Reportable Operating Segments

The Company performs an annual assessment of the appropriateness of its reportable operating segments during the third quarter of its fiscal year. However, due to known circumstances arising during the three months ended June 30, 2018, management performed this assessment during this period. These circumstances included quantitative factors, such as the actual and forecasted sales and operating income of the wholesale operations of the HOKA brand compared to the Company's other reportable operating segments, as well as qualitative factors such as the ongoing growth of, and the Company's increased investment in, the wholesale operations of the HOKA brand. As a result, the Company added a sixth reportable operating segment to separately report the wholesale operations of the HOKA brand. The wholesale operations of the HOKA brand are no longer presented under the Other brands reportable operating segment. However, the DTC operations of the HOKA brand continue to be reported under the DTC reportable operating segment. Prior periods presented were reclassified to reflect this change.

The Company's six reportable operating segments now include the worldwide wholesale operations for each of the UGG brand, HOKA brand, Teva brand, Sanuk brand, and Other brands, as well as DTC. The Other brands reportable operating segment primarily consists of the Koolaburra brand and includes other discontinued brands in the prior period presented. Information reported to the CODM, who is the Company's Principal Executive Officer, is organized into these reportable operating segments and is consistent with how the CODM evaluates performance and allocates resources. The Company does not consider international operations a separate reportable operating segment, and the CODM reviews such operations in the aggregate with the aforementioned reportable operating segments. Inter-segment sales from the Company’s wholesale reportable operating segments to the DTC reportable operating segment are at the Company’s cost, and there is no inter-segment profit on these inter-segment sales, nor are they reflected in income (loss) from operations of the wholesale reportable operating segments.

The Company evaluates reportable operating segment performance primarily based on net sales and income (loss) from operations. The wholesale operations of each brand are managed separately because each requires different marketing, research and development, design, sourcing, and sales strategies. The income (loss) from operations for each of the reportable operating segments include only those costs which are specifically related to each reportable operating segment, which consist primarily of cost of sales, research and development, design, sales and marketing, depreciation, amortization, and directly related costs of employees and their respective expenses. The Company does not allocate corporate overhead costs or non-operating income and expenses to reportable operating segments, which include unallocable overhead costs associated with distribution centers, certain executive and stock compensation, accounting, finance, legal, information technology, human resources, and facilities, among others

Reportable operating segment information, with a reconciliation to the condensed consolidated statements of comprehensive loss, is summarized as follows:



	Three Months Ended June 30,
	2018		2017
Net sales
UGG brand wholesale	$	81,353	$	63,273
HOKA brand wholesale	39,954		26,538
Teva brand wholesale	33,196		32,123
Sanuk brand wholesale	20,503		22,220
Other brands wholesale	2,637		427
Direct-to-Consumer	72,951		65,136
Total net sales	$	250,594	$	209,717



	Three Months Ended June 30,
	2018			2017
Income (loss) from operations
UGG brand wholesale	$	5,869		$	(1,021	)
HOKA brand wholesale	5,728			1,259
Teva brand wholesale	8,064			4,943
Sanuk brand wholesale	4,200			4,417
Other brands wholesale	350			(233		)
Direct-to-Consumer	(7,424		)	(12,102		)
Unallocated overhead costs	(56,201		)	(53,519		)
Total loss from operations	$	(39,414	)	$	(56,256	)

Assets allocated to each reportable operating segment include accounts receivable, net of allowances and inventory, net of reserves, fixed assets, goodwill, other intangible assets, and certain other assets that are specifically identifiable for one of the Company's reportable operating segments. Unallocated assets are those assets not directly related to a specific reportable operating segment and generally include cash and cash equivalents, deferred tax assets, and various other corporate assets shared by the Company's reportable operating segments.

Assets allocated to each reportable operating segment, with a reconciliation to the condensed consolidated balance sheets, are as follows:



	June 30, 2018		March 31, 2018
UGG brand wholesale	$	375,499	$	229,894
HOKA brand wholesale	77,230		65,943
Teva brand wholesale	64,282		85,980
Sanuk brand wholesale	61,676		79,322
Other brands wholesale	30,283		8,866
Direct-to-Consumer	96,319		112,355
Total assets from reportable operating segments	705,289		582,360
Unallocated cash and cash equivalents	417,851		429,970
Unallocated deferred tax assets	37,443		38,381
Unallocated other corporate assets	226,137		213,668
Total assets	$	1,386,720	$	1,264,379