Deckers Brands Reports Second Quarter Fiscal 2018 Financial Results and Raises Guidance for Full Year Fiscal 2018

• Second quarter fiscal 2018 sales of $482.5 million and diluted
  earnings per share of $1.54
• Gross margin expanded 220 basis points in the quarter
• Fiscal 2018 sales now anticipated to increase between 1% to 2% over
  fiscal 2017 and adjusted earnings per share expected to be in the
  range of $4.15 to $4.30
• Share repurchase authorization increased to $400 million

Deckers Brands (NYSE:DECK), a global leader in designing, marketing and
distributing innovative footwear, apparel and accessories, today
announced financial results for the second fiscal quarter ended
September 30, 2017.

Throughout this release, references to Non-GAAP financial measures
exclude the impact of certain restructuring and other charges.
Additional information regarding these Non-GAAP financial measures is
set forth under the heading "Non-GAAP Financial Measures" below.

"I am very pleased with the progress we have made, and continue to make,
executing on our operating profit improvement plan. Our goal remains to
achieve an incremental $100 million of operating profit by the end of
our fiscal year 2020, and operating margins of at least 13% by focusing
on full-priced selling, driving supply chain efficiencies, implementing
process improvements, reducing indirect spend, and closing retail stores
that do not meet our financial objectives," said Dave Powers, President
and Chief Executive Officer. "This quarter is yet another testament to
the power of our transformation, as we generated a 220 basis point
increase in gross margin and earnings per share that were ahead of
expectations. As we head into the holiday selling season with a stronger
product lineup and cleaner channel inventories compared to a year ago,
we are confident that Deckers is well positioned to achieve our near-
and medium-term financial targets and deliver increased shareholder
value."

"In light of our strong results and our confidence in the back half of
the fiscal year, we are increasing our outlook for the year. In
addition, I am pleased to announce that the board of directors has
authorized a new $335 million share repurchase program. Combined with
the $65 million remaining under our current authorization, we now have
the ability to repurchase a total of $400 million worth of shares, or
approximately 20% of our market capitalization. We intend to
aggressively repurchase our shares to reward our long-term shareholders
with accelerated EPS growth."

Second Quarter Fiscal 2018 Financial Review

• Net sales declined 0.7% to $482.5 million compared to $485.9
  million for the same period last year. On a constant currency basis,
  net sales decreased 0.3%.
• Gross margin was 46.7% compared to 44.5% for the same period
  last year.
• SG&A expenses were $157.8 million compared to $162.4
  million for the same period last year. Non-GAAP SG&A expenses were
  $157.3 million.
• Operating income was $67.4 million compared to $54.0 million
  for the same period last year. Non-GAAP operating income was $67.8
  million.
• Diluted earnings per share was $1.54 compared to $1.21 for the
  same period last year. Non-GAAP diluted earnings per share was $1.54.

Brand Summary

• UGG® brand net sales for the second quarter declined 2.9% to $400.4
  million compared to $412.2 million for the same period last year.
• HOKA ONE ONE® brand net sales for the second quarter increased 34.4%
  to $40.6 million compared to $30.2 million for the same period last
  year.
• Teva® brand net sales for the second quarter increased 24.9% to $21.4
  million compared to $17.1 million for the same period last year.
• Sanuk® brand net sales for the second quarter decreased 19.3% to $15.2
  million compared to $18.9 million for the same period last year.

Channel Summary (included in the brand sales numbers above)

• Wholesale net sales for the second quarter declined 2.2% to $391.2
  million compared to $399.9 million for the same period last year.
• DTC net sales for the second quarter increased 6.2% to $91.3 million
  compared to $86.0 million for the same period last year. DTC
  comparable sales for the second quarter increased 3.7% over the same
  period last year.

Geographic Summary (included in the brand and channel sales numbers
above)

• Domestic net sales for the second quarter decreased 3.1% to $302.7
  million compared to $312.2 million for the same period last year.
• International net sales for the second quarter increased 3.5% to
  $179.8 million compared to $173.7 million for the same period last
  year.

Balance Sheet (September 30, 2017 as compared to September 30, 2016)

• Cash and cash equivalents were $230.6 million compared to $110.0
  million.
• Deckers had $165.3 million in outstanding borrowings compared to
  $310.4 million.
• Inventories decreased 3.9% to $555.6 million from $578.0 million.

Full Year Fiscal 2018 Outlook for the Twelve Month Period Ending
March 31, 2018

Deckers now expects fiscal year 2018 results to be:

• Net sales are expected to be in the range of up approximately 1% to up
  2% versus last year.
• Gross margin is expected to be approximately 47.5%.
• SG&A expenses as a percentage of sales are projected to be
  approximately 37%.
• Non-GAAP diluted earnings per share are expected to be in the range of
  $4.15 to $4.30. This excludes any charges that may occur from
  additional store closures, restructuring and other charges.
• The earnings per share guidance does not assume any future share
  repurchase.

Third Quarter Fiscal 2018 Outlook for the Three Month Period Ending
December 31, 2017

• The Company expects third quarter fiscal 2018 net sales to be in the
  range of $735.0 million to $745.0 million.
• Non-GAAP diluted earnings per share are expected to be in the range of
  $3.65 to $3.75. This excludes any charges that may occur from
  additional store closures, restructuring and other charges.
• The earnings per share guidance does not assume any future share
  repurchase.

Non-GAAP Financial Measures

We present certain Non-GAAP financial measures in this press release,
including constant currency, Non-GAAP SG&A expenses, Non-GAAP operating
income and Non-GAAP diluted earnings per share, to provide information
that may assist investors in understanding our financial results and
assessing our prospects for future performance. We believe these
Non-GAAP financial measures are important indicators of our operating
performance because they exclude items that are unrelated to, and may
not be indicative of, our core operating results, such as restructuring
charges relating to retail store closures and office consolidations, and
other charges relating to inventory write-downs, severance and asset
impairments. In particular, we believe that the exclusion of certain
costs and charges allows for a more meaningful comparison of our results
from period to period. These Non-GAAP measures, as we calculate them,
may not necessarily be comparable to similarly titled measures of other
companies and may not be appropriate measures for comparing the
performance of other companies relative to Deckers. For example, in
order to calculate our constant currency information, we calculate the
current period financial information using the foreign currency exchange
rates that were in effect during the previous comparable period,
excluding the effects of foreign currency exchange rate hedges and
re-measurements in the condensed consolidated balance sheets. These
Non-GAAP financial results are not intended to represent, and should not
be considered to be more meaningful measures than, or alternatives to,
measures of operating performance as determined in accordance with GAAP.
To the extent we utilize such Non-GAAP financial measures in the future,
we expect to calculate them using a consistent method from period to
period. A reconciliation of each of the financial measures to the most
directly comparable GAAP measures has been provided under the heading
"Reconciliation of GAAP Financial Measures to Non-GAAP Financial
Measures" in the financial statement tables included below.

Conference Call Information

The Company's conference call to review the results for the second
quarter 2018 will be broadcast live today, Thursday, October 26, 2017 at
4:30 pm Eastern Time and hosted at www.deckers.com.
You can access the broadcast by clicking on the "Investor Information"
tab and then clicking on the microphone icon at the top of the page.

About Deckers Brands

Deckers Brands is a global leader in designing, marketing and
distributing innovative footwear, apparel and accessories developed for
both everyday casual lifestyle use and high performance activities. The
Company's portfolio of brands includes UGG®, Koolaburra®, HOKA ONE ONE®,
Teva® and Sanuk®. Deckers Brands products are sold in more than 50
countries and territories through select department and specialty
stores, Company-owned and operated retail stores, and select online
stores, including Company-owned websites. Deckers Brands has a 40-year
history of building niche footwear brands into lifestyle market leaders
attracting millions of loyal consumers globally. For more information,
please visit www.deckers.com.

Forward Looking Statements

This press release contains "forward-looking statements" within the
meaning of the federal securities laws, which statements are subject to
considerable risks and uncertainties. These forward-looking statements
are intended to qualify for the safe harbor from liability established
by the Private Securities Litigation Reform Act of 1995. Forward-looking
statements include all statements other than statements of historical
fact contained in this press release, including statements regarding our
anticipated financial performance, including our projected net sales,
margins, expenses and earnings per share, as well as statements
regarding our cost savings initiatives, product and brand strategies,
and marketing and distribution plans. We have attempted to identify
forward-looking statements by using words such as "anticipate,"
"believe," "could," "estimate," "expect," "intend," "may," "plan,"
"predict," "project," "should," "will," or "would," and similar
expressions or the negative of these expressions.

Forward-looking statements represent our management's current
expectations and predictions about trends affecting our business and
industry and are based on information available as of the time such
statements are made. Although we do not make forward-looking statements
unless we believe we have a reasonable basis for doing so, we cannot
guarantee their accuracy or completeness. Forward-looking statements
involve numerous known and unknown risks, uncertainties and other
factors that may cause our actual results, performance or achievements
to be materially different from any future results, performance or
achievements predicted, assumed or implied by the forward-looking
statements. Some of the risks and uncertainties that may cause our
actual results to materially differ from those expressed or implied by
these forward-looking statements are described in the section entitled
"Risk Factors" in our Annual Report on Form 10-K for the fiscal year
ended March 31, 2017, as well as in our other filings with the
Securities and Exchange Commission.

Except as required by applicable law or the listing rules of the New
York Stock Exchange, we expressly disclaim any intent or obligation to
update any forward-looking statements, or to update the reasons actual
results could differ materially from those expressed or implied by these
forward-looking statements, whether to conform such statements to actual
results or changes in our expectations, or as a result of the
availability of new information.

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