35,571		36,392
Total	$	216,055	$	184,570

*  No other country’s long-lived assets comprised more than 10% of total long-lived assets as of December 31, 2014 and March 31, 2014.

The Company sells its products to customers throughout the US and to foreign customers located in Europe, Asia, Canada, Australia, and Latin America, among other regions.  International sales were 32.9% and 30.6% of the Company’s total net sales for the three months ended December 31, 2014 and 2013, respectively.  International sales were 35.8% and 33.5% of the Company’s total net sales for the nine months ended December 31, 2014 and 2013, respectively.  For the nine months ended December 31, 2014 and 2013, no single foreign country comprised more than 10% of total net sales.

Management performs regular evaluations concerning the ability of its customers to satisfy their obligations and records a provision for doubtful accounts based upon these evaluations.  No single customer accounted for more than 10% of net sales for either the nine months ended December 31, 2014 or 2013.  As of December 31, 2014, the Company had one customer representing 20.3% of net trade accounts receivable. As of March 31, 2014, the Company had one customer representing 11.8% of net trade accounts receivable, and a second customer representing 11.4% of net trade accounts receivable.

The Company’s production is concentrated at a limited number of independent contractor factories in Asia.  Sheepskin is the principal raw material for certain UGG products and the majority of sheepskin is purchased from two tanneries in China, which is sourced primarily from Australia and the United Kingdom (UK). The other materials used by the Company in production are sourced primarily in Asia. The Company’s operations are subject to the customary risks of doing business abroad, including, but not limited to, currency fluctuations, customs duties and related fees, various import controls and other nontariff barriers, restrictions on the transfer of funds, labor unrest and strikes and, in certain parts of the world, political instability.  The supply of sheepskin can be adversely impacted by weather conditions, disease, and harvesting decisions that are completely outside the Company’s control.  Further, the price of sheepskin is impacted by demand, industry, and competitors.

A portion of the Company’s cash and cash equivalents are held as cash in operating accounts that are with third party financial institutions.  These balances, at times, exceed the Federal Deposit Insurance Corporation insurance limits.  While the Company regularly monitors the cash balances in its operating accounts and adjusts the balances as appropriate, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. 

The remainder of the Company’s cash equivalents is invested in interest bearing funds managed by third party investment management institutions.  These investments can include US treasury bonds and securities, money market funds, and municipal bonds, among other investments. Certain of these investments are subject to general credit, liquidity, market, and interest rate risks.  Investment risk has been and may further be exacerbated by US mortgage defaults, credit and liquidity issues, and sovereign debt concerns in Europe, which have affected various sectors of the financial markets.  As of December 31, 2014, the Company had experienced no loss or lack of access to cash in its operating accounts, invested cash, and cash equivalents.  The Company’s cash and cash equivalents are as follows:

	December 31, 2014		March 31, 2014
Money market fund accounts	$	203,339	$	143,816
Cash	166,103		101,272
Total Cash and Cash Equivalents	$	369,442	$	245,088

XML

Accumulated Other Comprehensive Loss

9 Months Ended

Dec. 31, 2014

Equity [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

Accumulated balances of the components within accumulated other comprehensive loss were as follows:

	December 31, 2014			March 31, 2014
Unrealized loss on foreign currency hedging, net of tax	$	—		$	(759	)
Cumulative foreign currency translation adjustment, net of tax	(12,431		)	(1,284		)
Accumulated other comprehensive loss	$	(12,431	)	$	(2,043	)

XML

Net Income per Share

9 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Net Income per Share

Net Income per Share

Basic net income per share represents net income divided by the weighted-average number of common shares outstanding for the period.  Diluted net income per share represents net income divided by the weighted-average number of common shares outstanding, including the dilutive impact of potential issuances of common stock.  The reconciliations of basic to diluted weighted-average common shares outstanding were as follows:

	Three Months Ended   December 31,		Nine Months Ended   December 31,
	2014	2013	2014	2013
Weighted-average shares used in basic computation	34,537,000	34,541,000	34,598,000	34,496,000
Dilutive effect of stock-based awards*	316,000	352,000	314,000	359,000
Weighted-average shares used for diluted computation	34,853,000	34,893,000	34,912,000	34,855,000

*Excluded NSUs	140,000	—	140,000	—
*Excluded RSUs	642,000	795,000	642,000	795,000
*Excluded stock appreciation rights (SARs)	525,000	525,000	525,000	525,000

* The share-based awards that were excluded from the dilutive effect were excluded because necessary conditions had not been satisfied for the shares to be issuable based on the Company’s performance through the three and nine months ended December 31, 2014 and 2013, respectively. The excluded awards include the maximum amounts achievable for these awards.

XML

General (Policies)

9 Months Ended

Dec. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

(a)Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments necessary for a fair presentation for each of the periods presented.  The results of operations for interim periods are not necessarily indicative of results to be achieved for full fiscal years or other interim periods.  Deckers Outdoor Corporation (also referred to as Deckers or the Company) is a global leader in designing, marketing and distributing innovative footwear, apparel, and accessories developed for both everyday casual lifestyle use and high performance activities.  The Company’s business is seasonal, with the highest percentage of UGG® brand net sales occurring in the quarters ending September 30 and December 31 and the highest percentage of Teva® and Sanuk® brand net sales occurring in the quarters ending March 31 and June 30 of each year.  The other brands do not have a significant seasonal impact on the Company.

In February 2014, our Board of Directors approved a change in the Company's fiscal year (FY) end from December 31 to March 31. The change is intended to better align our planning, financial and reporting functions with the seasonality of our business.

In July 2014, the Company acquired its UGG brand distributor that sold to retailers in Germany and now operates a wholesale business in Germany through the newly acquired subsidiary. The acquisition included certain intangible and tangible assets and the assumption of liabilities. The purchase price of the acquisition was not material to the Company’s condensed consolidated financial statements.

We sell our brands through quality domestic retailers and international distributors and retailers, as well as directly to end-user consumers through our E-Commerce business and our retail stores.  Independent third parties manufacture all of our products.

As contemplated by the Securities and Exchange Commission (SEC) under Rule 10-01 of Regulation S-X, the accompanying condensed consolidated financial statements and related footnotes have been condensed and do not contain certain information that will be included in the Company’s annual consolidated financial statements and footnotes thereto.  For further information, refer to the consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on March 3, 2014 (Annual Report).

Use of Estimates

(b)Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in accordance with United States generally accepted accounting principles (US GAAP) requires management to make estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes.  Management bases these estimates and assumptions upon historical experience, existing and known circumstances, authoritative accounting pronouncements and other factors that management believes to be reasonable.  Significant areas requiring the use of management estimates relate to inventory write-downs, accounts receivable reserves, returns liabilities, stock compensation, performance based compensation, impairment assessments, depreciation and amortization, income tax liabilities and uncertain tax positions, fair value of financial instruments, and fair values of acquired intangibles, assets and liabilities, including estimated contingent consideration payments.  Actual results could differ materially from these estimates.

Recent Accounting Pronouncement

(c) Recent Accounting Pronouncement

On May 28, 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in US GAAP when it becomes effective. The new standard is effective for the Company on April 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

XML

Net Income per Share Net Income per Share (Additional Information) (Details)	3 Months Ended				9 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2014		Dec. 31, 2013
Reconciliations of basic to diluted weighted-average common shares outstanding
Weighted-average shares used in basic computation	34,537,000		34,541,000		34,598,000		34,496,000
Dilutive effect of stock-based awards	316,000	[1]	352,000	[1]	314,000	[1]	359,000	[1]
Weighted-average shares used for diluted computation	34,853,000		34,893,000		34,912,000		34,855,000
Excluded NSUs
Options excluded in the computation of diluted income per share
Options excluded in the computation of diluted income per share (in shares)	140,000	[1]	0	[1]
Excluded restricted stock units (RSUs)
Options excluded in the computation of diluted income per share
Options excluded in the computation of diluted income per share (in shares)	642,000	[1]	795,000	[1]
Excluded stock appreciation rights (SARs)
Options excluded in the computation of diluted income per share
Options excluded in the computation of diluted income per share (in shares)	525,000	[1]	525,000	[1]

[1] The share-based awards that were excluded from the dilutive effect were excluded because necessary conditions had not been satisfied for the shares to be issuable based on the Company’s performance through the three and nine months ended December 31, 2014 and 2013, respectively. The excluded awards include the maximum amounts achievable for these awards.

XML

Accumulated Other Comprehensive Loss (AOCL) (Tables)

9 Months Ended

Dec. 31, 2014

Equity [Abstract]

Components of accumulated other comprehensive loss

Accumulated balances of the components within accumulated other comprehensive loss were as follows:

	December 31, 2014			March 31, 2014
Unrealized loss on foreign currency hedging, net of tax	$	—		$	(759	)
Cumulative foreign currency translation adjustment, net of tax	(12,431		)	(1,284		)
Accumulated other comprehensive loss	$	(12,431	)	$	(2,043	)

XML

Fair Value Measurements (Narrative) (Details) (USD $)	9 Months Ended
	Dec. 31, 2014	Sep. 30, 2012
Contingent Consideration Arrangement
Reconciliation of beginning and ending amounts related to the fair value for contingent consideration for acquisition of business, categorized as Level 3
Balance at the beginning of the period	$ 30,000,000
Payments	(500,000)
Change in fair value	(1,800,000)
Balance at the end of the period	27,700,000
Sanuk | Contingent Consideration Arrangement
Contingent consideration
Compound annual growth rate (CAGR) (as a percent)	14.90%
Gross profit range	71,000,000
Discount rate (as percent)	7.00%
Percentage point change to compound annual growth rate	5.00%
Effect of a five-percentage-point change to total liability	2,000,000
Hoka
Contingent consideration
Maximum contingent consideration payments		2,000,000
Hoka | Contingent Consideration Arrangement
Contingent consideration
Maximum contingent consideration payments		$ 2,000,000

XML

Condensed Consolidated Statements of Cash Flows (USD $)	9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Cash flows from operating activities:
Net income	$ 160,374,000	$ 144,682,000
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation, amortization and accretion	37,808,000	32,469,000
Change in fair value of contingent consideration	(1,559,000)	836,000
Provision for doubtful accounts, net	987,000	439,000
Provision for deferred income taxes	1,342,000	(3,925,000)
Stock compensation	9,450,000	10,732,000
Other	2,835,000	1,250,000
Changes in operating assets and liabilities:
Trade accounts receivable	(83,207,000)	(74,133,000)
Inventories	(81,742,000)	(2,496,000)
Prepaid expenses and other current assets	(29,843,000)	(51,141,000)
Income tax receivable	2,303,000	4,799,000
Other assets	(1,374,000)	(4,334,000)
Trade accounts payable	94,365,000	93,546,000
Contingent consideration	(364,000)	0
Accrued expenses	33,508,000	42,725,000
Income taxes payable	44,444,000	46,121,000
Long-term liabilities	3,400,000	4,788,000
Net cash provided by operating activities	192,727,000	246,358,000
Cash flows from investing activities:
Purchases of property and equipment	(66,663,000)	(67,725,000)
Purchases of intangibles and other assets, net	(9,489,000)	(5,368,000)
Net cash used in investing activities	(76,152,000)	(73,093,000)
Cash flows from financing activities:
Cash paid for shares withheld for taxes	(3,956,000)	(4,932,000)
Excess tax benefits from stock compensation	1,614,000	1,801,000
Cash paid for repurchases of common stock	13,306,000
Contingent consideration paid	(115,000)	0
Proceeds from issuance of short-term borrowing	199,784,000	310,728,000
Cash paid for repayment of short-term borrowings	(201,706,000)	(311,000,000)
Proceeds from Stock Options Exercised	0	52,000
Proceeds from mortgage loan	33,931,000	0
Mortgage loan origination costs	(338,000)	0
Repayment of mortgage principal	(157,000)	0
Net cash provided by (used in) financing activities	15,751,000	(3,351,000)
Effect of exchange rates on cash	(7,972,000)	2,620,000
Net change in cash and cash equivalents	124,354,000	172,534,000
Cash and cash equivalents at beginning of period	245,088,000	64,591,000
Cash and cash equivalents at end of period	369,442,000
Cash paid during the period for:
Income taxes	4,363,000	11,237,000
Interest	2,660,000	2,518,000
Non-cash investing and financing activities:
Accruals for purchases of property and equipment	2,593,000	2,283,000
Accruals for asset retirement obligations	297,000	1,936,000
Accruals for shares withheld for taxes	1,713,000	3,702,000
Write-off for shares exercised with a tax deficit	$ 0	$ 1,752

XML

Commitments and Contingencies

9 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Company is currently involved in various legal claims arising in the ordinary course of business.  Management does not believe that the disposition of these matters, whether individually or in the aggregate, will have a material effect on the Company’s financial position or results of operations.

Contingent Consideration.  In July 2011, the Company acquired the Sanuk brand, and the total purchase price included contingent consideration payments.  As of December 31, 2014, the remaining contingent consideration payment, which has no maximum, is 40.0% of the Sanuk brand gross profit in calendar year 2015 and is to be paid within 60 days following the end of the performance period.

As of December 31, 2014 and March 31, 2014, contingent consideration for the acquisition of the Sanuk brand of approximately $26,200 and $28,000, respectively, is included within long-term liabilities in the condensed consolidated balance sheets.  Refer to note 3 for further information on the contingent consideration amounts.

In September 2012, the Company acquired Hoka, and the total purchase price included contingent consideration payments with a maximum of $2,000.  As of December 31, 2014 and March 31, 2014, contingent consideration for the acquisition of the Hoka brand of approximately $1,500 and $1,800, respectively, is included within other accrued expenses and long-term liabilities in the condensed consolidated balance sheets.  Refer to note 3 for further information on the contingent consideration amounts.

Future Capital Commitments. As of December 31, 2014, the Company had approximately $7,000 of material commitments for future capital expenditures primarily related to equipment costs of its new distribution center and tenant improvements for retail store space in Japan and China.

Income Taxes.  The Company files income tax returns in the US federal jurisdiction and various state, local, and foreign jurisdictions.  When tax returns are filed, some positions taken are subject to uncertainty about the merits of the position taken or the amount that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which the Company believes it is more likely than not that the position will be sustained upon examination. Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement. The portion of the benefits that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying condensed consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.  With few exceptions, the Company is no longer subject to US federal, state, local, or non-US income tax examinations by tax authorities for years before 2008.

Although the Company believes its tax estimates are reasonable and prepares its tax filings in accordance with all applicable tax laws, the final determination with respect to any tax audits, and any related litigation, could be materially different from the Company’s estimates or from its historical income tax provisions and accruals.  The results of an audit or litigation could have a material effect on operating results or cash flows in the periods for which that determination is made.  In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties, or interest assessments.

The Company has ongoing income tax examinations in various state and foreign tax jurisdictions.  During the three and nine months ended December 31, 2014, the Company recorded an accrual for uncertain tax positions of approximately $200 and $2,200. In addition, accruals for interest and potential penalties of approximately $1,100 were recorded during the nine months ended December 31, 2014. The accrual relates to tax positions taken in prior years that are subject to examination.  The Company records accruals relating to interest and potential penalties related to income tax matters within interest expense. It is reasonably possible that approximately $300 of uncertain tax positions will be settled within the next 12 months.

Indemnification.   The Company has agreed to indemnify certain of its licensees, distributors, and promotional partners in connection with claims related to the use of the Company’s intellectual property.  The terms of such agreements range up to five years initially and generally do not provide for a limitation on the maximum potential future payments.  From time to time, the Company also agrees to indemnify its licensees, distributors and promotional partners in connection with claims that the Company’s products infringe the intellectual property rights of third parties.  These agreements may or may not be made pursuant to a written contract. In addition, from time to time, the Company also agrees to standard indemnfication provisions in commercial agreements in the ordinary course of business.

Management believes the likelihood of any payments under any of these arrangements is remote and would be immaterial.  This determination was made based on a prior history of insignificant claims and related payments.  There are no currently pending claims relating to indemnification matters involving the Company’s intellectual property.

XML

Fair Value Measurements (Levels 1-3) (Details) (Recurring basis, USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Mar. 31, 2014
Fair Value
Assets (Liabilities) at fair value
Nonqualified deferred compensation asset	$ 5,321	$ 4,534
Nonqualified deferred compensation liability	(5,321)	(4,534)
Designated derivatives liability		(832)
Contingent consideration for acquisition of business	(27,700)	(30,000)
Level 1
Assets (Liabilities) at fair value
Nonqualified deferred compensation asset	5,321	4,534
Nonqualified deferred compensation liability	(5,321)	(4,534)
Designated derivatives liability		0
Contingent consideration for acquisition of business	0	0
Level 2
Assets (Liabilities) at fair value
Nonqualified deferred compensation asset	0	0
Nonqualified deferred compensation liability	0	0
Designated derivatives liability		(832)
Contingent consideration for acquisition of business	0	0
Level 3
Assets (Liabilities) at fair value
Nonqualified deferred compensation asset	0	0
Nonqualified deferred compensation liability	0	0
Designated derivatives liability		0
Contingent consideration for acquisition of business	$ (27,700)	$ (30,000)

XML

Uncategorized Items	1/1/2013 - 3/31/2013 USD ($)
[us-gaap_PaymentsForRepurchaseOfCommonStock]	0

XML

Foreign Currency Exchange Contracts and Hedging (Tables)

9 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of gains and losses related to derivatives designated as hedging instruments

The following table summarizes the effect of foreign exchange contracts designated as cash flow hedging relationships on the condensed consolidated financial statements:

For the Nine Months Ended  December 31,	Amount of Gain (Loss) Recognized in OCI/L on Derivative (Effective Portion)			Location of Gain (Loss) Reclassified from AOCI/L into Income (Effective Portion)	Reclassified from AOCI/L into Income (Effective Portion)		Location of Amount Excluded from Effectiveness Testing	Gain (Loss) from Amount Excluded from Effectiveness Testing
2014	$	2,053		Net sales	$	1,226	SG&A	$	(79	)
2013	$	(3,253	)	Net sales	$	17	SG&A	$	22

The following table summarizes the effect of foreign exchange contracts not designated as hedging instruments on the condensed consolidated financial statements:

For the Nine Months Ended  December 31,	Location of Gain (Loss) Recognized in Income (Loss) on Derivatives	Amount of Gain (Loss) Recognized in Income (Loss) on Derivatives
2014	SG&A	$	5,909
2013	SG&A	$	727