DECK

DECKERS OUTDOOR CORP

NYSE · MATERIALS · RUBBER & PLASTICS FOOTWEAR

84.59

−2.78 −3.18%

USD · close Oct 21

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MKT CAP $11.5BP/E 12.0DIV YIELD —FCF YIELD 9.69%REV TTM $5.5B +7.9%NET INCOME $1B +2.5%NET CASH —52W 77.51 – 120.94SEC XBRL · TTM TO Invalid Date

How DECK rewrote its risk factors

10-K ITEM 1A · FY2025 → FY2026

Text kept

11%

of sentences unchanged

Added

229

new sentences

Dropped

266

sentences removed

Length

−1,430

words, now 10,087

New in FY2026

Refer to the section entitled “Cautionary Note Regarding Forward-Looking Statements” within this Annual Report for further information.
Table of Contents 13 Risks Related to Our Business and Industry The footwear, apparel, and accessories industry is subject to rapid changes in consumer preferences, and if we do not accurately anticipate and promptly respond to consumer demand and spending patterns, we could lose sales, our relationships with customers could be harmed, and our brand loyalty could be diminished.
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.
Consumer demand for our products relies on the continued strength of our brands, which in turn depends on our ability to anticipate, understand, and respond promptly to evolving preferences, fashion trends, and consumer spending patterns with appealing merchandise and effective brand-building initiatives.
As our brands and product offerings evolve, our products must appeal to a broader and more diverse range of consumers whose preferences cannot be predicted with certainty.
New products may not achieve market acceptance, including due to pricing that consumers are unwilling to bear, or our brands may fall out of favor, which could impede our ability to maintain or grow sales, adversely affect brand perception, and negatively impact our results of operations.
If we do not effectively respond to these changes, we could experience reduced sales and pressure on our gross profit as a percentage of net sales ( gross margin ), including as a result of reduced pricing power and increased reliance on promotional activity .
The value of our brands is also driven by evolving consumer perceptions, including shifting ethical, political, or social standards.
Concerns related to product pricing, quality, design, technical performance, components or materials (including sustainability), customer service, or the effectiveness of our brand loyalty initiatives, including loyalty programs, could result in negative perceptions, diminished consumer engagement, and a loss of brand loyalty or value.
These risks may be amplified by adverse publicity concerning us or our products, brands, marketing campaigns, partners, or endorsers, particularly where social media and digital marketing channels accelerate the dissemination, amplification, or persistence of negative claims, regardless of their accuracy, which could harm our reputation and sales and have a material adverse effect on our business.
In addition, actions or statements by third‑party partners, collaborators, or organizations with which we are associated, including in connection with social or political issues, could lead to consumer backlash, operational disruptions, or reputational harm.
If our brand- related initiatives, including loyalty programs, fail to drive sustained consumer engagement or incremental demand, or involve increased costs or operational complexity that negatively affect customer perceptions, we could experience reduced sales and pressure on our gross margin , adversely affecting our results of operations.
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.
During periods of economic uncertainty, consumers may reduce discretionary purchases, trade down to lower-priced alternatives, or delay buying decisions, which could require us to increase promotional activity or reduce prices, adversely affecting our sales and profitability .
We sell a significant portion of our products through higher-end specialty and department store retailers and online marketplaces .
These customers may be adversely affected by economic conditions, geopolitical instability, foreign currency fluctuations, reduced demand for premium products, limited access to credit, and increased competition.
Financial difficulties among our customers could negatively affect our credit exposure, reserves, and relationships with key customers, and could reduce orders or increase the risk of delayed payments or defaults.
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.
Competition in our markets is influenced by factors such as Table of Contents 14 brand recognition, product innovation and performance, pricing, speed‑to‑market, marketing effectiveness, use of data analytics and AI , access to manufacturing capacity, and control of distribution channels.
Our competitors include both established global brands and newer market entrants, including competitors whose broader product assortments and higher sales volumes may be more important to certain customers.
We believe that the growth and visibility of our HOKA brand and UGG brand have attracted competitors specifically targeting the categories in which we operate.
Barriers to entry have been reduced by access to offshore manufacturing and evolving technologies, allowing competitors to develop and scale products more quickly and at lower cost.
Some of our competitors also have substantially greater financial, technological, manufacturing, marketing, and distribution resources than we do, as well as broader brand awareness, which may enable them to compete more effectively on price, accelerate product development, leverage advanced data analytics or AI , adapt to technological changes, and withstand periods of excess inventory or reduced consumer demand.
As a result, we face ongoing competition for customer relationships and distribution channels, including competition for preferred access to key retail accounts, shelf space, and digital visibility.
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, and could cause consumers to shift purchases to competing products.
In addition, many of our key wholesale customers face intense competitive pressures, and deterioration in their financial condition could adversely affect their ability to do business with us.
I f we are unsuccessful at managing inventory planning, forecasting, and global supply chain execution, we may be unable to accurately forecast our inventory and working capital requirements, which may have a material adverse effect on our financial condition and results of operations.
This cycle requires us to incur significant expenses relating to the design, manufacturing, and marketing of our products in advance of the realization of sales, and results in significant liquidity requirements and working capital fluctuations throughout our fiscal year, which may be amplified by supplier performance issues and broader supply chain constraints.
As a result , these liquidity and working capital demands may limit our ability to adjust inventory levels and respond efficiently to changes in consumer demand, particularly during periods of macroeconomic uncertainty.
Our forecasting processes rely on assumptions, data, and systems that may not accurately reflect future consumer or customer demand, or supply chain conditions, including manufacturing capacity, raw material availability, and logistics constraints.
Further, variability and constraints within our global supply chain may drive higher inventory procurement positions that could negatively affect our working capital and gross margin as a result of selling excess quantities through close out channels.
As a result, our inventory levels, working capital requirements, and results of operations may be adversely affected by a number of factors, including: • constraints or inefficiencies in transportation capacity, delivery timing, inventory flow, or production scheduling, which may contribute to uneven inventory receipts, elevated inventory levels, or delays in fulfilling de mand; • unfavorable or unexpected weather patterns that affect consumer demand for seasonally-driven products, particularly within our UGG brand, which may be intensified by the effects of climate change; • changes in consumer preferences, discretionary spending patterns, prevailing fashion trends, and pricing pressure that may require increased promotional activity to sell inventory; • macroeconomic conditions, including inflation, interest rate volatility, or global economic uncertainty, that may affect consumer purchasing behavior, supplier capacity, or logistics costs; and • market acceptance of our products and competing offerings, and variability in product availability.
For example, 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 , and we may not be able to recover our investment in the development of new styles and product lines.
On the other hand, if we underestimate demand, or if our independent manufacturing facilities are unable to supply Table of Contents 15 products in sufficient quantities or on a timely basis, we may experience inventory shortages that may prevent us from fulfilling customer orders or result in delays in shipments to customers.
In either event, these factors could have a material adverse effect on our results of operations.
Our distribution operations depend on the effective functioning of global transportation and logistics networks, including ports, carriers, and third-party service providers.

and 189 more.

Gone since FY2025

Refer to the section entitled “Cautionary Note Regarding Forward-Looking Statements” within this Annual Report for additional information.
RISKS RELATED TO OUR BUSINESS AND INDUSTRY The footwear, apparel, and accessories industry is subject to rapid changes in consumer preferences, and if we do not accurately anticipate and promptly respond to consumer demand and spending patterns, including by successfully introducing new products, we could lose sales, our relationships with customers could be harmed, and our brand loyalty could be diminished.
The footwear, apparel, and accessories industry is subject to rapid changes in consumer preferences and fashion tastes, which make it difficult to anticipate demand for our products and forecast our financial results.
Our success is driven to some extent by brand loyalty, and there can be no assurance consumers will continue to prefer our brands.
Consumer demand for our products depends in part on the continued strength of our brands, which in turn depends on our ability to anticipate, understand, and promptly respond to the rapidly changing preferences and fashion tastes, as well as consumer spending patterns, with appealing merchandise.
As our brands and product offerings evolve, it is necessary for our products to appeal to an even broader range of consumers whose preferences cannot be predicted with certainty.
New footwear models that we introduce may not be successful with consumers or our brands may fall out of favor with consumers.
If we are unable to anticipate, identify, or react appropriately to changes in consumer preferences, our revenues may decrease, our brands’ image may suffer, our operating performance may decline, and we may not be able to execute our growth plans.
Even if we develop and manufacture new footwear products and collaborations that consumers find appealing, their ultimate success may depend on our pricing, and we may set the prices of new styles too high for the market to bear.
Further, the value of our brands is based on evolving consumer perceptions, including as a result of shifting ethical, political or social standards, and concerns with respect to product pricing, quality, design, technical performance, components or materials (including their sustainability), or customer service could result in negative perceptions and the loss of brand loyalty and value.
These concerns may be exacerbated by negative publicity regarding us or our products, brands, marketing campaigns, partners, or endorsers, which could adversely affect our reputation and sales regardless of the accuracy of such claims.
Social media and digital marketing campaigns, which accelerate the dissemination of information, can increase the challenges of containing negative claims.
If consumers perceive our brands negatively, whether or not warranted, our brand image would become tarnished and our products would become less desirable, which could have a material adverse effect on our business.
Failure to gain market acceptance for new products could impede our ability to maintain or grow current revenue levels, reduce profits, adversely affect the image of our brands, erode our competitive position, and result in long-term harm to our business and financial results.
Volatile economic conditions and changes in the market have affected, and may continue to affect, consumer spending generally and the buying habits and preferences of consumers.
A significant portion of the products we sell, especially those sold under the UGG and HOKA brands, are premium retail products.
The purchase of these products is discretionary and is therefore highly dependent upon the level of consumer confidence and discretionary spending.
Sales of these products may be adversely affected by variable economic factors, including worsening economic conditions, consumer confidence in future economic conditions, including recessionary concerns, changes to fuel, energy, labor, and healthcare costs, declines in income or asset values, and increases in consumer debt levels, inflation and interest rates, tariffs, and unemployment rates.
Uncertainty in global economic conditions may result in unpredictable consumer discretionary spending trends.
During an actual or perceived economic downturn, fewer consumers may shop for our products, and those who do may limit the amount of their purchases or seek less costly substitutes for our products.
As a result, we could be required to reduce the price we can charge for our products or increase our marketing and promotional expenses to generate additional demand for our products.
In either case, these changes could reduce our sales and profitability, which could have a material adverse effect on our financial condition and results of operations.
We sell a significant portion of our products through higher-end specialty and department store retailers, as well as through online marketplaces.
The businesses of these customers may be affected by factors such as changes in economic conditions, ongoing geopolitical conflicts and uncertainties, fluctuations in foreign currency exchange rates, failures or instability in the US banking system, reduced consumer demand for premium products, decreases in available credit, and increased competition.
If our customers face financial difficulties, it could have an adverse effect on our estimated allowances and reserves, and potentially result in us losing key customers.
The footwear, apparel, and accessories industry is highly competitive and subject to changing consumer preferences and tastes.
Our inability to compete effectively could cause our market share to decline, which could harm our reputation and have a material adverse effect on our financial condition and results of operations.
Our competitors include both established companies and newer entrants into the market.
In particular, we believe that, as a result of the growth of the UGG and HOKA brands, competitors have entered the marketplace specifically in response to the success of our brands, and other competitors may do so in the future, particularly as access to offshore manufacturing and changes in technology make it easier and more cost effective to compete.
A number of our larger competitors have significantly greater financial, technological, engineering, manufacturing, marketing, and distribution resources than we do, as well as greater brand awareness in the footwear, apparel, and accessories markets among consumers.
As a result, we have faced, and expect to continue to face, intense pressure with respect to competition for key customer accounts and distribution channels.
These competitors may have relationships with our key retail customers that are more important to those customers because of the significantly larger volume and product mix that our competitors sell to them.
Our competitors’ greater resources may enable them to more effectively compete on the basis of price and production, develop new products more quickly or with superior technical capabilities, adapt to changes in technology, including the successful utilization of data analytics, artificial intelligence, and machine learning, market their products and brands more successfully, identify or influence consumer preferences, increase their market share, withstand the effects of seasonality, and manage periodic downturns in the footwear, apparel, and accessories industry or in economic conditions.
As a result of these pressures, we have faced, and expect to continue to face, intense pricing pressure.
Efforts by our competitors to dispose of excess inventories may significantly reduce prices of competitive products, which may pressure us to reduce the pricing of our products to compete, or cause consumers to shift their purchasing decisions away from our products entirely.
Further, we believe that our key customers face intense competition from their competitors, which could negatively affect the financial stability of their businesses and their ability to conduct business with us.
If we are unsuccessful at managing product manufacturing decisions to offset the inherent seasonality of our business, we may be unable to accurately forecast our inventory and working capital requirements, which may have a material adverse effect on our financial condition and results of operations.
This cycle requires us to incur significant expenses relating to the design, manufacturing, and marketing of our products in advance of the realization of revenue from sales, and results in significant liquidity requirements and working capital fluctuations throughout our fiscal year.
Because this cycle involves long lead times, which require us to make manufacturing decisions months in advance of an anticipated purchasing decision by the consumer, it is challenging to manage our inventory and working capital requirements.
Further, supply chain disruptions may drive higher inventory procurement positions that could negatively affect our gross profit as a percentage of net sales (gross margin) as a result of selling excess quantities though close out channels.

and 226 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2025 ↗, FY2026 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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