UNIVERSITY OF OREGON
INVESTMENT GROUP
1/28/2010
Consumer Discretionary
Deckers Outdoor Corp. (DECK)
RECOMMENDATION: BUY
Stock Data
Price (52 weeks)
Symbol/Exchange
Beta
Shares Outstanding
Average daily volume
Current market cap
Current Price
Dividend
Dividend Yield
Valuation (per share)
DCF Analysis
Comparables Analysis
Target Price
Current Price
$31.11 - $87.88
DECK / NASDAQ
1.59
38,544,429
2.8B
$74.13
N/A
N/A
$85.76
$88.94
$87.35
$72.90
Undervalued 18%
Summary Financials
Revenue
Net Income
Operating Cash Flow
TTM (Thousands)
$918,854
$136,746
$158,000
BUSINESS OVERVIEW
Deckers Outdoor is a footwear and apparel company based near Goleta, California which is near Santa Barbra.
Deckers distributes a number of footwear brands such as UGG Australia, Teva, Simple, TSUBO, AHNU, and
Mozo. Deckers is mainly a wholesale distributor but they also operate an eCommerce segment and several retail
stores in both Domestic and International markets.
Covering Analyst: Owen Hyde
Email: Owenh@uoregon.edu
The University of Oregon Investment Group (UOIG) is a student run organization whose purpose is strictly educational.
Member students are not certified or licensed to give investment advice or analyze securities, nor do they purport to be.
Members of UOIG may have clerked, interned or held various employment positions with firms held in UOIG’s portfolio. In
addition, members of UOIG may attempt to obtain employment positions with firms held in UOIG’s portfolio.
Deckers Outdoor Corporation
university of oregon investment group
http://uoig.uoregon.edu
The UGG Australia brand is the Deckers Outdoor’s largest segment. UGG Australia sells sheepskin boots and
other sheepskin products that are considered to be the highest quality available. The company believes that UGG
is a “lifestyle brand” that will continue to grow rapidly as the company expands both domestically and
internationally. The brand accounted for approximately 86% of wholesale, 88.5% of eCommerce and 98.7% of
retail store sales in 2009. Deckers Outdoor sold approximately 15.7 million pairs of UGGS in 2009 and analysts
expect this number to grow substantially. This business is very seasonal, with the majority of sales occurring in
the third and fourth quarters of every year. Major department store retailers of the UGG brand include Nordstrom,
Victoria Secret and Macy’s.
Teva is Deckers Outdoor’s second largest brand. Teva sells hiking and outdoor shoes, mainly sport sandals that
are designed for active outdoor lifestyles. Besides open and closed toe sport sandals, Teva also manufactures high
and low top hiking boots. The sport sandals were originally designed for use on rafting or river trips, but can also
be used for light hiking. This brand accounted for 11% of wholesale, 7% of eCommerce and .5% of retail store
sales in 2009. Of late, the brand has been doing very well. In the most recent quarter Deckers reported that Teva’s
revenues grew 51.7% year over year. Much of this growth is due to the international segment, specifically in Asia
where management believes the brand is gaining momentum. Sales of Teva are also seasonal with the majority of
revenues occurring in the 1st and 2nd quarters.
Simple brand is Deckers Outdoors next largest segment. They sell environmentally friendly footwear made from
materials such as recycled carpet padding, hemp, recycled car tired, recycled wool and certified organic cotton.
The brand strives to make their products in a fashion that could be considered socially responsible and
environmentally sustainable. Simple brand has set ethical guidelines that govern their supply chain. These rules
require that laborers be at least 16 years old and receive compensation at a premium to regularly hourly wages
when working overtime. Simple brands made up 1.7% of wholesale, 4% of eCommerce and less than 1% of retail
store sales in 2009.
When combined the bands including TSUBO, AHNU, and Mozo accounted for 1.3% of wholesale, less than 1%
of eCommerce and less than 1% of retail store sales in 2009. ANHU is an outdoor footwear brand that mainly
sells hiking boots and women’s clogs. Mozo sells shoes that are designed for working people that tend to be on
their feet all day and need a black shoe with excellent arch support. TSUBU is primarily casual footwear styled to
be a more European look. These brands are a very small part of the company but have been growing at a double
digit rate for a number of quarters.
BUSINESS AND GROWTH STRATEGIES
UGG Australia
Domestic
 In the third quarter revenues from the domestic UGG wholesale segment were up 10% compared to last
year’s 3rd quarter
 Domestic UGG sales will be driven by new product styles as well as the new men’s line.
 Two very successful new products in the women’s line are the baily button and baily button triplet boots.
 New men’s line will include boots, casual sneakers (non-athletic) and accessories like hats and gloves.
 Joint ventures with high end designers such as Jimmy Choo
2
Deckers Outdoor Corporation
university of oregon investment group
http://uoig.uoregon.edu
International
 Decker’s management sees significant growth opportunities in Asian markets such as Japan, Hong Kong
and China. These International markets are clearly the focus going in to 2011 and beyond.
 International sales have exhibited extremely strong growth recently. In their most recent 3rd quarter filing
Deckers reported a 44% increase in sales year over year.
 Despite already rapid growth, management feels they haven’t even started to penetrate many large Asian
markets.
E-Commerce
 Opening up eCommerce in the Chinese market
 Domestic E-Commerce sales of Uggs were up 16.5% in the third quarter compared to a 10% increase for
the domestic Uggs wholesale segment.
Teva




Additional growth is expected from Teva, particularly in the international segment.
Management believes that Teva’s revenue will double by 2014
Teva’s growth in Asia should help the company diversify their revenue streams
Teva’s sales make the company less seasonal
Retail Stores
 Nine new retail stores will be up and running by the end of 2011.
 Opening retail stores will help penetrate new Asian markets
 China stores are a joint venture with Stella International Holdings Limited
 Higher gross margins
 Opening retail stores in major Asian markets such as Shanghai and Hong Kong
Other Bands
 These four brands are projected to grow at a solid rate as marketing increases
 Deckers actively searches for new brands to acquire and build.
Stock Buyback Program
 Management has 20 million left in the stock buyback program and plans to contribute more at a later date.
MANAGEMENT AND EMPLOYEE RELATIONS
 Anegl Marteniez is the Chairman, President and
CEO at Deckers. He has been with the company since
2005, before that he was the Chief Marketing Officer &
Executive Vice President at Reebok International. Prior
to that, Martinez worked as the President & Chief
Executive Officer at Rockport.
 Marteniez is currently on the board of directors at
Tupperware Brands. He received 2.5 million in
compensation in 2009 from Deckers Outdoor.
3
Deckers Outdoor Corporation
university of oregon investment group
http://uoig.uoregon.edu




Constance Rishwain has been the President of UGG Australia since 2002 but has been with Deckers
Outdoor since 1995. She received 1.25 million in compensation in 2009.
Zohar Ziv is the Chief Operating & Accounting Officer at Deckers. He has been with the company since
2006, prior to that he was the Chief Financial Officers at several companies including EMAK Worldwide,
Stravina and Joico Laboratories.
Thomas George is the Chief Financial & Accounting Officer. He has been with Deckers since 2009, prior
to which he worked as the Chief Financial Officer at Oakley.
Colin Clark is the Senior Vice President of the International Division. He began working at Deckers in
2005, prior to which he worked as the Vice President & General Manager of the International Division at
Rockport.
Directors


Maureen Conners is the President & Founder of Conners Consulting. She received her MBA from the
University of Pennsylvania and has been on the Board of Directors at Deckers since 2006.
Ruth Owades is the President at Owades Enterprises LLC, Founder of Calyx & Corolla, and the Founder
of Gardener’s Eden. She is also on the Board of Directors at Gerald Stevens and has been on the Deckers
Board since 2008.
PORTFOLIOS
TALL FIRS- SLIGHTLY UNDERWEIGHT CONSUMER GOODS
SVIGALS’- UNKNOWN
DADCO- UNDERWEIGHT CONSUMER GOODS
RECENT NEWS

GOLETA, Calif., Jan 10, 2011 (BUSINESS WIRE)
o -“Customs Seizures and Raids Net More Than 400,000 Pairs of Fake Boots and Shoes”
Chinese Public Security Bureau authorities seized 244,648 pairs of counterfeit UGG Australia
product, surpassing the total number of pairs seized in the previous 118 raids in 2010. Significant
growth in all areas of enforcement, from Customs seizures to website takedowns, illustrates both
the pernicious nature of organized counterfeit operations, and the company's commitment to
fighting counterfeiting globally.

GOLETA, Calif., Dec 07, 2010 (BUSINESS WIRE)
o Deckers Outdoor Corporation filed a trademark infringement suit today in United States
District Court in the Central District of California against Emu Australia, Inc. and Emu
(Australia) Pty Ltd. Deckers is seeking a Court order to stop Emu from using its trademarks.
o "The success of UGG Australia has created an entire industry of companies that market their
wares by deliberately confusing consumers. Emu's trademark infringement is intentionally
misleading consumers into believing they are buying a genuine UGG Australia product when in
fact, they are not." -Angel Martinez, Deckers Chairman and CEO

NEW YORK, Nov 30, 2010 (BUSINESS WIRE)
o UGG Australia announced today that it is partnering with NFL superstar Tom Brady of the
New England Patriots to launch its first men's marketing initiative. The multi-year
4
Deckers Outdoor Corporation
university of oregon investment group
http://uoig.uoregon.edu
collaboration between the three-time Super Bowl champion and the brand will include Brady's
casual footwear as well as select outerwear and accessories. UGG Australia will feature Brady in
its global multimedia marketing initiative beginning with the fall 2011 collection.

Oct 28, 2010 (Trading Markets)
o Deckers Outdoor raised their 2010 earnings to approximately $3.65 per share. The
company's previous guidance was earnings of approximately $3.46 per share and the current
consensus earnings estimate is $3.52 per share for the year ending December 31, 2010.
INDUSTRY
The footwear industry is a mature industry that is not controlled by any one firm there are a few large firms that
have significant power because of their brand names. Nike and Adidas are the two largest footwear companies
and the competition between them is very strong. Adidas acquired another large competitor, Reebok International,
several years ago and has since been the larger of the two companies. Neither company has enough pricing power
to control the market despite their dominate brand names and economies of scale.
The industry has traditionally cut costs by outsourcing the manufacturing of their products to areas where labor
costs are very low. Manufactures choose to have their products made in Eastern Asia in many cases, but in recent
years there have been concerns that labor costs there may rise. Pricing pressures from increasing labor costs
could force the companies in this industry to change how they operate their respective supply chains if t margins
come under pressure.
There are several niche markets within the footwear industry that are dominated by a particular brand. These
niche markets and subcategories of footwear are not separated from the industry as a whole in any research I
found. This makes it difficult to project how much market share the leaders in these segments have, however I
suspect that some brands may have around 70% market share in some specialized types of footwear. Examples of
brands that control their respective niche markets within the footwear industry are Crocs and UGG Australia.
The footwear industry is not growing very fast, and most companies serving this market are looking for ways to
take market share from competing firms. Important competitive factors within the industry include controlling the
supply chain, staying nimble with product offerings, and providing a wide array of products that meet ever
changing consumer demands. The industry as a whole may not be growing rapidly but there are specific niche
markets that are a clear exception to this trend.
Leading indicators for this industry are consumer sentiment, disposable income, and job growth. These indicators
are all climbing off of some of their worst levels ever, leading me to believe that this industry should be well on
the way to rebounding. The charts below show that the leading indicators for this industry are picking up, despite
taking longer than usual to do so.
5
Deckers Outdoor Corporation
university of oregon investment group
http://uoig.uoregon.edu
I believe that as the job market slowly improves in the US we should see rising consumer sentiment and levels of
disposable income. This would create higher demand for footwear, particularly higher end luxury brands that sell
to affluent consumers. Other factors such as emerging market disposable income and emerging market consumer
sentiment would be useful indicators as well because of the increasing demand from these countries.
6
Deckers Outdoor Corporation
university of oregon investment group
http://uoig.uoregon.edu
This chart shows that consumer sentiment is rebounding after what was a steep decline from 2007 to 2009. If this
trend holds then consumer spending should return to more normalized levels, which would be very positive for
the footwear industry as a whole. When consumer sentiment picks up, there is a rapid increase in discretionary
spending which leads to higher revenues in this industry.
S.W.O.T. ANALYSIS
Strengths

Strong demand from the Asian economies

UGG dominates their niche market

High Margins

No Debt

Brand awareness
Weaknesses

Rising Commodity Costs

Fashion Risk

UGG Australia makes up a large % of revenue
Opportunities

UGG Men’s line

Retail store expansion
7
Deckers Outdoor Corporation
university of oregon investment group
http://uoig.uoregon.edu

E-Commerce

US job growth
Threats

Counterfeiting and imitation brands (EMU, Bearpaw)
CATALYSTS
Upside

Endorsement deal signed with Tom Brady

UGGs men’s line begins in 2011

Less seasonality due to Teva’s resurgence

Opening new retail stores
Downside

UGGS become unfashionable

Increasing commodity costs could cut into margins

The men’s line is unsuccessful

Rising labor costs in China
COMPARABLES ANALYSIS

When picking comparable companies for Deckers Outdoor I used a number of criteria to verify they faced
similar market risks. The most useful criteria to look at when comparing Deckers Outdoor to other
apparel companies is a similar projected growth rate for both net income and revenue for 2011.
Secondarily, I looked for similar beta, capital structure and margin. Having product offerings that are in
direct competition with Deckers brands was also a very important factor. Fashion trends also had to be
taken into consideration when assessing companies because valuations in this industry will often reflect
what is currently popular.

I choose to use my own estimates for the Deckers Outdoor 2011 fiscal year when making these
comparisons. I choose to use next year’s estimates because Deckers is growing very rapidly and it does
not make sense to value it based on trailing twelve month figures. Additionally, many analysts are yet to
update their projections for 2011. Based on recent news about a new men’s product line enforced by Tom
Brady, I believe the estimates are too far too low and will be raised. The UGG brand has primarily been a
women’s line and this announcement will alter the fundamentals of the company to a great degree.

I used EV/Revenue, EV/EBITDA and EV/Net Income as comparable metrics to measure how effectively
the company is managing its business for both the top and bottom line. Three of these metrics are
profitability comparisons, which I feel is the most important metric to look at besides the growth rate of
.
8
Deckers Outdoor Corporation
university of oregon investment group
http://uoig.uoregon.edu
net income. The EV/Revenue metric measures how the market values a company’s sales compared to its
size and structure. EV/EBITDA is a very useful profitability metric that measures earnings before
depreciation in relation to the size of the company. EV/Net Income is measures how profitable the
company is in relation to the enterprise value of the firm. The comparable companies I choose operate
business segments that are subject to similar cyclical risks and therefore should be trading at similar
multiples on an enterprise value basis.
Steve Madden (SHOO) 30%
“Steven Madden, Ltd., together with its subsidiaries, designs, sources, markets, and sells fashion-forward
footwear for women, men, and children. The company offers its footwear products under Steve Madden, Steve
Madden Kids, Madden Girl, Stevies, Steven, Madden Girl, Steve Madden Men’s, Steve Madden Fix, Candies,
Elizabeth and James, Olsenboye, and l.e.i. brand names to major department stores, mid-tier department stores,
better specialty stores, value price retailers, and independently owned boutiques in the United States. It also offers
its products through company owned retail stores and an e-commerce Website. As of December 31, 2009, Steven
Madden operated 89 retail stores. In Addition, the company designs, sources, markets, and sells name brand and
private label fashion handbags and accessories. Further, it licenses its Steve Madden and Steven by Steve Madden
trademarks for use in connection with the manufacturing, marketing, and sale of cold weather accessories,
sunglasses, eyewear, outerwear, bedding, hosiery, and women’s fashion apparel and jewelry. Steven Madden also
distributes its products in Asia, Canada, Europe, Central and South America, Australia, and Africa through special
distribution arrangements. The company was founded in 1990 and is headquartered in Long Island City, New
York.” –Yahoo! Finance
Steve Madden is a direct competitor in the women’s boot business. In addition, Steve Madden has similar margins
and a capital structure that closely resembles Decker’s. Steven Madden operates a wholesale business as well as
distributing their products via their own retail stores and eCommerce segment. Their products are sold at many of
the same department stores and compete for the same shelf space. The company sells a lot of cold weather
products, which makes its revenues somewhat seasonal. This is similar to the seasonality that Deckers experiences
because of the UGG brand’s higher winter sales. Steve Madden has an international segment that has been doing
very well and is expanding into Asia, much like Deckers. I believe Steve Madden is the best comparable direct
competitor to Deckers Outdoor, however the slightly lower growth rates result in lower multiples that I believe
are not reflective of Deckers. I weighted Steve Madden at 30% rather than 35% in my analysis because of the
lower growth.
Timberland (TBL) 20%
“The Timberland Company engages in the design, development, marketing, and distribution of footwear, apparel,
and accessories products for men, women, and children under the Timberland, Timberland PRO, Timberland
Boot Company, SmartWool, howies, and IPATH brands in North America, Europe, and Asia. The company
offers basic, premium, and chukka boots, including roll-tops; Field Boot, Euro Hiker, and Euro Sprint Hiker sport
boots; and casual footwear series, such as authentic rugged handsewn oxfords, boat shoes, and casual bucks. It
also provides outdoor performance footwear for outdoor recreationalists and enthusiasts for outdoor adventures.
The company’s apparel products line includes casual, outdoor adventure and outdoor leisure, and sports apparel
for men, women, and kids. In addition, it offers a range of accessories products, including packs and travel gear,
9
Deckers Outdoor Corporation
university of oregon investment group
http://uoig.uoregon.edu
women’s handbags, belts, wallets, socks, headwear, gloves, watches, sunglasses, eyewear, ophthalmic frames, and
various other small leather goods. The company markets its products through independent retailers, department
stores, athletic stores, national retailers, and Timberland specialty stores, as well as through a mix of independent
distributors, franchisees, and licensees. It also sells its products through online at timberland.com,
smartwool.com, and ipath.com in the United States, as well as at timberlandonline.co.uk and howies.co.uk in the
United Kingdom. As of December 31, 2009, The Timberland Company operated 6 specialty stores, 59 factory
outlet stores, and 4 footwear plus stores in the United States; 44 company-owned specialty stores and shops, and
16 factory outlet stores in Europe; and 67 company-owned specialty stores and shops, and 19 factory outlet stores
in Asia. The company was founded in 1933 and is headquartered in Stratham, New Hampshire.”-Yahoo! Finance
Timberland is a solid comparable company because of their exposure to outdoor footwear and similar growth
rates. Deckers owns two brands that operate in the outdoor footwear industry, Teva and Ahnu. These brands sell a
number of hiking boots and other products that are very similar to that of Timberland. This makes them direct
competitors in many markets in addition to having similar revenues and gross profits. Timberland operates
wholesale, eCommerce and retail store segments in the footwear industry which makes them a very comparable
company to Deckers Outdoor. Timberland does not sell as many women’s boots which makes the comparison
more clouded. I weighted Timberland 20% in my comparable analysis because of their exposure to outdoor
footwear, similar capital structure and store growth.
Crocs (CROX) 25%
“Crocs, Inc. and its subsidiaries engage in the design, development, manufacture, marketing, and distribution of
footwear for men, women, and children. The company primarily offers casual and athletic shoes, and shoe
charms. It also designs and sells a range of footwear and accessories that utilize its proprietary closed cell-resin,
called Croslite. In addition, the company offers a line of apparel for boys and girls; men featuring Croslite
material; and accessories, including snap-on charms and messenger bags. Further, it provides leather and ethylene
vinyl acetate based sandals principally for the beach, adventure, and action sports markets. The company sells its
products through domestic and international retailers and distributors, as well as directly to end-user consumers
through its Web stores, company-operated retail stores, outlets, and kiosks primarily under the Crocs, Jibbitz,
Ocean Minded, and YOU by Crocs brand names. As of December 31, 2009, it operated 170 domestic and
international retail kiosks located in malls and other high foot traffic areas; 84 domestic and international retail
stores; 63 domestic and international outlet stores; and 23 Web stores. Crocs, Inc. operates in the Americas,
Europe, and Asia. The company was formerly known as Western Brands, LLC and changed its name to Crocs,
Inc. in January 2005. Crocs, Inc. was founded in 1999 and is based in Niwot, Colorado.”-Yahoo! Finance
Crocs is a footwear company that is comparable to Deckers Outdoor because of their international growth, unisex
niche brand, and similar fashion risks. Crocs is expanding internationally, using retail stores in the same way that
Decker’s management plans to in coming years. The company is also similar because they sell a non-traditional
style of shoe that has an emphasis on comfort. They have high gross margins and the majority of their sales come
from a core product or brand. Additionally, most of their sales are in the women’s lines, which is comparable to
Deckers. There are a few differences that stand out, including the fact that Crocs has some debt on their balance
sheet and are currently less trendy then UGG worldwide. I weighted Crocs 25% on my comparable analysis due
to these factors.
10
Deckers Outdoor Corporation
university of oregon investment group
http://uoig.uoregon.edu
Lululemon Athletica (LULU) 25%
“Lululemon Athletica Inc. engages in the design, manufacture, and distribution of athletic apparel and accessories
for women, men, and female youth in Canada, the United States, and Australia. The company’s apparel products
include fitness pants, shorts, tops, and jackets for healthy lifestyle activities, such as yoga, running, and general
fitness. Its fitness-related accessories comprise an array of items, such as bags, socks, underwear, yoga mats,
instructional yoga DVDs, and water bottles. The company sells its products through its retail stores; independent
franchises; and a network of wholesale accounts that includes yoga studios, health clubs, and fitness centers, as
well as directly through e-commerce. As of January 31, 2010, it operated 124 company-owned and franchise
stores under the Lululemon athletica and ivivva athletica brand names. Lululemon Athletica Inc. was founded in
1998 and is based in Vancouver, Canada.”-Yahoo! Finance
When doing my search for comparable companies, I wasn’t just searching for companies that had similar growth
rates, beta and capital structure. I was looking for apparel companies that dominated a niche market in the way
UGG brand does. Lululemon is a prime example, dominating the niche market for high end yoga pants and
related apparel. Lululemon is benefiting from current fashion trends, has comparable margins combined with a
similar capital structure. Lululemon does have a higher growth rate, however they sell primarily women’s
products in the same way UGG’s does. They face many similar risks to their product sales and their eCommerce
and retail store segments are very comparable. Management at Deckers believes they are going to pursue a very
similar strategy as Lululemon going forward, so I believe they are extremely comparable despite the valuation
gap.
I also believe that the gap between analyst’s growth estimates for Lululemon and Deckers Outdoor will be
reduced substantially after Decker’s management team gives more detail on the men’s line during the 4th quarter
conference call on February 23, 2011. I believe Lululemon is the best comparison on a growth basis and because
of this I reiterate that similar, although lower, multiples could be applied to Deckers Outdoor. I weighted LULU
25% on my comparable analysis because of the domination of their niche market, the current popularity of their
products among the same demographic and the similar growth prospects for both companies.
DISCOUNTED CASH FLOW ANALYSIS
The line items in the discounted cash flow analysis (DCF) were projected as a percentage of revenue in order to
arrive at the firm’s annual free cash flow. The DCF analysis received a weighting of 50% and yielded an implied
price of $85.76.
Revenue
UGG Australia Wholesale

UGG brand sales are projected to increase rapidly over the next several years. This is primarily due to
domestic and overseas demand for their women’s line of sheepskin boots, which have been increasing
popularity with the younger demographics. Market research has shown that 77% of UGG brand female
consumers are ages 18 to 54 years old. Out of those consumers, 47% of are ages 18 to 34 and 30% are 35
to 54. I expect this trend to continue and accelerate as the younger generation is able to increase their
discretionary spending as the job market strengthens domestically. Turning to the international segment,
UGG has yet to meaningfully penetrate Asian markets, particularly China where demand is very high. I
11
Deckers Outdoor Corporation
university of oregon investment group
http://uoig.uoregon.edu
expect that international demand will be the primary driver of top line growth for the UGG wholesale
segment for many years to come. I have projected the segment to have a 15.75% CAGR going into the
terminal year of 2020.
Teva Wholesale

Teva brand revenues are projected to increase at a higher rate than in years past because of a resurgence
in demand from the Asian markets. Management believes that the brand is rapidly gaining traction in
these markets because it’s already a well-respected and revered brand. Teva’s growth potential in the
international segment was evidenced when they reported 51.7% year over year growth in the 3 rd quarter.
Management now believes that Teva can easily double revenues by 2014 and they have plans to
aggressively market the line in emerging Asian markets. The Teva segment is projected to have a 15.5%
CAGR going into 2020.
Other Brand Wholesale

The Simple, TSUBO, AHNU, and Mozo brands are projected to gain traction in coming years as
management increases marketing spending to create better brand awareness. This increased awareness
and shelf space in retail outlets should result in solid growth rates going into the terminal year. Brands
like Mozo have also had great success overseas in places like Japan. This top line growth is expected to
continue at a moderate pace as more consumers are exposed to the products these relatively small brands
offer. The Simple brand has been successful at reaching a niche market of socially conscious and
environmentally sensitive consumers, a market segment that is growing at a healthy pace. These four
brands combined are projected to have a 16.1% CAGR for the years 2010 through 2020. This growth
includes the acquisition of an additional small brand for around 4 million in 2015.
eCommerce

This segment should expand very rapidly in the next 10 years as the trend of online shopping becomes
even more pronounced. The company has been spending an increasing amount of money to draw
consumers onto the websites of their various brands. They recently have begun to market on Facebook
and other social networking sites which should begin to show up within the next few years. This segment
should accelerate in later years as fuel prices increase and online shopping becomes increasingly
convenient and affordable. The eCommerce segment is expected to grow the top line at a 16.25% CAGR
into the terminal year.
Retail Stores

The UGG brand retail store segment is currently the main focus for management’s plans for expansion.
Because of the higher margins in the retail store segment management feels it can be a very important part
of the company’s future. Deckers Outdoor currently only operates 24 stores worldwide and plans to
expand this segment very significantly. The company opened eight new stores since the 3 rd quarter of
2009 and plans to accelerate this growth in years to come. This is also reflected in the projections for cap
ex spending, which trend along with store openings. Many of these retail stores are in international
markets, including two new stores in Shanghai and one in Hong Kong. This is just the beginning of what I
anticipate will be a very pronounced push into the international retail market. This segment is projected to
have a 15.3% CAGR into 2020.
Beta

I ran a five year monthly regression of DECK against the S&P 500 and derived a beta of 1.59. This beta is
similar to that of the comparable companies listed and also accurately reflects the risks associated with the
company. Considering the high growth rate and solid balance sheet of the company I believe this beta is
an accurate representation of the risk when compared to comparable companies.
12
Deckers Outdoor Corporation
university of oregon investment group
http://uoig.uoregon.edu
Cost of Goods Sold
 Cost of goods sold is projected to decrease as a percentage of revenue as compared to years past. This is
primarily due to offering higher margin products such as the Jimmy Choo UGG line which retail from
$495 to $795 and offer increased margin. The decrease in cost of goods sold as a percentage of revenue is
also due to the increased gross margins from the retail store segment. These higher margins should offset
the 5 to 10% rise in commodity costs that management sees impacting next year. I believe the impact will
be minimal because the company has pricing power with their brands.

Management has stated that SG&A costs will rise as the company opens more retail stores. I projected
these expenses to increase in accordance with the number of new store openings annually, which can be
seen in the revenue model. SG&A costs continue to rise until the number of new store openings
beginning to level off, at which time I reduced the rate of growth in SG&A expenses. There are some
additional SG&A costs in the earlier years that are related to the build out of the eCommerce business,
however these costs trail off and have minimal impact by 2013.
Research & Development

This has historically been a very small expense for Deckers, however I feel that this will not be the case
going forward. As the UGG brand expands the existing product offerings in the women’s line and begins
to develop a more complete men’s line of footwear, significant R&D expenses will be incurred. The
higher rate of R&D spending is projected to continue into the terminal year because I expect that the
men’s line will take significant time to develop. I projected all R&D expenses as a percentage of revenue.
Advertising & Marketing

With the addition of Tom Brady to the new UGG advertising campaign I assumed that marketing
expenses would rise in coming years. Not only will the endorsement probably cost the company on an
annual basis, but the company will probably be spending more on top of that to get extra exposure. I have
projected that marketing expenses climb to around 3.5% to 4% of total revenues. This is in line with what
other lifestyle brands such as Ralph Lauren traditionally spend to build consumer awareness.
Management stated in the 3rd quarter conference call that they will increase marketing expenses and that
they will stay in this 3.5% to 4% range going forward.
Working Capital

In my working capital model I decided to back out the cash balance from the current assets. I did this
because the company is able to cover all their expenses from free cash flow. The cash was added back
into the firm value in the DCG assumptions.
RECOMMENDATION
I am recommending Deckers Outdoor as a BUY for all portfolios because of its excellent growth prospects both
domestically and internationally. My target price implies that it is current undervalued by about 18%. I believe
that the new UGG men’s line will be a success, adding incremental revenue and net income growth into
perpetuity. The success of the men’s line will increase market share in the footwear industry and solidify the
company’s status as a lifestyle brand. The resurgence of the Teva brand will make the business less seasonal and
expand international growth for years to come. Margins are improved by opening up more retail stores in key
Asian markets such as China and Hong Kong. This should help increase brand exposure and drive international
sales of UGG, which have just begun to scratch the surface from the standpoint of market penetration. The
eCommerce segment has plenty of room to grow both domestically and should benefit from increasing levels
13
Deckers Outdoor Corporation
university of oregon investment group
http://uoig.uoregon.edu
online shopping. Furthermore, I believe that the current market capitalization of Deckers Outdoor is too low
considering the market opportunity. I am recommending DECK as a BUY for all portfolios.
Analysis
Comparable Target
DCF Target
Weighted Target Price
Current Price
Undervalued (Over)
Weighting
Price
50% $
88.94
50% $
85.76
$
$
87.35
74.13
17.83%
14
Deckers Outdoor Corporation
university of oregon investment group
http://uoig.uoregon.edu
APPENDIX 1 – COMPARABLES ANALYSIS
The University of Oregon Investment Group
($ in thousands, except per share data)
Stock Characteristics
Current Price
50 Day Moving Avg.
150 Day Moving Avg.
200 Day Moving Avg.
Beta
Size
ST Debt (MRQ)
LT Debt (MRQ)
Cash and Cash Equiv. (MRQ)
Minority Interest
Market Value Preferred Stock
Diluted Share Count
Market Cap
Enterprise Value
Profitability Margins
Gross Margin
EBIT Margin
EBITDA Margin
Net Margin
Credit Metrics
Interest Expense (MRQ)
Debt/Equity (MRQ)
Debt/EBITDA (LTM)
EBITDA/Interest Expense (LTM)
Operating Results
Revenue (2011 EST)
Gross Profit (2011 EST)
EBIT (2011 EST)
EBITDA (2011 EST)
Net Income (2011 EST)
Operating Cash Flow (2011 EST)
Valuation
EV/Revenue
EV/Gross Profit
EV/EBITDA
EV/Net Income
PEG (TTM)
30.00%
SHOO
DECK
Max
$
67.08
Min
$
2.60
$
$
$
$
$
$
$
1,900 $
1,200 $
224,800 $
4,500 $
$
87248
4,818,356
$
4,598,056
$
1,432,000
695,100
219,900
246,300
133,900
155,900
Avg.
$
36.99
1.31
55.1%
25.0%
28.0%
15.2%
$
$
$
$
$
$
15.92
49,440
27742
1,057,802
1,008,362
1.85
$
$
$
$
$
$
$
43.3%
9.3%
11.2%
6.7%
$
$
$
$
$
$
694,500
301,000
112,200
147,300
84,700
84,500
Median
$
32.49
1.75
475 $
300 $
131,660 $
126,200
1,275 $
300
$
59763
62030
2,166,750
$ 1,395,421
2,037,140
$ 1,271,071
50.5%
16.5%
19.3%
10.9%
$
$
$
$
$
$
980,725
495,850
150,175
176,675
100,613
120,125
$
898,200
493,650
134,300
156,550
91,925
120,050
$
1.59
$
$
$
$
$
$
$
51.7%
15.9%
18.9%
10.9%
$
$
$
$
$
$
74.13
1.53
$
26.84
1,236,874
602,976
306,126
320,350
193,472
207,696
2.15
4.41
8.29
13.73
0.87
x
x
x
x
x
Metric
EV/Revenue
EV/Net Income
EV/EBITDA
Implied Price
$
77.71
$
97.20
$
91.16
Price Target
Current Price
Under (Over) Valued
$
43.3%
19.5%
21.2%
12.2%
$
$
$
$
$
$
694,500
301,000
135,400
147,300
84,700
84,500
1.45
3
6.85
11.91
1.00
x
x
x
x
x
25.00%
CROX
$
1.31
$
$
$
$
250,736 $
49,440 $
108,800
1 $
$
$
$
39228
27742
52230
2,907,972
$ 1,057,802
$ 1,401,853
2,657,237
$ 1,008,362
$ 1,293,053
48.8%
24.8%
25.9%
15.6%
$
$
$
$
$
$
38.13
20.00%
TBL
0.90
1.86
8.04
13.39
1.34
x
x
x
x
x
$
1.97
$
$
$
$
1,900
1,200
143,600
600
87,248
$ 1,388,988
$ 1,249,088
48.5%
9.3%
11.2%
6.7%
$ 1,432,000
$
695,100
$
133,200
$
160,900
$
96,600
$
120,600
15.92
25.00% Weighted Avg.
LULU
2.60
$
$
$
$
915,200
501,700
112,200
152,200
87,250
119,500
1.36
2.49
8.21
14.32
1.83
x
x
x
x
x
224,800
4,500
71830
$ 4,818,356
$ 4,598,056
54.8%
12.3%
16.6%
9.5%
$
$
$
$
$
$
67.08
55.1%
25.0%
28.0%
15.2%
$
$
$
$
$
$
881,200
485,600
219,900
246,300
133,900
155,900
5.22
9.47
18.67
34.34
1.71
x
x
x
x
x
2.26
4.37
10.38
18.41
1.45
x
x
x
x
x
Weight
30.00%
30.00%
40.00%
88.94
74.13
20.0%
15
Deckers Outdoor Corporation
university of oregon investment group
http://uoig.uoregon.edu
APPENDIX 2 – DISCOUNTED CASH FLOWS ANALYSIS
($ in thousands, except per share data)
Total Company Revenue
% Y/Y Growth
Cost of Goods Sold
% Revenue
Gross Profit
Gross Margin
Operating Expenses
SG&A
% Revenue
R&D
% Revenue
Advertising & Marketing
% Revenue
D&A
% Revenue
Total Operating Expenses
% Revenue
EBIT
% Revenue
Other Expense (Income)
Interest Expense
% Revenue
Pre-tax Income
% Revenue
Less Taxes (Benefit)
Tax Rate
Net Income
Net Margin
Add Back Depreciation and Amortization
% Revenue
Add Back Interest Expense*(1-Tax Rate)
% Revenue
Operating Cash Flow
% Revenue
Current Assets
% Revenue
Current Liabilities
% Revenue
Net Working Capital
% Revenue
Change in Net Working Capital
Capital Expenditures
% Revenue
Acquisitions
% Revenue
Unlevered Free Cash Flow
PV of Free Cash Flow
Discount %
2007
2008
$ 448,929 $ 689,445 $
47.64%
53.58%
$ 241,458 $ 384,127 $
53.79%
55.72%
$ 207,471 $ 305,318 $
46.21%
44.28%
$
$
$
$
$
$
$
$
$
$
$
$
$
$
81,967
18.26%
2,916
0.65%
17,035
3.79%
3,516
0.78%
343,376
76.49%
105,553
23.51%
(4,486)
0.00%
110,039
24.51%
43,602
39.6%
66,437
14.80%
3,516
0.78%
0.00%
65,467
14.58%
0.00%
$
$
$
$
0.00%
0.00%
6,385
1.42%
0.00%
63,568
$ 122,089
17.71%
$
5,619
0.82%
$ 24,866
3.61%
$
5,282
0.77%
$ 536,701
77.85%
$ 152,744
22.15%
$
(3,583)
$
0.00%
$ 156,327
22.67%
$ 46,631
29.8%
$ 109,696
15.91%
$
5,282
0.77%
$
0.00%
$ 111,395
16.16%
$ 410,046
59.47%
$ 95,209
13.81%
$ 314,837
45.67%
$ 314,837
$ 22,337
3.24%
$
0.00%
$ (222,196)
0.25
1.25
2.25
3.25
4.25
2009
2010 Q1-3A
2010 Q4E
2010A+E
2011 E
2012 E
2013 E
2014 E
813,177 $
570,865 $
425,000 $ 995,865 $ 1,236,874 $ 1,545,257 $ 1,923,374 $ 2,339,419 $
17.95%
22.47%
24.20%
24.93%
24.47%
21.63%
442,087 $
301,262 $
206,125 $ 507,387 $ 633,898 $ 787,308 $ 990,538 $ 1,201,291 $
54.37%
52.77%
48.50%
50.50%
51.25%
50.95%
51.50%
51.35%
371,090 $
269,603 $
218,875 $ 488,478 $ 602,976 $ 757,948 $ 932,837 $ 1,138,127 $
45.63%
47.23%
51.00%
49.05%
48.75%
49.05%
48.50%
48.65%
$ 152,005
18.69%
$
8,111
1.00%
$
28,727
3.53%
$
8,460
1.04%
$ 630,930
77.59%
$ 182,247
22.41%
$ (1,976)
$
0.00%
$ 184,223
22.65%
$ 66,304
36.0%
$ 117,919
14.50%
$
8,460
1.04%
$
0.00%
$ 124,403
15.30%
$ 206,903
25.44%
$ 100,870
12.40%
$ 106,033
13.04%
$ (208,804)
$ 13,971
1.72%
$
0.00%
$ 321,212
$
161,252 $
28.25%
90,313 $ 251,565 $
21.25%
25.26%
$
$
$
$
$
$
8,836 $
1.55%
161,252 $
108,351
18.98%
(775)
0.00%
109,126
$
$
$
40,104
36.8%
69,022
12.09%
8,836
1.55%
0.00%
77,083
13.50%
607,914
$
126,765 $
$
481,149 $
$
$
61,032 $
14,496 $
$
$
0.00%
2,330 $
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
-
$
5,164 $ 14,000
1.22%
1.20%
90,313 $ 758,952
76.21%
128,563 $ 236,914
30.25%
23.79%
$
$
0.00%
0.00%
128,563 $ 236,914
23.79%
47,311 $ 87,184
36.8%
36.8%
81,252 $ 149,729
19.12%
15.04%
5,164 $ 14,000
1.22%
1.41%
$
0.00%
0.00%
86,416 $ 163,729
20.33%
16.44%
379,777 $ 379,777
$
107,553 $ 107,553
10.80%
272,224 $ 272,224
27.34%
(147,776) $ 166,191
10,000 $ 25,000
2.51%
$
0.00%
0.00%
224,192 $ (27,461)
216,579
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
230,059
18.60%
18,553
1.50%
48,238
3.90%
14,224
1.15%
930,748
75.25%
306,126
24.75%
0.00%
306,126
24.75%
112,654
36.8%
193,472
15.64%
14,224
1.15%
0.00%
207,696
16.79%
531,856
43.00%
182,439
14.75%
349,417
28.25%
77,193
30,922
2.50%
0.00%
99,581
83,782
84.14%
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
275,828
17.85%
19,316
1.25%
60,265
3.90%
19,316
1.25%
1,142,717
73.95%
402,539
26.05%
0.00%
402,539
26.05%
146,927
36.5%
255,613
16.54%
19,316
1.25%
0.00%
274,928
17.79%
629,692
40.75%
231,016
14.95%
398,676
25.80%
49,259
34,768
2.25%
0.00%
190,901
139,884
73.28%
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
348,131
18.10%
21,157
1.10%
73,088
3.80%
19,234
1.00%
1,432,914
74.50%
490,460
25.50%
0.00%
490,460
25.50%
176,566
36.0%
313,895
16.32%
19,234
1.00%
0.00%
333,128
17.32%
774,158
40.25%
293,315
15.25%
480,844
25.00%
82,167
34,621
1.80%
0.00%
216,340
138,064
63.82%
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
425,774
18.20%
24,564
1.05%
87,728
3.75%
23,394
1.00%
1,739,358
74.35%
600,061
25.65%
0.00%
600,061
25.65%
210,021
35.0%
390,040
16.67%
23,394
1.00%
0.00%
413,434
17.67%
907,694
38.80%
356,761
15.25%
550,933
23.55%
70,089
35,091
1.50%
0.00%
308,253
171,330
55.58%
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
5.25
6.25
2015 E
2016 E
2,749,034 $ 3,140,260 $
17.51%
14.23%
1,413,004 $ 1,614,094 $
51.40%
51.40%
1,336,031 $ 1,526,167 $
48.60%
48.60%
7.25
8.25
2017 E
2018 E
3,503,682 $ 3,794,811 $
11.57%
8.31%
1,799,141 $ 1,946,738 $
51.35%
51.30%
1,704,541 $ 1,848,073 $
48.65%
48.70%
9.25
10.25
2019 E
2020 E
4,030,417 $ 4,291,713
6.21%
6.48%
2,065,589 $ 2,253,149
51.25%
52.50%
1,964,828 $ 2,038,564
48.75%
47.50%
497,575
18.10%
30,239
1.10%
104,463
3.80%
27,490
1.00%
2,045,282
74.40%
703,753
25.60%
0.00%
703,753
25.60%
239,276
34.0%
464,477
16.90%
27,490
1.00%
0.00%
491,967
17.90%
1,058,378
38.50%
426,100
15.50%
632,278
23.00%
81,345
31,614
1.15%
4,000
0.15%
375,008
181,530
48.41%
641,174
18.30%
35,037
1.00%
129,636
3.70%
35,037
1.00%
2,604,988
74.35%
898,695
25.65%
0.00%
898,695
25.65%
305,556
34.0%
593,138
16.93%
35,037
1.00%
0.00%
628,175
17.93%
1,333,151
38.05%
551,830
15.75%
781,321
22.30%
68,482
35,037
1.00%
0.00%
524,656
192,641
36.72%
739,582
18.35%
46,350
1.15%
141,065
3.50%
30,228
0.75%
2,992,585
74.25%
1,037,832
25.75%
0.00%
1,037,832
25.75%
352,863
34.0%
684,969
17.00%
30,228
0.75%
0.00%
715,198
17.75%
1,529,543
37.95%
638,821
15.85%
890,722
22.10%
50,172
40,304
1.00%
0.00%
624,722
173,990
27.85%
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
569,957
18.15%
31,403
1.00%
120,900
3.85%
31,403
1.00%
2,336,354
74.40%
803,907
25.60%
0.00%
803,907
25.60%
273,328
34.0%
530,578
16.90%
31,403
1.00%
0.00%
561,981
17.90%
1,199,579
38.20%
486,740
15.50%
712,839
22.70%
80,561
31,403
1.00%
0.00%
450,017
189,723
42.16%
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
698,245
18.40%
41,743
1.10%
132,818
3.50%
34,153
0.90%
2,819,545
74.30%
975,266
25.70%
0.00%
975,266
25.70%
331,591
34.0%
643,676
16.96%
34,153
0.90%
0.00%
677,829
17.86%
1,438,233
37.90%
597,683
15.75%
840,551
22.15%
59,229
45,538
1.20%
0.00%
573,062
183,255
31.98%
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
783,238
18.25%
53,646
1.25%
171,669
4.00%
49,355
1.15%
3,261,702
76.00%
1,030,011
24.00%
0.00%
1,030,011
24.00%
360,504
35.0%
669,507
15.60%
49,355
1.15%
0.00%
718,862
16.75%
1,600,809
37.30%
686,674
16.00%
914,135
21.30%
23,413
51,501
1.20%
0.00%
643,949
156,197
24.26%
16
Deckers Outdoor Corporation
university of oregon investment group
http://uoig.uoregon.edu
APPENDIX 3 – DISCOUNTED CASH FLOWS ANALYSIS ASSUMPTIONS
Assumptions for Discounted Free Cash Flows Model
35.00% Terminal Growth Rate
3.41% Terminal Value
$
PV of Terminal Value
$
Beta
1.59 Sum of PV Free Cash Flows $
Market Risk Premium
7% Firm Value
$
% Equity
100.00% LT Debt
$
% Debt
0.00% Cash
$
CAPM
14.54% Equity Value
$
WACC
14.54% Diluted Share Count
Implied Price
$
Current Price
Under (Over) Valued
Tax Rate
Risk-Free Rate
3.00%
5,747,548.98
1,478,805
1,634,670
3,364,211
250,736
3,364,211
39,228
85.76
72.38
18.49%
APPENDIX 4 – BETA SENSITIVITY ANALYSIS
Beta
1.83
1.77
1.71
1.65
1.59
1.53
1.47
1.41
1.35
St. Deviation Implied Price Under (Over) Valued
2.00
$
72.98
-1.55%
1.50
$
75.84
2.31%
1.00
$
78.91
6.45%
0.50
$
82.21
10.90%
0.00
$
85.76
15.69%
-0.50
$
89.60
20.87%
-1.00
$
93.76
26.48%
-1.50
$
98.28
32.58%
-2.00
$
103.20
39.21%
($ in millions, except per share data)
Net Revenues
2008
2009
2010
2011 E
2012 E
2013 E
2014 E
2015 E
2016 E
2017 E
2018 E
2019 E
2020 E
$ 689,445 $ 813,177 $ 995,865 $ 1,236,874 $ 1,545,257 $ 1,923,374 $ 2,339,419 $ 2,749,034 $ 3,140,260 $ 3,503,682 $ 3,794,811 $ 4,030,417 $ 4,291,713
Current Assets
Cash and Cash Equivalents
% of Revenues
Short term Investments
% of Revenues
A/R
% of Revenues
Prov. For Doubtful Accts
% of A/R
Total Inventory
% of Revenues
Prepaid Expenses & Other Current Assets
% of Revenues
Total Current Assets
% of Revenues
Adjusted Total Current Assets
$ 176,804
25.64%
$ 17,976
2.61%
$ 108,129
15.68%
$ 10,706
9.90%
$ 92,740
13.45%
$ 3,691
0.54%
$ 410,046
59.47%
$ 233,242
$ 315,862
38.84%
$ 26,120
3.21%
$ 76,427
9.40%
$ 11,790
15.43%
$ 85,356
10.50%
$ 7,210
0.89%
$ 522,765
64.29%
$ 206,903
$ 250,736
25.18%
$
0.00%
$ 142,232
14.28%
$ 22,599
15.89%
$ 197,313
19.81%
$ 17,633
1.77%
$ 630,513
63.31%
$ 379,777
$ 321,587
26.00%
$
0.00%
$ 173,162
14.00%
$ 160,794
13.00%
$ 185,531
15.00%
$ 12,369
1.00%
$ 853,443
69.00%
$ 531,856
$ 417,219
27.00%
$
0.00%
$ 216,336
14.00%
$ 185,431
12.00%
$ 216,336
14.00%
$ 11,589
0.75%
$ 1,046,911
67.75%
$ 629,692
$ 538,545
28.00%
$
0.00%
$ 269,272
14.00%
$ 211,571
11.00%
$ 278,889
14.50%
$ 14,425
0.75%
$ 1,312,703
68.25%
$ 774,158
$ 678,431
29.00%
$
0.00%
$ 322,840
13.80%
$ 233,942
10.00%
$ 333,367
14.25%
$ 17,546
0.75%
$ 1,586,126
67.80%
$ 907,694
$ 793,220
29.00%
$
0.00%
$ 377,992
13.75%
$ 274,903
10.00%
$ 384,865
14.00%
$ 20,618
0.75%
$ 1,851,598
67.35%
$ 1,058,378
$ 910,676
29.00%
$
0.00%
$ 431,786
13.75%
$ 314,026
10.00%
$ 431,786
13.75%
$ 21,982
0.70%
$ 2,110,255
67.20%
$ 1,199,579
$ 981,031
28.00%
$
0.00%
$ 476,501
13.60%
$ 350,368
10.00%
$ 481,756
13.75%
$ 24,526
0.70%
$ 2,314,182
66.05%
$ 1,333,151
$ 1,062,547
28.00%
$
0.00%
$ 519,889
13.70%
$ 379,481
10.00%
$ 512,300
13.50%
$ 26,564
0.70%
$ 2,500,781
65.90%
$ 1,438,233
$ 1,128,517
28.00%
$
0.00%
$ 544,106
13.50%
$ 403,042
10.00%
$ 554,182
13.75%
$ 28,213
0.70%
$ 2,658,060
65.95%
$ 1,529,543
$ 1,201,680
28.00%
$
0.00%
$ 579,381
13.50%
$ 386,254
9.00%
$ 592,256
13.80%
$ 42,917
1.00%
$ 2,802,489
65.30%
$ 1,600,809
Current Liabilities
A/P
% of Revenues
Accrued Payroll
% of Revenues
Income Taxes Payable
% of Revenues
Other accrued expenses
% of Revenues
Total Current Liabilities
% of Revenues
$ 42,960
6.23%
$ 14,996
2.18%
$ 24,577
3.56%
$ 12,676
1.84%
$ 95,209
13.81%
$ 47,331
5.82%
$ 20,869
2.57%
$ 19,685
2.42%
$ 12,985
1.60%
$ 100,870
12.40%
$ 59,752
6.00%
$ 27,884
2.80%
$
0.00%
$ 19,917
2.00%
$ 107,553
10.80%
$
$
$
$
$ 120,211
6.25%
$ 67,318
3.50%
$ 67,318
3.50%
$ 38,467
2.00%
$ 293,315
15.25%
$ 146,214
6.25%
$ 81,880
3.50%
$ 81,880
3.50%
$ 46,788
2.00%
$ 356,761
15.25%
$ 171,815
6.25%
$ 103,089
3.75%
$ 96,216
3.50%
$ 54,981
2.00%
$ 426,100
15.50%
$ 196,266
6.25%
$ 117,760
3.75%
$ 109,909
3.50%
$ 62,805
2.00%
$ 486,740
15.50%
$ 218,980
6.25%
$ 140,147
4.00%
$ 122,629
3.50%
$ 70,074
2.00%
$ 551,830
15.75%
$ 237,176
6.25%
$ 151,792
4.00%
$ 132,818
3.50%
$ 75,896
2.00%
$ 597,683
15.75%
$ 251,901
6.25%
$ 165,247
4.10%
$ 141,065
3.50%
$ 80,608
2.00%
$ 638,821
15.85%
$ 268,232
6.25%
$ 182,398
4.25%
$ 150,210
3.50%
$ 85,834
2.00%
$ 686,674
16.00%
77,305
6.25%
37,106
3.00%
$ 43,291
3.50%
$ 24,737
2.00%
$ 182,439
14.75%
96,579
6.25%
49,448
3.20%
$ 54,084
3.50%
$ 30,905
2.00%
$ 231,016
14.95%
17
Deckers Outdoor Corporation
university of oregon investment group
http://uoig.uoregon.edu
($ in thousands, except per share data)
Segment
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
UGG Wholesale
$ 150,279 $ 182,369 $ 291,908 $ 483,781 $ 566,964 $ 675,000 $ 823,500 $ 1,029,375 $ 1,286,719 $ 1,595,531 $ 1,898,682 $ 2,183,485 $ 2,445,503 $ 2,641,143 $ 2,773,200 $ 2,911,860
% Change
21%
60%
66%
17%
19%
22%
25%
25%
24%
19%
15%
12%
8%
5%
5%
Teva Wholesale
$ 80,446 $ 75,283 $ 82,003 $ 80,882 $ 71,952 $ 97,900 $ 123,354 $ 156,660 $ 192,691 $ 235,083 $ 275,048 $ 316,305 $ 354,261 $ 379,060 $ 390,431 $ 413,857
% Change
-6%
9%
-1%
-11%
36%
26%
27%
23%
22%
17%
15%
12%
7%
3%
6%
Other Brands Wholesale
$ 6,980 $ 10,903 $ 11,163 $ 17,558 $ 19,644 $ 22,001 $ 23,761 $ 25,662 $ 27,202 $ 28,290 $ 34,639 $ 45,030 $ 54,037 $ 67,546 $ 84,432 $ 101,319
% Change
56%
2%
57%
12%
12%
8%
8%
6%
4%
22%
30%
20%
25%
25%
20%
eCommerce
$ 25,912 $ 28,886 $ 45,473 $ 68,769 $ 75,666 $ 86,964 $ 100,009 $ 115,010 $ 143,762 $ 161,014 $ 185,166 $ 212,941 $ 244,882 $ 284,063 $ 332,354 $ 392,177
% Change
11%
57%
51%
10%
15%
15%
15%
25%
12%
15%
15%
15%
16%
17%
18%
Retail stores
$ 1,143 $ 6,982 $ 18,382 $ 38,455 $ 78,951 $ 114,000 $ 166,250 $ 218,550 $ 273,000 $ 319,500 $ 355,500 $ 382,500 $ 405,000 $ 423,000 $ 450,000 $ 472,500
% Change
511%
163%
109%
105%
44%
46%
31%
25%
17%
11%
8%
6%
4%
6%
5%
Total
$ 264,760 $ 304,423 $ 448,929 $ 689,445 $ 813,177 $ 995,865 $ 1,236,874 $ 1,545,257 $ 1,923,374 $ 2,339,419 $ 2,749,034 $ 3,140,260 $ 3,503,682 $ 3,794,811 $ 4,030,417 $ 4,291,713
15%
47%
54%
18%
22%
24%
25%
24%
22%
18%
14%
12%
8%
6%
6%
Net sales by location:
US
% Revenue
International
% Revenue
Total
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
266,092 $ 386,593 $ 581,512 $ 645,993 $ 776,775 $ 927,655 $ 1,081,680 $ 1,269,427 $ 1,520,622 $ 1,786,872 $ 2,009,767 $ 2,207,320 $ 2,352,783 $ 2,418,250 $ 2,489,194
87.4%
86.1%
84.3%
79.4%
78.0%
75.0%
70.0%
66.0%
65.0%
65.0%
64.0%
63.0%
62.0%
60.0%
58%
38,331 $ 62,336 $ 107,933 $ 167,184 $ 219,090 $ 309,218 $ 463,577 $ 653,947 $ 818,797 $ 962,162 $ 1,130,494 $ 1,296,362 $ 1,442,028 $ 1,612,167 $ 1,802,520
12.6%
13.9%
15.7%
20.6%
22.0%
25.0%
30.0%
34.0%
35.0%
35.0%
36.0%
37.0%
38.0%
40.0%
42%
304,423 $ 448,929 $ 689,445 $ 813,177 $ 995,865 $ 1,236,874 $ 1,545,257 $ 1,923,374 $ 2,339,419 $ 2,749,034 $ 3,140,260 $ 3,503,682 $ 3,794,811 $ 4,030,417 $ 4,291,713
Retail Stores
Store count
Revenue/Store
Total Retail Revenue
Margin
Total Retail Income
Income/Store
2005
2006
$
$
$
$
2007
5
1,396
6,982
16.9%
1,180
236
$
$
$
$
7
2,626
18,382
17.4%
3,194
456
2008
$
$
$
$
12
3,205
38,455
17.3%
6,649
554
2009
$
$
$
$
18
4,386
78,951
23.4%
18,498
1,028
2010
$
$
$
$
24
4,750
114,000
25.0%
28,500
1,188
2011
$
$
$
$
2012
35
4,750
166,250
25.0%
41,563
1,188
$
$
$
$
2013
47
4,650
218,550
26.0%
56,823
1,209
$
$
$
$
2014
60
4,550
273,000
26.5%
72,345
1,206
$
$
$
$
2015
71
4,500
319,500
26.7%
85,307
1,202
$
$
$
$
2016
79
4,500
355,500
27.0%
95,985
1,215
$
$
$
$
2017
85
4,500
382,500
27.0%
103,275
1,215
$
$
$
$
2018
90
4,500
405,000
27.1%
109,755
1,220
$
$
$
$
2019
94
4,500
423,000
27.1%
114,633
1,220
$
$
$
$
2020
100
4,500
450,000
27.2%
122,400
1,224
105
$
4,500
$ 472,500
27.3%
$ 128,756
$
1,226
APPENDIX 6 – SOURCES









FactSet
Seeking Alpha
Briefing.com
TD Ameritrade
Yahoo! Finance
Deckers.com
Teva.Com
UggAustralia.com
IBIS World
18