General (Policies)

12 Months Ended

Mar. 31, 2026

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation. The consolidated financial statements and accompanying notes thereto (referred to herein

as consolidated financial statements) as of March 31, 2026, and 2025, and for the years ended March 31, 2026,

2025, and 2024 (referred to herein as “year ended” or “years ended,” or as “fiscal year 2026,” “fiscal year 2025,” and

“fiscal year 2024,” respectively) are prepared in accordance with generally accepted accounting principles in the

United States (US GAAP).

Consolidation

Consolidation. The consolidated financial statements include the accounts of the Company and its wholly owned

subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Reportable Operating Segments

Reportable Operating Segments. As of March 31, 2026, the Company’s three reportable operating segments

include the worldwide operations of the HOKA brand, UGG brand, and Other brands (primarily consisting of the

Teva brand) (collectively, the Company’s reportable operating segments). The Other brands reportable operating

segment includes current and historical results of brands previously sold and brands for which standalone

operations have been phased out, as discussed below.

Consistent with the Company’s continuous focus on pursuing its most profitable long-term opportunities,

management has taken the following strategic actions to streamline its brand portfolio within the Other brands

reportable operating segment:

•During the second quarter of fiscal year 2026, the Company began phasing out standalone

operations for the AHNU brand. The Company closed Ahnu.com as of October 1, 2025, and

completed the phase out of the AHNU brand in the wholesale channel during the third and fourth

quarters of fiscal year 2026. The Company did not incur material exit costs or obligations

associated with this plan.

•During the third quarter of fiscal year 2025, the Company began phasing out standalone operations

for the Koolaburra brand. The Company closed Koolaburra.com as of the end of fiscal year 2025

and completed the phase out of the Koolaburra brand in the wholesale channel during third and

fourth quarters of fiscal year 2026. The Company did not incur material exit costs or obligations

associated with this plan.

•The Company completed the sale of the Sanuk brand during the second quarter of fiscal year 2025.

The financial results for the Company’s reportable operating segments during fiscal year 2025

present the former Sanuk brand through August 15, 2024 (Sanuk Brand Sale Date).

Refer to Note 13, “Reportable Operating Segments,” for further information on the Company’s reportable operating

segments.

Information reported to the Chief Operating Decision Maker (CODM), who is the Principal Executive Officer, is

organized into the Company’s three reportable operating segments, which include the brand operations for the

HOKA brand, UGG brand, and Other brands. The operations of each brand within these reportable operating

segments are managed separately because each requires different marketing, research and development, design,

sourcing, and sales strategies.

Segment Net Sales, Gross Margin, and Income from Operations. The CODM regularly evaluates the

performance of each reportable operating segment based on net sales, gross profit as a percentage of net sales

(gross margin), and income from operations when making decisions about resource allocations to each reportable

operating segment. Income from operations of each reportable operating segment includes certain costs which are

specifically related to each reportable operating segment and that are regularly provided to the CODM. These costs

consist of cost of sales; payroll and related expenses, including stock-based compensation; advertising, marketing,

and promotion expenses; rent and occupancy (including maintenance and utilities); depreciation and other related

costs; and other segment items. There are no inter-segment sales for any period presented. The accounting policies

applicable to the Company’s reportable operating segments are consistent with those described in Note 1,

“General.”

Income from operations of each reportable operating segment excludes enterprise and shared brand expenses as

well as total other income, net, which are not used to assess reportable operating segment performance.

Unallocated enterprise and shared brand expenses are costs that are managed centrally and not specific to any one

brand. These costs are primarily comprised of certain payroll and related expenses, including stock-based

compensation; global IT expenses; 3PL service fees; depreciation, rent, and occupancy for owned warehouses and

DCs and offices; and other SG&A expenses, such as costs for contract services, materials, supplies, and travel.

These costs span multiple functions including owned warehouses and DCs and 3PL service fees, along with

enterprise costs which include centralized commercial operations, IT, finance, human resources, legal, supply chain,

and corporate executives.

Use of Estimates

Use of Estimates. The preparation of the Company’s consolidated financial statements in accordance with US

GAAP requires management to make estimates and assumptions that affect the amounts reported. Management

bases these estimates and assumptions upon historical experience, existing and known circumstances,

authoritative accounting pronouncements and other factors it believes to be reasonable. In addition, management

has considered the potential impact of macroeconomic and geopolitical factors on its business and results of

operations, including inflationary pressures, increased tariffs, rising supply chain costs, high interest rates, foreign

currency exchange rate volatility, escalating global conflicts, changes in discretionary spending, and recession risks.

Although the full impact of these factors is unknown, the Company believes it has made appropriate accounting

estimates and assumptions based on the facts and circumstances available as of the reporting date. However,

actual results could differ materially from these estimates and assumptions, which may result in material effects on

the Company’s financial condition, results of operations, and liquidity.

Significant accounting policies that require the use of management estimates and assumptions include those

related to revenue recognition such as sales returns, chargebacks, and sales discounts as well as contract

liabilities; accounts receivable allowances; inventory; income taxes including valuation of deferred income taxes;

stock-based compensation; impairment assessments, including for long-lived assets; the fair value of financial

instruments; those related to operating lease assets and lease liabilities including term, classification, and the

Company’s incremental borrowing rate (IBR).

Foreign Currency Translation

Foreign Currency Translation. The Company considers the United States (US) dollar to be its functional currency.

The Company’s wholly owned foreign subsidiaries have various assets and liabilities, primarily cash, receivables,

and payables, which are denominated in currencies other than its functional currency. The Company remeasures

these monetary assets and liabilities using the exchange rate at the end of the reporting period, which results in

gains and losses that are recorded in selling, general, and administrative (SG&A) expenses in the consolidated

statements of comprehensive income as incurred. In addition, the Company translates assets and liabilities of

subsidiaries with reporting currencies other than US dollars into US dollars using the exchange rates at the end of

the reporting period, which results in financial statement translation gains and losses recorded in other

comprehensive income or loss (OCI), net of tax, in the consolidated statements of comprehensive income.

Recent Accounting Pronouncements

Recent Accounting Pronouncements. The Financial Accounting Standards Board has issued Accounting

Standards Updates (ASUs) that have been adopted and not yet adopted by the Company as stated below.

Recently Adopted. The following is a summary of an ASU adopted by the Company and its impact upon adoption:

Standard	Description	Impact upon Adoption
ASU 2023-09 - Improvements to Income Tax Disclosures (ASU 2023-09)	This ASU requires annual disclosures of prescribed standard categories for the components of the effective tax rate reconciliation, disclosure of income taxes paid disaggregated by jurisdiction, and other income-tax related disclosures. This ASU is effective on a prospective basis, with retrospective application permitted, for fiscal years beginning after December 15, 2024. Early adoption is permitted.	The Company prospectively adopted this ASU beginning with this Annual Report. This ASU did not have a material impact on the Company’s consolidated financial statements other than additional disclosures under Note 5, “Income Taxes.”

Not Yet Adopted. The following is a summary of each ASU that has been issued through May 1, 2026, and is

applicable to the Company, but which has not yet been adopted, as well as the planned period of adoption, and the

expected impact on the Company upon adoption:

Standard	Description	Planned Period of Adoption	Expected Impact on Adoption
ASU 2024-03 - Disaggregation of Income Statement Expenses (as amended by ASU 2025-01)	This ASU requires disaggregated disclosure of relevant statement of comprehensive income expense captions including tabular presentation of prescribed expense categories such as purchases of inventory, employee compensation, depreciation, intangible asset amortization, and other specific expense, gains, and losses required by existing US GAAP. This ASU is effective on a prospective basis, with retrospective application permitted, for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted.	Q4 FY 2028 and Q1 FY 2029	The Company is currently evaluating the impact of the adoption of this ASU on its disclosures in its annual and interim consolidated financial statements.
ASU 2025-05 - Measurement of Credit Losses for Accounts Receivable and Contract Assets	This ASU provides a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset when estimating expected credit losses on trade accounts receivable and contract assets. This ASU is effective on a prospective basis for fiscal years beginning after December 15, 2025. Early adoption is permitted.	Q1 FY 2027	The Company does not expect the adoption of this ASU to have a material impact on its annual consolidated financial statements and interim condensed consolidated financial statements.
ASU 2025-06 - Internal-Use Software	This ASU amends recognition and disclosure guidance for internal-use software costs, removing the previous software development stage model with a more principles-based, probable-to-complete recognition threshold. This ASU is effective on either a retrospective, prospective, or modified prospective basis, for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. Early adoption is permitted.	Q1 FY 2029	The Company is currently evaluating the impact of the adoption of this ASU on its annual consolidated financial statements and interim condensed consolidated financial statements.
ASU 2025-09 - Derivatives and Hedging (Topic 815): Hedge Accounting Improvements	This ASU clarifies and improves certain aspects of hedge accounting, including guidance on the assessment of similar risk exposure for groups of forecasted transactions related to cash flow hedges and other targeted amendments intended to better align hedge accounting with an entity’s risk management activities. This ASU is effective on a prospective basis for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted.	Q1 FY 2028	The Company is currently evaluating the impact of the adoption of this ASU on its annual consolidated financial statements and interim condensed consolidated financial statements.
ASU 2025-11 - Interim Reporting: Narrow-Scope Improvements	This ASU requires disclosure of events since the most recent annual reporting period that have a material impact on interim results, provides a comprehensive list of required interim disclosures, and clarifies the form and content requirements for interim financial statements. This ASU is effective on either a prospective or retrospective basis for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted.	Q1 FY 2029	The Company is currently evaluating the impact of the adoption of this ASU on disclosures in its interim condensed consolidated financial statements.

Cash and Cash Equivalents

Cash and Cash Equivalents. Cash and cash equivalents include cash on hand, demand deposits, and all highly

liquid investments, such as money-market funds, with an original maturity of three months or less. The carrying

value of money-market funds approximates the fair value as it is considered a highly liquid investment when

purchased. Money-market funds are recorded in cash and cash equivalents in the consolidated balance sheets.

Refer to Note 4, “Fair Value Measurements,” for further information on the fair value of money-market funds.

The Company maintains a portion of its cash in Federal Deposit Insurance Corporation insured bank deposit

accounts which, at times, may exceed federally insured limits. The Company did not experience any losses in such

accounts during the years ended March 31, 2026, 2025, and 2024. Based on the size and strength of the banking

institutions used, the Company does not believe it is exposed to any significant credit risks in cash.

Allowances for Doubtful Accounts

Allowances for Doubtful Accounts. The Company provides an allowance against trade accounts receivable for

estimated losses that may result from customers’ inability to pay. The Company determines the amount of the

allowance by analyzing known uncollectible accounts, aged trade accounts receivable, economic conditions and

forecasts, historical experience, and the customers’ creditworthiness. Trade accounts receivable that are

subsequently determined to be uncollectible are charged or written off against this allowance. The allowance

includes specific allowances for trade accounts, for which all or a portion are identified as potentially uncollectible

based on known or anticipated losses. Additions to the allowance represent bad debt expense estimates which are

recorded in SG&A expenses in the consolidated statements of comprehensive income.

Inventories

Inventories. Inventories, which are predominantly comprised of finished goods on hand and in transit, are stated at

the lower of cost (weighted moving average) or net realizable value at each financial statement date. Net realizable

value is the estimated selling price in the ordinary course of business, less reasonably predictable costs to sell. The

Company regularly reviews inventory for excess, obsolete, and impaired inventory to evaluate write-downs to the

lower of cost or realizable value.

The Company outsources the production of its finished goods to independent third-party contractors that

manufacture all of its products (independent manufacturers), the majority of which are in Southeast Asia. During the

year ended March 31, 2026, production of finished goods was predominantly from Vietnam and Indonesia, while

less than 5% was from China or any other individual country. The majority of raw materials and components used by

independent manufacturers are purchased from affiliates, manufacturers, factories, and other agents (designated

suppliers), who work with other subcontractors that extract, process, or convert these raw materials. Sheepskin is

used to manufacture a significant portion of the Company’s UGG brand products and is sourced primarily from

designated suppliers in Australia and processed by two tanneries in China.

Cloud Computing Arrangements (CCAs)

Cloud Computing Arrangements (CCAs). The Company enters into various CCAs that are governed by service

contracts (hosting arrangements) to support operations. Application development stage implementation costs

(implementation costs) of a hosting arrangement are deferred and recorded to prepaid expenses and other assets

in the consolidated balance sheets. Amortization of implementation costs begins when the software is ready for its

intended use. Amortization of implementation costs are calculated on a straight-line basis over the term of the

hosting arrangement, including reasonably certain renewals, which are generally one to three years. Amortization

expense is recorded in SG&A expenses in the consolidated statements of comprehensive income.

Property and Equipment, Net.

Property and Equipment, Net. Property and equipment are stated at cost less accumulated depreciation, and

generally have a useful life of at least one year. Property and equipment include tangible, non-consumable items

owned by the Company. Software implementation costs are capitalized if they are incurred during the application

development stage and relate to costs to obtain computer software from third parties, including related consulting

expenses, or costs incurred to modify existing software that results in additional upgrades or enhancements that

provide additional functionality.

Depreciation of property and equipment is calculated using the straight-line method based on the estimated useful

life. Leasehold improvements are amortized to their residual value, if any, on the straight-line basis over their

estimated economic useful lives or the lease term, whichever is shorter. Changes in the estimate of the useful life of

an asset may occur after an asset is placed in service. For example, this may occur as a result of the Company

incurring costs that prolong the useful life of an asset, which would be recorded as an adjustment to depreciation

over the revised remaining useful life. Depreciation is recorded in SG&A expenses in the consolidated statements of

comprehensive income. Depreciation was $74,590, $67,579, and $54,958 during the years ended March 31, 2026,

2025, and 2024, respectively.

Operating Lease Assets and Lease Liabilities

Operating Lease Assets and Lease Liabilities. The Company determines if an arrangement contains a lease at

inception of a contract. The Company recognizes operating lease assets and lease liabilities in the consolidated

balance sheets on the lease commencement date, based on the present value of the outstanding lease payments

over the reasonably certain lease term. The lease term includes the non-cancelable period at the lease

commencement date, plus any additional period covered by the Company’s option to extend (or not to terminate)

the lease that is reasonably certain to be exercised, or an option to extend (or not to terminate) a lease that is

controlled by the lessor.

Operating lease assets are initially measured at cost, which comprises the initial amount of the associated lease

liabilities, adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs

incurred, less any lease incentives, such as tenant allowances. Operating lease assets are subsequently measured

throughout the lease term at the carrying amount of the associated lease liabilities, plus initial direct costs, plus or

minus any prepaid or accrued lease payments, less the unamortized balance of lease incentives received.

Operating lease assets and lease liabilities are presented separately in the consolidated balance sheets on a

discounted basis. The current portion of operating lease liabilities is presented within current liabilities, while the

long-term portion is presented separately as long-term operating lease liabilities. Refer to Note 7, “Leases,” for

further information on the discount rate methodology used to measure operating lease assets and lease liabilities.

Rent expense for operating lease payments is recognized on a straight-line basis over the lease term and recorded

in SG&A expenses in the consolidated statements of comprehensive income. Lease payments recorded in the

operating lease liabilities (1) are fixed payments, including in-substance fixed payments and fixed rate increases,

owed over the lease term and (2) exclude any lease prepayments as of the periods presented. Refer to Note 7,

“Leases,” for further information on the nature of variable lease payments and the timing of recognition of rent

expense.

The Company has elected not to recognize operating lease assets and lease liabilities for short-term leases, which

are defined as those operating leases with a term of 12 months or less. Instead, lease payments for short-term

leases are recognized on a straight-line basis over the lease term in rent expense and recorded as a component of

SG&A expenses in the consolidated statements of comprehensive income.

The Company monitors for events that require a change in estimates for its operating lease assets and lease

liabilities, such as modifications to the terms of the contract, including the lease term, economic events that may

trigger a contractual term contingency, such as minimum lease payments or termination rights, and related changes

in discount rates used to measure the operating lease assets and lease liabilities, as well as events or

circumstances that result in lease abandonment or operating lease asset impairments. When a change in estimates

results in the remeasurement of the operating lease liabilities, a corresponding adjustment is made to the carrying

amount of the operating lease assets. The operating lease assets are remeasured and amortized on a straight-line

basis over the remaining lease term, with no impact on the related operating lease liabilities. The Company primarily leases retail stores, showrooms, offices, and distribution facilities under operating lease

contracts which vary in lease terms. Some of the Company’s operating leases contain extension options between

one to 15 years. Historically, the Company has not entered into finance leases, and its lease agreements generally

do not contain residual value guarantees, options to purchase underlying assets, or material restrictive covenants.

Variable Lease Payments. Certain leases require additional payments based on (1) actual or forecasted sales

volume (either monthly or annually), (2) reimbursement for real estate taxes (tax), (3) common area maintenance

(CAM), and (4) insurance (collectively, variable lease payments). Variable lease payments are generally excluded

from operating lease assets and lease liabilities and are recorded in rent expense as a component of SG&A

expenses in the consolidated statements of comprehensive income. Some leases are dependent upon forecasted

annual sales volume, and lease payments are recognized on a straight-line basis as rent expense over each annual

period when the achievement of the related sales target is reasonably likely to occur. Other variable lease

payments, such as tax, CAM, and insurance, are recognized in rent expense as incurred. Some leases contain one

fixed lease payment that includes variable lease payments, which are considered non-lease components. The

Company has elected to account for these instances as a single lease component and the total of these fixed

payments is used to measure the operating lease assets and lease liabilities.

Discount Rate. The Company discounts its unpaid lease payments using the interest rate implicit in the lease or, if

the rate cannot be readily determined, its IBR. Generally, the Company cannot determine the interest rate implicit in

the lease because it does not have access to the lessor’s estimated residual value or the amount of the lessor’s

deferred initial direct costs. The Company has a centralized treasury function, which enables the Company to use a

portfolio approach to discount lease obligations. Therefore, the Company generally derives a discount rate at the

lease commencement date by utilizing its IBR, which is based on what the Company would have to pay on a

collateralized basis to borrow an amount equal to its lease payments under similar terms. Because the Company

does not currently borrow on a collateralized basis under its revolving credit facilities, it uses the interest rate it pays

on its non-collateralized borrowings under its Primary Credit Facility as an input for deriving an appropriate IBR,

adjusted for the amount of the lease payments, the lease term, and the effect on that rate of designating specific

collateral with a value equal to the unpaid lease payments for that lease.

Asset Retirement Obligations (AROs)

Asset Retirement Obligations (AROs). The Company is contractually obligated under certain of its lease

agreements to restore certain retail, office, and warehouse facilities back to their original conditions. At lease

inception, the present value of the estimated fair value of these liabilities is recorded along with the related asset.

The liability is estimated based on assumptions requiring management’s judgment, including facility closing costs

and discount rates, and is accreted to its projected future value over the life of the asset.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill and Indefinite-Lived Intangible Assets. Goodwill represents the excess of the purchase price over the

estimated fair value of net assets acquired in a business combination. As of March 31, 2026, and 2025, the carrying

value of goodwill recorded in the consolidated balance sheets was $13,990, consisting of $7,889 and $6,101

attributable to the HOKA brand and UGG brand reportable operating segments, respectively. The Company also

holds an indefinite-lived intangible asset for a trademark related to the Teva brand. As of March 31, 2026, and 2025,

the carrying value of the indefinite-lived intangible asset recorded within other intangible assets in the consolidated

balance sheets was $15,454.

Goodwill and indefinite-lived intangible assets are not amortized and are assessed for impairment at least annually

and if events or changes in circumstances indicate that the carrying value may not be recoverable. The Company

performs its annual goodwill assessment at the reporting unit level (the wholesale channel of each of the HOKA

brand and UGG brand) as of December 31st and performs its annual indefinite-lived intangible asset assessment

for the Teva brand as of October 31st. When evaluating for impairment, the Company first performs a qualitative

assessment. If the qualitative assessment indicates potential impairment, the Company performs a quantitative

assessment to estimate fair value using discounted cash flow models (such as an income approach) and other

market-based valuation techniques. An impairment charge is recognized for the excess of the carrying value over

fair value.

Recoverability of Definite-Lived Intangible and Other Long-Lived Assets

Definite-Lived Intangible and Other Long-Lived Assets. Definite-lived intangible assets include definite-lived

trademarks. As of March 31, 2026, and 2025, the definite-lived intangible asset net carrying value is immaterial.

Other long-lived assets include operating lease assets and property and equipment (primarily machinery and

equipment, internal-use software (including CCAs), and related leasehold improvements).

Definite-lived intangible and other long-lived assets are amortized on a straight-line basis over their estimated useful

lives. Definite-lived intangible assets and other long-lived assets are reviewed for impairment at the asset group

level, which is the lowest level for which identifiable cash flows are largely independent, when events or changes in

circumstances indicate that the carrying amount may not be recoverable. If indicators are present, recoverability is

assessed by comparing the carrying value of the asset group to estimated undiscounted future cash flows; if not

recoverable, an impairment loss is recognized for the excess of carrying value over estimated fair value. Estimated

fair value is generally determined using discounted future cash flows or other market -based valuation techniques.

Impairment losses, if any, are recorded within SG&A expenses in the consolidated statements of comprehensive

income.

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities. The Company may use derivative instruments to partially offset its

business exposure to foreign currency risk on expected cash flows and certain existing assets and liabilities,

primarily intercompany balances. To reduce the volatility in earnings from fluctuations in foreign currency exchange

rates, the Company may hedge a portion of forecasted sales denominated in foreign currencies. The Company

enters into foreign currency forward or option contracts (derivative contracts), generally with maturities up to 18

months or less to manage foreign currency risk and certain of these derivative contracts are designated as cash

flow hedges of forecasted sales (Designated Derivative Contracts). The Company may also enter into derivative

contracts that are not designated as cash flow hedges (Non-Designated Derivative Contracts), to offset a portion of

anticipated gains and losses on certain intercompany balances until the expected time of repayment. The Company

does not use derivative contracts for trading purposes.

Designated and Non-Designated Derivative Contracts are recorded at fair value measured using Level 2 fair value

inputs, consisting of quoted forward spot rates from counterparties at the end of the applicable periods, which are

corroborated by market-based pricing. The related assets and liabilities are classified based on their maturity dates

and recorded in other current assets or other assets, and in other accrued expenses or other long-term liabilities, as

applicable, in the consolidated balance sheets.

Changes in the fair value of Designated Derivative Contracts are recorded, net of tax, in OCI in the consolidated

statements of comprehensive income and in accumulated other comprehensive loss (AOCL) in the consolidated

balance sheets. Amounts are reclassified from AOCL to net sales in the consolidated statements of comprehensive

income when the related sales are recognized and to SG&A expenses in the consolidated statements of

comprehensive income after maturity. When it is probable that a forecasted transaction will not occur, the Company

discontinues hedge accounting and the accumulated gains or losses in AOCL related to the hedging relationship are

immediately recorded in OCI in the consolidated statements of comprehensive income. The Company includes all

hedge components in its assessment of effectiveness for its derivative contracts. Refer to Note 4, “Fair Value

Measurements,” for further information on the fair value of derivative instruments.

Changes in the fair value of Non-Designated Derivative Contracts are recorded in SG&A expenses in the

consolidated statements of comprehensive income. The changes in fair value for these contracts are generally

offset by the remeasurement gains or losses associated with the underlying foreign currency-denominated

intercompany balances, which are recorded in SG&A expenses in the consolidated statements of comprehensive

income.

The Company generally enters into over-the-counter derivative contracts with high-credit-quality counterparties, and

therefore considers the risk that counterparties fail to perform according to the terms of the contract as low. The

Company factors the nonperformance risk of the counterparties into the fair value measurements of its derivative

contracts.

Stock Repurchase Program

Stock Repurchase Program. Repurchased shares of the Company’s common stock are retired. The par value of

repurchased shares is deducted from common stock, and the excess repurchase price over par value as well as the

portion due for excise taxes, is allocated to retained earnings in the consolidated balance sheets.

Revenue Recognition

Revenue Recognition. Revenue is recognized when a performance obligation is completed at a point in time and

when the customer has obtained control. Control passes to the customer when they have the ability to direct the use

of and obtain substantially all the remaining benefits from the goods transferred. The amount of revenue recognized

is based on the transaction price, which represents the invoiced amount less known actual amounts or estimates of

variable consideration. The Company recognizes revenue at the transaction price, net of variable consideration,

including sales returns and allowances for sales discounts and chargebacks, and excludes taxes that are collected

from customers and remitted to governmental authorities, such as sales, use, certain excise, and value-added

taxes. Revenue excludes fees and sales commissions, which are expensed as incurred and are recorded in SG&A

expenses in the consolidated statements of comprehensive income. The Company’s customer contracts do not

have a significant financing component due to their short durations, which are typically effective for one year or less,

and have payment terms that are generally 30 to 60 days.

Wholesale and international distributor revenue is recognized either when products are shipped or when delivered,

depending on the applicable contract terms. Retail store and e-commerce revenue transactions are recognized at

the point of sale and upon shipment, respectively. Shipping and handling costs paid to third-party shipping

companies are recorded as cost of sales in the consolidated statements of comprehensive income. Shipping and

handling costs are a fulfillment service, and, for certain wholesale and all e-commerce transactions, revenue is

recognized when the customer is deemed to obtain control upon the date of shipment.Variable Consideration. Components of variable consideration include the estimated sales return asset and

liability, as well as allowances for chargebacks and sales discounts. Estimated variable consideration is included in

the transaction price only to the extent it is probable that a significant reversal of cumulative revenue recognized will

not occur in a future period. The Company reassesses these estimates at each reporting period and adjusts them,

as necessary, to reflect changes in facts and circumstances.

Sales Return Asset and Liability. Reserves are recorded for anticipated future returns of goods shipped prior to the

end of the reporting period. In general, the Company accepts returns for damaged or defective products for up to

one year. Returns are generally accepted from customers and end consumers up to 90 days from the point of sale

for cash or credit.

Sales returns are a refund asset for the right to recover the inventory and a refund liability for the stand-ready right

of return. Changes to the refund asset for the right to recover the inventory are recorded against cost of sales and

changes in the refund liability are recorded against gross sales in the consolidated statements of comprehensive

income. The refund asset for the right to recover the inventory is recorded in other current assets and the related

refund liability is recorded in other accrued expenses in the consolidated balance sheets. The amounts of these

reserves are determined based on several factors, including known and actual returns, historical returns, and any

recent events that could result in a change from historical return rates.

Allowance for Chargebacks. The Company provides a trade accounts receivable allowance for chargebacks for

wholesale channel sales. When customers pay their invoices, they may take deductions against their invoices that

can include chargebacks for price adjustments, short shipments, and other reasons. Therefore, the Company

records an allowance primarily for known circumstances as well as unknown circumstances based on historical

trends related to the timing and amount of chargebacks taken against customer invoices. Additions to the allowance

are recorded against gross sales or SG&A expenses in the consolidated statements of comprehensive income.

Allowance for Sales Discounts. The Company provides a trade accounts receivable allowance for sales discounts

for wholesale channel sales, which reflects a discount that customers may take, generally based on meeting certain

order, shipment or prompt payment terms. The Company uses the amount of the discounts that are available to be

taken against the period end trade accounts receivable to estimate and record a corresponding reserve for sales

discounts. Additions to the allowance are recorded against gross sales in the consolidated statements of

comprehensive income.

Contract Liabilities. Contract liabilities are performance obligations that the Company expects to satisfy or relieve

within the next 12 months, advance consideration obtained prior to satisfying a performance obligation, or

unconditional obligations to provide goods or services under non-cancelable contracts before the transfer of goods

or services to the customer has occurred. Contract liabilities are recorded in other accrued expenses in the

consolidated balance sheets and include loyalty programs and other deferred revenue.

Loyalty Programs. The Company has certain loyalty programs in its DTC channel where consumers can earn

rewards from qualifying purchases that are considered a material right for discounts on future purchases. The

Company defers recognition of revenue for unredeemed loyalty awards acquired through qualifying purchases until

the earlier of actual or estimated redemption or expiration. Estimates are determined based on historical redemption

and expiration patterns. Deferred Revenue. Revenue is deferred for wholesale channel transactions when certain conditions outlined within

the contract terms, including the transfer of control or delivery of product, have not occurred, such as when a

wholesale channel customer prepays for ordered product.

Cost of Sales

Cost of Sales. Cost of sales for the Company’s goods is primarily for finished goods, as well as related overhead.

Finished goods include material costs, including commodities, for products; allocation of initial molds; and tooling

cost that are amortized based on minimum contractual quantities of related product and recorded in cost of sales in

the consolidated statements of comprehensive income when the product is sold.

Distribution Costs

Distribution Costs. Distribution costs include payroll and related costs, rent and occupancy, depreciation and other

related costs, and other SG&A expenses within other segment items for owned warehousing, third-party logistics

provider (3PL) service fees, and receiving, inspecting, allocating, and packaging product. Distribution costs include

fixed costs and variable costs that fluctuate with net sales and are expensed as incurred, which are primarily

included in unallocated enterprise and shared brand expenses.

Research and Development Costs

Research and Development Costs. Research and development (R&D) costs include payroll and related costs and

other SG&A expenses within other segment items. R&D costs are expensed as incurred, and included within each

reportable operating segment, as applicable, as well as unallocated enterprise and shared brand expenses.

Advertising, Marketing, and Promotion Expenses

Advertising, Marketing, and Promotion Expenses. Advertising, marketing, and promotion expenses include media

advertising (television, radio, print, social, digital), tactical advertising (signs, banners, point-of-sale materials) and

other promotional costs; and are specific to the Company’s brands and allocated to each reportable operating

segment, as applicable. Such costs amounted to $495,838, $432,198, and $348,852 for the years ended March 31,

2026, 2025 and 2024, respectively, and are recorded in SG&A expenses in the consolidated statements of

comprehensive income. Advertising costs are expensed the first time the advertisement is run or communicated. All

other costs of advertising, marketing, and promotion are expensed as incurred.

Stock-Based Compensation

Stock-Based Compensation. All of the Company’s stock-based compensation is classified within stockholders’

equity. Stock-based compensation expense is measured at the grant date based on the fair value of the award and

is recorded, net of forfeitures, in SG&A expenses in the consolidated statements of comprehensive income ratably

over the vesting period. The grant date fair value of time-based restricted stock units (RSUs) and of employees’

purchase rights under the employee stock purchase plans is determined based on the closing market price of the

Company’s common stock on the date of grant. The grant date fair value of long-term incentive plan performance-

based stock units (LTIP PSUs), which include a market condition based on the Company’s relative total stockholder

return (TSR) as well as financial performance conditions and service requirements, is estimated as of the grant date

using a Monte Carlo simulation.

Determining the fair value and related expense of stock-based compensation requires judgment, including

estimating the percentage of awards that will be forfeited and probabilities of meeting the awards’ performance

criteria, as well as the Company’s reliance on the closing price of its stock on the New York Stock Exchange at or

near the time of grant. If actual forfeitures differ significantly from the estimates or if probabilities change during a

period, stock-based compensation expense and the Company’s results of operations could be materially impacted.Grants to Directors. Each of the Company’s nonemployee directors was entitled to receive common stock with a

total value of $170 for annual service on the Board of Directors (Board) during the year ended March 31, 2026. The

shares are issued in equal quarterly installments with the number of shares being determined using the rolling

average of the closing price of the Company’s common stock during the last ten trading days leading up to, and

including, the grant date, which is in alignment with the Company’s equity grant guidelines. Each of these shares is

fully vested and recorded as compensation expense in the consolidated statements of comprehensive income on

the date of issuance.

Employee Stock Purchase Plans. In September 2024, the Company’s stockholders approved the 2024 Employee

Stock Purchase Plan (2024 ESPP). The 2024 ESPP reserves 6,000,000 shares of the Company’s common stock

for sale to eligible employees using after-tax payroll deductions, which are refundable until purchases are made,

and are liability-classified. Each offering period under the 2024 ESPP is anticipated to run for approximately six

months with purchases occurring on the last day of each offering period (no look-back provision) at a 15% discount

on the closing price on that date. The first offering period commenced on March 1, 2025. As of March 31, 2026,

5,955,235 shares of common stock remained available for future issuance under the 2024 ESPP, subject to

adjustment for future stock splits, stock dividends, and similar changes in capitalization.

Retirement Plan

Retirement Plan. The Company provides a 401(k) defined contribution plan that eligible US employees may elect to

participate through tax-deferred contributions or other deferrals. The Company matches 50% of each eligible

participant’s deferrals on up to 6% of eligible compensation. Internationally, the Company has various defined

contribution plans. Certain international locations require mandatory contributions under social programs, and the

Company contributes at least the statutory minimums. US 401(k) matching contributions totaled $6,824, $6,528,

and $5,129 during the years ended March 31, 2026, 2025, and 2024, respectively, and were recorded in SG&A

expenses in the consolidated statements of comprehensive income. In addition, the Company may also make

discretionary profit-sharing contributions to the plan.

Non-qualified Deferred Compensation

Non-qualified Deferred Compensation. The Company sponsors an unfunded, non-qualified deferred compensation

plan (NQDC Plan) that provides certain members of its management team with the opportunity to defer

compensation into the NQDC Plan. The NQDC Plan year is from January 1st to December 31st. Participants may

defer up to 50% of their annual base salary and up to 95% of any cash incentive bonus under the NQDC Plan. The

Company may utilize a trust as an informal reserve for the benefits payable under the NQDC Plan, though assets

remain subject to claims of general creditors. The Company primarily funds its obligations under the NQDC Plan

through corporate-owned life insurance. Deferred compensation is recognized based on the fair value of the

participants’ accounts.

Self-Insurance

Self-Insurance. The Company is self-insured for a significant portion of its employee medical, including pharmacy,

and dental liability exposures. Liabilities for self-insured exposures are accrued for the amounts expected to be paid

based on historical claims experience and actuarial data for forecasted settlements of claims filed and for incurred

but not yet reported claims. Accruals for self-insured exposures are included in accrued payroll in the consolidated

balance sheets. Excess liability insurance has been purchased to limit the amount of self-insured risk on claims.

Income Taxes

Income Taxes. Income taxes are accounted for under the asset and liability method. Deferred tax assets and

liabilities are recognized for the future tax consequences attributable to net operating loss carryforwards and

temporary differences between the financial statement carrying amounts of existing assets and liabilities and their

respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to

taxable income during the years in which those temporary differences are expected to be recovered or settled. The

effect on deferred taxes of a change in tax rates is recorded in the consolidated statements of comprehensive

income in the period that includes the enactment date.

The Company recognizes the effect of income tax positions in the consolidated financial statements only if those

positions are more likely than not to be sustained upon examination. Recognized income tax positions are

measured at the largest amount of tax benefit that is more than 50% likely to be realized upon settlement. Changes

in recognition or measurement are recorded in the period in which the change in judgment occurs. The Company

records interest and penalties accrued for income tax contingencies as interest expense in the consolidated

statements of comprehensive income.

Comprehensive Income

Comprehensive Income. Comprehensive income or loss is the total of net earnings and all other non-owner

changes in equity. Comprehensive income or loss includes net income or loss, foreign currency translation

adjustments, and unrealized gains and losses on cash flow hedges.

Net Income per Share

Net Income per Share. Basic net income or loss per share represents net income or loss divided by the weighted-

average number of common shares outstanding for the period. Diluted net income or loss per share represents net

income or loss divided by the weighted-average number of shares outstanding, including the dilutive impact of

potential issuances of common stock.Excluded Awards. The equity awards excluded from the calculation of the dilutive effect may be excluded due to

one of the following: (1) the shares were antidilutive or (2) the necessary conditions had not been satisfied for the

shares to be deemed issuable based on the Company’s performance for the relevant performance period. The

number of shares stated for each of these excluded awards is the maximum number of shares issuable pursuant to

these awards. For those awards subject to the achievement of performance criteria, the actual number of shares to

be issued pursuant to such awards will be based on Company performance in future periods, net of forfeitures, and

may be materially lower than the number of shares presented, which could result in a lower dilutive effect.

Fair Value Measurement

The accounting standard for fair value measurements provides a framework for measuring fair value, which is

defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in

the principal or most advantageous market in an orderly transaction between market participants on the

measurement date. The fair value hierarchy under this accounting standard requires an entity to maximize the use

of observable inputs, where available.

The following summarizes the three levels of inputs required:

•Level 1: Quoted prices in active markets for identical assets and liabilities.

•Level 2: Observable inputs other than quoted prices in active markets for identical assets and

liabilities.

•Level 3: Unobservable inputs in which little or no market activity exists, therefore requiring the

Company to develop its own assumptions.

The carrying amount of the Company’s financial instruments, which principally include cash and cash equivalents,

trade accounts receivable, net, trade accounts payable, accrued payroll, and other accrued expenses, approximates

fair value due to their short-term nature. When the Company makes short-term borrowings, the carrying amounts,

which are considered Level 2 liabilities, approximate fair value based upon current rates and terms available to the

Company for similar debt. The Company does not currently have any Level 3 assets or liabilities.

Supplier Finance Program

The Company has a voluntary Supplier Finance Program (SFP) administered through a third-party platform that

provides the Company’s independent manufacturers that supply its inventory (inventory suppliers) the opportunity to

sell their receivables due from the Company to participating financial institutions in advance of the invoice due date,

at the sole discretion of both inventory suppliers and the financial institutions The Company is not party to the

agreements between these third parties and has no economic interest in an inventory suppliers’ decision to sell a

receivable.

The Company’s payment obligations, including the amounts due and payment terms, which generally do not exceed

90 days, are not impacted by the inventory suppliers’ election to participate in the SFP, and the Company provides

no guarantees to any third parties under the SFP. Accordingly, amounts due to inventory suppliers that elect to

participate in the SFP are recorded in trade accounts payable in the consolidated balance sheets.