Attention: | Mr. Jay Ingram | |
Branch Chief | ||
Office of Manufacturing and Construction | ||
Re: | Deckers Outdoor Corporation | |
Form 10-K for Fiscal Year Ended March 31, 2018 | ||
Filed May 30, 2018 | ||
Form 8-K | ||
Filed January 31, 2019 | ||
File No. 001-36436 |
1. | We note the disclosures of GAAP financial measures to non-GAAP financial measures included in your earnings release. Although the income statements presented are not identical to your interim income statements prepared in accordance with GAAP, your presentation does not appear in compliance with Question 102.10 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations and Item 10(e)(1)(i)(A) of Regulation S-K which precludes presenting a full non-GAAP income statement when reconciling non-GAAP financial measures to the most directly comparable GAAP financial measures since it places undue prominence on the non-GAAP financial measures and may give the impression that the non-GAAP income statement is a comprehensive basis of accounting. Please revise your disclosures accordingly. |
• | Non-GAAP financial measures are not presented in the Earnings Release in a manner that results in their undue prominence relative to the corresponding GAAP financial measures. The GAAP financial measures are generally presented before the non-GAAP financial measures throughout the Earnings Release. In addition, the non-GAAP financial measures are generally not presented in bold font, larger font or italicized font, or in any other manner intended to emphasize them relative to the GAAP financial measures. The Company’s cautious approach to the disclosure of the non-GAAP financial measures within the Earnings Release is consistent with the SEC guidance, including a number of the disclosure examples provided in Question 102.10 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations. |
• | The Earnings Release includes an appropriate disclaimer regarding the Company’s use of non-GAAP financial measures. The Company provided a disclaimer that confirms the non-GAAP financial measures presented in the Earnings Release should not be afforded greater weight than the GAAP financial measures. It states, in pertinent part, that the non-GAAP financial measures “are not intended to represent, and should not be considered to be more meaningful measures than, or alternatives to, measures of operating performance as determined in accordance with GAAP.” The disclaimer is presented in a prominent manner under the heading “Non-GAAP Financial Matters.” The disclaimer is comprehensive and consistent with market practice. The disclaimer is referenced at the beginning of the press release, and also precedes the reconciliation of the GAAP financial measures to the Non-GAAP financial measures. |
• | The Company’s GAAP financial statements precede the disclosure of the reconciliation of the non-GAAP measures to the most directly comparable GAAP financial measures. In the Earnings Release, the Company presents its “Consolidated Statements of Comprehensive Income (Loss)” and “Consolidated Balance Sheets”, both of which are presented in accordance with GAAP, prior to the presentation of the reconciliation of GAAP financial measures to non-GAAP financial measures. This presentation clearly gives greater prominence to the GAAP financial measures relative to the non-GAAP financial measures, especially when read in combination with the disclaimer referenced above. |
• | The Company presents a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures. Consistent with the requirements of the Non-GAAP Disclosure Guidance, the Earnings Release includes a reconciliation of GAAP financial measures to non-GAAP financial measures. The reconciliation was not presented for the purpose |
• | A full non-GAAP income statement was not presented in the reconciliation. The Non-GAAP Disclosure Guidance indicates that presenting a full non-GAAP income statement when reconciling non-GAAP financial measures to GAAP financial measures could result in the disclosure of the non-GAAP financial measures being more prominent. However, as the Staff expressly acknowledges in the Letter, the Company has not presented a full non-GAAP income statement in the reconciliation and, in fact, the Company specifically excluded multiple line items from the GAAP income statement in presenting the reconciliation. These items were excluded both in response to concerns about presenting a full non-GAAP income statement, and because the Company believed the exclusion of certain items allowed it to emphasize the specific adjustments it was making to the GAAP financial measures. In addition, the presentation of the reconciliation is only one factor to be considered in determining if non-GAAP financial measures have been given undue prominence in a particular disclosure. When considered in light of the overall disclosure of information within the Earnings Release, the Company does not believe investors will be left with the impression that the non-GAAP income statement is a comprehensive basis of accounting, or that non-GAAP financial measures have been presented in a manner so as to give them undue prominence. |
2. | We note you present projected Non-GAAP Diluted EPS in your earnings release without presenting and reconciling to a corresponding GAAP amount. Please review the guidance provided in Question 102.10 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations when preparing your next earnings release. |
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