Business Segments

12 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Business Segments

Business Segments

The Company's accounting policies of the segments below are the same as those described in the summary of significant accounting policies (refer to Note 1), 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.

During the first quarter of fiscal year 2016, the Company changed its reportable operating segments to combine the previously separated E-Commerce and retail store operating components into one DTC reportable operating segment. After the reorganization, the Company has five reportable operating segments including the strategic business units for the worldwide wholesale operations of the UGG brand, Teva brand, Sanuk brand, other brands, and the DTC business. During the first quarter of fiscal year 2016, the Company’s other brands included Hoka One One® (Hoka), Ahnu®, Koolaburra® by UGG, TSUBO® and MOZO®.

The wholesale operations of each brand are managed separately because each requires different marketing, research and development, design, sourcing, and sales strategies. The income (loss) from operations for each of the segments includes only those costs which are specifically related to each segment, which consist primarily of cost of sales, costs for research and development, design, sales and marketing, depreciation, amortization, and the costs of employees and their respective expenses that are directly related to each business 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.

For the year ended March 31, 2015, the quarter ended (transition period) March 31, 2014 and the year ended December 31, 2013, certain reclassifications were made to conform to the current period presentation. These changes in segment reporting only changed the presentation within the below table and did not impact the Company's consolidated financial statements for any period. The segment information for prior periods has been adjusted retrospectively to conform to the current period presentation. Refer to Note 1 “The Company and Summary of Significant Accounting Policies”, Note 2 "Restructuring" and Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further disclosure and discussion of the change in segment reporting.

The Company converted three of its retail stores in China to partner retail stores during the year ended March 31, 2016 and seven during the year ended March 31, 2015. Upon conversion, each of these stores became wholly-owned and operated by third-parties in China. Sales made to the partner retail stores are included in the UGG brand wholesale segment and not included in the DTC segment as of the date of conversion.

Business segment information is summarized as follows:

	Years ended March 31,						Quarter ended (transition period) March 31,			Year ended December 31,
	2016			2015			2014			2013
Net sales to external customers:
UGG wholesale	$	918,102		$	903,926		$	83,271		$	818,377
Teva wholesale	121,239			116,931			45,283			109,334
Sanuk wholesale	90,719			102,690			28,793			94,420
Other brands wholesale	100,820			76,152			18,662			38,276
Direct-to-Consumer	644,317			617,358			118,707			496,211
	$	1,875,197		$	1,817,057		$	294,716		$	1,556,618
Income (loss) from operations:
UGG wholesale	$	246,990		$	269,489		$	13,595		$	224,738
Teva wholesale	17,692			13,320			6,425			9,166
Sanuk wholesale	15,565			21,914			7,530			20,591
Other brands wholesale	(4,384		)	(9,838		)	(758		)	(9,807		)
Direct-to-Consumer	101,756			150,320			20,918			132,532
Unallocated overhead costs	(215,492		)	(220,786		)	(48,118		)	(169,323		)
	$	162,127		$	224,419		$	(408	)	$	207,897
Depreciation and amortization:
UGG wholesale	$	2,107		$	5,029		$	137		$	641
Teva wholesale	54			94			33			641
Sanuk wholesale	6,556			6,969			1,769			7,761
Other brands wholesale	1,101			940			250			507
Direct-to-Consumer	18,931			21,088			5,209			21,861
Unallocated overhead costs	20,992			15,030			3,140			9,959
	$	49,741		$	49,150		$	10,538		$	41,370
Capital expenditures:
UGG wholesale	$	1,458		$	246		$	119		$	313
Teva wholesale	—			51			—			63
Sanuk wholesale	881			487			2			91
Other brands wholesale	51			351			26			477
Direct-to-Consumer	18,445			19,128			3,557			35,669
Unallocated overhead costs	45,351			71,590			13,916			43,217
	$	66,186		$	91,853		$	17,620		$	79,830
Total assets from reportable segments:
UGG wholesale	$	248,937		$	194,720		$	153,341		$	314,122
Teva wholesale	87,225			77,423			81,766			54,868
Sanuk wholesale	212,816			224,974			214,627			208,669
Other brands wholesale	65,072			53,634			41,281			34,315
Direct-to-Consumer	148,733			147,423			163,664			189,822
	$	762,783		$	698,174		$	654,679		$	801,796

Inter-segment sales from the Company’s wholesale segments to the Company’s DTC segment 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 DTC segment.

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 consolidated balance sheets are as follows:

	3/31/2016		3/31/2015
Total assets from reportable segments	$	762,783	$	698,174
Unallocated cash and cash equivalents	245,956		225,143
Unallocated deferred tax assets	20,636		29,083
Other unallocated corporate assets	248,693		217,533
Consolidated total assets	$	1,278,068	$	1,169,933