Deckers Draws On All Three Brands for Q1 Sales Jump

Deckers Outdoor Corporation saw net sales increase 29.6% to $72.6 million for the first quarter from $56.0 million last year. Gross margin increased 210 basis points to 46.2% from 44.1% a year ago, while diluted EPS increased 70.5% to 75 cents from 44 cents last year.

Angel Martinez, president and CEO, stated, “We begin 2007 with a solid first quarter highlighted by double digit sales increases for Teva®, UGG® and Simple®. Our ability to once again exceed expectations was primarily driven by strong full price selling for the UGG® brand coupled with positive consumer reaction to our reengineered Teva® product line, which underscores our ongoing efforts to revitalize the brand at retail and our strategic decision to target a younger, more active demographic. At the same time, Simple® continued to gain important shelf space at retail while further building its leadership position in sustainable footwear. Looking ahead, we believe we are well positioned to capitalize on our future growth opportunities and we remain confident in our ability to achieve both our near- and long-term objectives.”

Segment Summary

Teva

Teva brand net sales for the first quarter increased 11.6% to $38.7 million compared to $34.7 million for the same period last year. Sales were driven by demand for new styles, particularly the performance water series featuring higher price point products such as the Karnali Wraptor, Toachi and Sunkosi, along with solid sell-through of men's and women's casuals including updated versions of the Dozer.

UGG

UGG brand net sales for the first quarter increased 67.7% to $29.8 million compared to $17.8 million for the same period a year ago. The improvement in sales was attributable to greater demand and increased distribution for the expanded spring line which now consists of espadrilles, sandals, flip flops and boots.

Simple

Simple brand net sales increased 14.0% to $4.0 million for the first quarter compared to $3.5 million for the same period last year. Simple product sales were up year-over-year as a result of heightened brand awareness, a broader product assortment, and the addition of several new influential accounts, including Urban Outfitters, Bloomingdales, David Z. and Kitson.

Consumer Direct

Sales for the Consumer Direct business, which are included in the brand sales numbers above, increased 69.7% to $11.1 million compared to $6.5 million for the same period a year ago, mostly due to an increase in UGG Brand internet sales. In addition, results for the first quarter of 2007 included sales from the Company's new UGG Brand flagship store in New York City and two new retail outlet stores in Wrentham, MA and Riverhead, NY, which were not in operation in the first quarter of 2006.

Full-Year 2007 Outlook

The company increased its full year revenue growth target to approximately 25% over 2006, up from previous guidance of approximately 15%.

The company increased its full year diluted earnings per share growth target to approximately 15% over 2006 before the impairment charge, up from previous guidance of approximately 5%.

Fiscal 2007 guidance includes approximately $5.2 million of stock compensation expense, an increase of $3.1 million over 2006.

Second Quarter Outlook

The company currently expects second quarter 2007 revenue to increase approximately 15% and diluted earnings per share to decrease approximately 80% compared to 2006.

                   DECKERS OUTDOOR CORPORATION
                           AND SUBSIDIARIES
             Condensed Consolidated Statements of Income
                             (Unaudited)
          (Amounts in thousands, except for per share data)


                                              Three-month period ended
                                                     March 31,
                                              ------------------------
                                                 2007         2006
                                              ------------ -----------

Net sales
                                             $     72,575      56,004
Cost of sales                                      39,054      31,304
                                              ------------ -----------
 Gross profit                                      33,521      24,700

Selling, general and administrative expenses       18,345      15,786
                                              ------------ -----------
 Income from operations                            15,176       8,914

Other (income) expense
 Interest, net                                       (989)       (580)
 Other                                                  1       - - -
                                              ------------ -----------
Income before income taxes                         16,164       9,494

Income taxes                                        6,466       3,845
                                              ------------ -----------

Net income
                                             $      9,698       5,649
                                              ============ ===========

Net income per share:
 Basic
                                             $       0.77        0.45
 Diluted                                             0.75        0.44
                                              ============ ===========

Weighted-average shares:
 Basic                                             12,595      12,468
 Diluted                                           12,932      12,763
                                              ============ ===========