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Annual Report 2012

www.deckers.com

Live in luxurious comfort

Innovative outdoor footwear inspiring adventure on water and trails

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13MAR200814173367

Dear Shareholders: Great brands endure through periods of great success, and great brands endure through periods of adversity. While 2012 certainly had its challenges, our brands remain as important and relevant to the consumer as ever, continuing to gain traction within their target markets while our global presence was strengthened through strategic investments in marketing, product development, and our direct to consumer platforms. To be clear, 2012 was not without its setbacks. The second of two consecutive years dubbed the warmest on record, increasingly difficult macroeconomic conditions in Europe and record high product costs tested our strengths in many ways. But the fundamentals of our business remain strong and recent brand surveys indicate that consumer sentiment towards the UGG brand is higher than ever. With the consumer on our side, we repurchased 4,513,884 shares of our common stock this year, underscoring our confidence in the long-term opportunity for Deckers and its promising portfolio of brands. Our Brands The UGG brand remains one of the most recognized and relevant comfort shoe brands in the industry. In 2012, we continued to elevate the brand’s status both domestically and overseas with compelling new product introductions and more integrated marketing programs, including an increased digital presence, as well as massive growth in our social media engagement. This also included telling the story of our growing men’s line to a broader audience. Anchored by our partnership with Tom Brady, combined with the successful opening of our first men’s only store, we believe this business can one day represent twenty percent of UGG’s overall revenue. That said, in 2012, we experienced slower than expected initial sell through on our twin-face sheepskin...