Deckers Brands filed an investor presentation in connection with Deckers’ upcoming 2017 Annual Meeting of Stockholders to be held on December 14, 2017. The presentation and other important information related to the annual meeting can be found on Deckers’ website at votedeckers.com. 
Highlights of the Deckers presentation include:
Deckers’ Board and management team are driving results:
Deckers’ stock performance has significantly outperformed its proxy peers, with gains of approximately 143 percent over the past two years, compared to approximately 85 percent for its proxy peers.
Non-GAAP EBIT has significantly expanded and revenue has grown in fiscal year 2018, even while turning off unprofitable streams (e.g., retail closures and wholesale account rationalization).
Deckers expects its strategic initiatives to lead to an increase of 380 basis points in operating profit margin from fiscal year 2017 to fiscal year 2020.
Highlights of the Deckers presentation include:
Deckers’ Board and management team are driving results:

  • Deckers’ stock performance has significantly outperformed its proxy peers, with gains of approximately 143 percent over the past two years, compared to approximately 85 percent for its proxy peers.
  • Non-GAAP EBIT has significantly expanded and revenue has grown in fiscal year 2018, even while turning off unprofitable streams (e.g., retail closures and wholesale account rationalization).
  • Deckers expects its strategic initiatives to lead to an increase of 380 basis points in operating profit margin from fiscal year 2017 to fiscal year 2020.

Deckers’ Board and management team are executing on a marketplace transformation focused on:

  • Delivering a premium brand experience to the consumer, elevating the Ugg brand to drive sales, implementing a multi-season and multi-brand product strategy with a broader lifestyle offering, positioning all brands for sustained growth, exploiting the Hoka One One brand and growing internationally.
  • Evolving the organization to address the changing marketplace by merging office and brand groups to facilitate better collaboration, creating greater efficiencies in our supply chain and enhancing its leadership team at the corporate and brand level.
  • Increasing operating profits by right-sizing the retail store fleet, further reducing development time, optimizing material usage and leveraging previous investments and corporate best practices.
  • The Deckers Board, a composite of experienced and engaged individuals, is committed to enhancing stockholder value and is actively overseeing the transformation.
  • Deckers’ directors bring the right set of skills and experience to define Deckers’ corporate strategy, with seven of nine directors being current or former CEOs, CFOs, COOs or Chief Administrative Officers of major public companies.
  • The Board undergoes a rigorous annual self-evaluation process to ensure that it has the most effective composition for creating and sustaining stockholder value.
  • The Board authorized the hiring of a third-party consultant to explore cost savings opportunities in 2016, and recently completed a comprehensive review of strategic alternatives. In October 2017, the Board announced a $400 million stock repurchase program, and is targeting $100 million of repurchases by the end of March 2018.

In contrast, Marcato’s proposals are not in the best interest of Deckers’ stockholders and pose a serious threat to stockholder value. For example, Marcato:

  • Nominated a slate of unqualified and unvetted director candidates, most of which have never before served on a public board of directors and many of whom have no C-level executive experience.
  • Proposes a drastic reduction in store count, which would require a significant cash outlay and result in the loss of profitable stores. These actions would run counter to Deckers’ omni-channel strategy, which positions the company closer to the consumer and seeks to elevate the brand experience.
  • Suggests that Deckers should divest its non-Ugg brands. Marcato’s lack of understanding of Deckers’ business model would return the company to a more seasonal business that is entirely dependent on Ugg, just as non-Ugg brand profits are improving.
  • Recommends a cost savings plan that offers no pathway for growth, and that would require significant store closures. It also returns Deckers to dependence on wholesalers and distributors whose own business model is under significant pressure.
  • Supports a short-sighted and inherently risky increase in leverage, which would make it more difficult to handle short-term headwinds to the business.

Deckers’ Board of Directors unanimously recommends that stockholders vote “FOR” ALL of Deckers’ nominees listed on the WHITE proxy card.

Marcato Capital Management LP, which is seeking to replace the entire Deckers board with its own candidates at the company’s upcoming annual meeting, on November 13 released a detailed presentation promoting its plan to drive long-term stockholder value at Deckers.

Photo courtesy Ugg