Deckers Outdoor Corp

Supply chain and procurement · Supplier operation and dependance

We rely upon independent manufacturers for all of our production needs, and the failure of these manufacturers to manage these responsibilities would prevent us from filling customer orders, which would result in loss of sales and harm our relationships with customers. The majority of which are located in Southeast Asia, predominantly in Vietnam and Indonesia, which exposes us to geographic concentration risk.

Core operations · Capacity utilization and efficiency

If we overestimate demand for any products or styles, we may be forced to increase promotional activity or adjust pricing to sell excess inventories, which would result in lower sales and reduced gross margin. On the other hand, if we underestimate demand, or if our independent manufacturing facilities are unable to supply products in sufficient quantities or on a timely basis, we may experience inventory shortages that may prevent us from fulfilling customer orders.

Core operations · Operational disruption and business continuity

We rely upon a broad network of warehouses and distribution facilities to store, sort, package and distribute our products. Disruptions to these networks, including labor shortages or disputes, capacity constraints, fuel and freight cost volatility, routing inefficiencies, or infrastructure limitations could increase delivery times, delay inbound or outbound shipments, strain distribution capacity, increase fulfillment and other costs, and impair our ability to efficiently receive, store, and distribute products.

Supply chain and procurement · Geographic concentration of suppliers

We rely upon independent manufacturers and their respective material suppliers for all of our production needs, the majority of which are located in Southeast Asia, predominantly in Vietnam and Indonesia, which exposes us to geographic concentration risk, including risks arising from regional economic, political, environmental, or operational conditions.

Supply chain and procurement · Raw material availability and cost volatility

Sheepskin is in high demand and sourced primarily from Australia and processed largely by two tanneries in China capable of meeting our quality, volume, and animal welfare standards. This geographic and supplier concentration exposes us to supply disruption risk. If suppliers of sheepskin, including tanneries involved in its processing, sugarcane-derived EVA, or other materials are unable to meet our quality, sustainability, or volume requirements, or if their operations are disrupted or cease, we may not be able to obtain adequate quantities of these materials or suitable substitutes on acceptable terms, or at all.

Human capital and workforce · Talent acquisition and retention

To execute our growth plan, we must continue to attract and retain highly qualified talent, including executive officers and key employees. Competition for executive officers, key employees, and skilled talent is intense within our industry, and we continue to experience upward pressure on compensation costs. If our overall employment proposition, including compensation, benefits, culture, work model, or career development opportunities, is not perceived as favorable relative to other employers, our ability to attract, hire, and retain qualified personnel could be adversely affected.

Human capital and workforce · Key personnel dependence and succession

The continued service of our executive officers and key employees is particularly important, and the departure of such talent may disrupt our business or result in the depletion of significant institutional knowledge. The loss of one or more of our executive officers or other key employees or significant turnover in our senior management, and the often-extensive process of identifying and hiring other talent to fill those key positions, could have a material adverse effect on our results of operations.

Customer and revenue · Changing customer preferences and behavior

The footwear, apparel, and accessories industry is subject to rapid changes in consumer preferences and fashion tastes, which makes it difficult to anticipate demand for our products and forecast our results of operations. Our success depends, in part, on brand loyalty, and there can be no assurance that consumers will continue to prefer our brands.

Market position and competition · Competitive pressure and market share loss

The footwear, apparel, and accessories industry is highly competitive and subject to rapidly changing consumer preferences. If we are unable to compete effectively, we could experience a decline in market share, reduced demand for our products, pricing pressure, or damage to our reputation, which could have a material adverse effect on our financial condition and results of operations.

Market position and competition · Pricing pressure and margin compression

Consistent with these dynamics, we have experienced, and expect to continue to experience, pricing and promotional pressure across our brands and channels, particularly during periods of elevated industry inventory levels or inflationary pressure. Increased discounting or promotional activity by competitors may require us to reduce prices or increase promotions to remain competitive, negatively affecting our gross margin and results of operations.

Customer and revenue · Customer concentration and key customer dependence

As of March 31, 2026, one customer represents 18.5% of trade accounts receivable, net, which is generally unsecured and exposes us to collection risk that could affect our results of operations and liquidity. The loss of a key customer, or a significant reduction in orders, could result in lower sales, excess inventory and related write-downs, and materially and adversely affect our financial condition or results of operations.

Innovation and product development · Product development and randd investment risks

Our success relies in part on our continued innovation in both the materials we use and the design of our footwear. If we fail to introduce technical innovation in our products in a timely or commercially successful manner, or experience issues with the quality of our products or materials, consumer demand for our products could decline and we may experience reputational damage.

Strategic execution · Geographic expansion and market entry

As part of our overall growth strategy, we seek to enhance the positioning of our brands, diversify our product offerings, extend our brands into complementary product categories and markets, expand geographically, and optimize our retail presence both in stores and online. If we are unable to identify new retail locations with consumer traffic sufficient to support a profitable sales level or elevate our brand market positioning, our retail growth may be limited, and we may be unable to avoid losses or negative cash flows from these locations.

Strategic execution · Merger acquisition and divestiture risks

As part of our overall strategy, we may periodically consider strategic acquisitions to expand our brands into complementary product categories and markets, or to acquire new brands, technologies, intellectual property, or other assets. Such acquisitions involve numerous risks, challenges, and uncertainties, including the potential to expose us to risks inherent in entering into new markets or geographic regions, lose significant customers or key personnel of the acquired business, and encounter difficulties integrating and managing acquired assets.

Economic and market conditions · Consumer spending and confidence

Volatile economic conditions and changes in the market have affected, and may continue to affect, consumer confidence and discretionary spending. A significant portion of our HOKA brand and UGG brand products are premium, discretionary purchases, and demand for these products is sensitive to macroeconomic factors, including inflation, wages and employment, consumer debt, declines in net worth driven by market conditions, interest rates, tariffs, and public health issues such as a pandemic.

Natural and catastrophic events · Climate change and environmental impact

Natural disasters and other catastrophic events, including those associated with climate change and extreme weather conditions, may disrupt our operations, supply chain, international markets, and the global economy. In addition, climate-related regulatory developments and evolving standards may require us to incur significant capital expenditures or other costs to enhance the resiliency of our infrastructure, comply with legal requirements, or implement mitigation measures.

Natural and catastrophic events · Natural disasters and extreme weather

Our business is subject to interruption from events such as extreme weather, power shortages, pandemics, war, political instability, terrorism, and failures of infrastructure or communications systems. Although we maintain disaster and business continuity plans designed to support critical operations and information systems, these events could disrupt our operations, impair employee availability, damage facilities, interrupt supply chains, or compromise the integrity of our IT systems.

Geopolitical and trade · Trade policies tariffs and sanctions

Our reliance on independent manufacturers and suppliers located primarily in Southeast Asia exposes us to risks associated with unpredictable and evolving international trade policies, regulatory environments, and geopolitical conditions that could materially increase our costs, disrupt our global supply chain, and adversely affect our results of operations. The majority of raw materials and components used by our independent manufacturers are sourced from designated suppliers, and tariffs, duties, or other trade restrictions may be imposed, modified, or expanded with limited notice.

Technology infrastructure · Technology systems and infrastructure failure

We could face a significant disruption in our domestic warehouse and DC operations if our warehouse management system does not perform as anticipated or ceases to function for an extended period of time, which could occur due to damage to the facility, failure of software or equipment, cyber-security incidents, power outages or similar problems.

Reputation and brand · Esg environmental social governance performance

Investors, advocacy groups, customers, consumers, employees, regulators, and other stakeholders are increasingly scrutinizing companies' ESG practices and disclosures, including the social and environmental impacts of their operations. Despite our efforts, our ESG practices, the pace at which we implement related initiatives, or our disclosures may not meet evolving stakeholder expectations. Perceptions regarding our ESG priorities, whether viewed as over- or under-emphasized, could adversely affect customer demand, employee recruitment and retention, or investor relations, or lead to reputational harm, regulatory action, or litigation.