Deckers Outdoor Bangs Out 40 Percent Q4 Revenue Gain

“We are coming off a very strong period of growth in 2011 driven by investments in product development, marketing and advertising, and international and retail expansion” continued Martinez. “We believe that each of these areas is critical to successfully developing global lifestyle brands, and we remain committed to these strategies going forward. With the addition of the Sanuk brand this July, we begin a new year with what we believe to be our strongest brand portfolio ever, with compelling growth prospects across our entire business as evidenced by our outlook for sales growth of 15 percent in 2012. Our projected top-line expansion, which includes a higher contribution from retail sales and the Sanuk brand, along with selective price increases compared with 2011, is helping offset our second consecutive year of significant cost headwinds mainly related to increases in sheepskin prices. We continue to pursue all available opportunities to further mitigate the impact of cost pressures and based on our initial visibility, we expect to experience relief beginning in 2013.”

Division Summary

Ugg Brand

Ugg brand net sales for the fourth quarter increased 37.7 percent to a record $568.5 million compared to $412.8 million for the same period last year. The sales gain was primarily attributable to higher sales in the United Kingdom and Benelux resulting from the conversion to wholesale operations in these markets, higher domestic wholesale sales, and an increase in sales at company-owned retail stores. For the full year, Ugg brand net sales increased 37.6 percent to a record $1.202 billion compared to $873.1 million in 2010.

Teva Brand

Teva brand net sales for the fourth quarter increased 45.9 percent to a record $19.4 million compared to $13.3 million for the same period last year. The sales improvement was driven by an increase in global shipments of closed-toe footwear. The fourth quarter of 2011 also benefited from the conversion to a wholesale business model in the United Kingdom. For the full year, Teva brand net sales increased 23.1 percent to a record $124.8 million compared to $101.3 million in 2010.

Sanuk Brand

Sanuk brand net sales were $11.0 million for the fourth quarter of 2011 and $26.6 million for the six months commencing on July 1, 2011, the acquisition date, and ending December 31, 2011.

Other Brands

Combined net sales of the Company’s other brands increased 23.1 percent to $5.0 million for the fourth quarter compared to $4.1 million for the same period last year. For the full year, combined net sales decreased 9.0 percent to $24.1 million versus $26.5 million in 2010, primarily due to the impact of phasing out the Simple brand, which we ceased distributing at the end of 2011.

Retail Stores

Sales for the retail store business, which are included in the brand sales numbers above, increased 36.5 percent to $98.8 million for the fourth quarter compared to $72.4 million for the same period last year. This increase was driven by 18 new stores opened after the fourth quarter of 2010. For the full year, sales for the retail store business increased 50.4 percent to $189.0 million compared to $125.6 million in 2010. For those stores that were open during the full year of 2010 and 2011, same store sales grew by 6.3 percent.

eCommerce

Sales for the eCommerce business, which are included in the brand sales numbers above, increased 12.6 percent to $67.1 million for the fourth quarter compared to $59.5 million for the same period last year. The increase in sales resulted from higher demand for the Ugg brand driven by new product introductions and enhanced marketing efforts combined with the launch of the Ugg brand’s United Kingdom website. For the full year, sales for the eCommerce business increased 16.0 percent to $106.5 million compared to $91.8 million in 2010.

Balance Sheet

At December 31, 2011, cash and cash equivalents were $263.6 million compared to $445.2 million at December 31, 2010. The decrease in cash and cash equivalents is primarily attributable to $125.2 million of cash payments associated with the acquisition of the Sanuk brand as well as a cash payment of approximately $20 million for land for a new headquarters facility.

Inventories at December 31, 2011 increased 102.6 percent to $253.3 million from $125.0 million at December 31, 2010. By brand, Ugg inventory increased $107.1 million to $201.8 million at December 31, 2011, Teva inventory increased $6.6 million to $29.3 million at December 31, 2011, and our other brands’ inventory decreased $1.5 million to $6.1 million at December 31, 2011. Sanuk brand inventories were $16.1 million at December 31, 2011. The increase in inventory from a year ago is fairly equally balanced between the growth in spring orders, inventory for our direct subsidiaries in the U.K. and Benelux, the addition of the Sanuk brand and growth of our consumer direct division, carryover product from the holiday period which will be utilized to fulfill orders during 2012, and an increase in product costs.

Goodwill and net intangible assets increased to $214.5 million at December 31, 2011 compared to $24.9 million at December 31, 2010, primarily due to the acquisition of the Sanuk brand.

Stock Repurchase Program

The Company also announced the Board’s approval to repurchase up to $100 million of the Company’s common stock in the open market or in privately negotiated transactions, in compliance with the Securities and Exchange Commission Rule 10b-18 from time to time, subject to market conditions, applicable legal requirements and other factors. The program does not obligate the Company to acquire any particular amount of common stock and the program may be suspended at any time at the Company’s discretion. The purchases will be funded from available cash and cash equivalents.