Deckers Outdoor's

The casual, outdoor, athletic, fashion and formal footwear markets are highly competitive. Our competitors include athletic and footwear companies, branded apparel companies, and retailers with their own private labels. Although the footwear industry is fragmented to a certain degree, many of our competitors are larger and have substantially greater resources than us, including athletic shoe companies, several of which compete directly with some of our products. In addition, access to offshore manufacturing has made it easier for new companies to enter the markets in which we compete, further increasing competition in the footwear and accessory industries. In particular, in part due to the popularity of our UGG products, we face increasing competition from a significant number of domestic and international competitors selling products designed to compete directly or indirectly with our UGG products.

We believe that our ability to successfully compete depends on our ability to:

predict and respond to changing consumer preferences and tastes in a timely manner;

produce products that appeal to consumers;

produce products that meet our requirements and consumer expectations for quality;

accurately predict and forecast consumer demand;

ensure product availability;

manage the impact of seasonality, including unexpected changes in weather conditions;

maintain brand loyalty and authenticity;

price our products in a competitive manner;

implement our Omni-Channel strategy, including providing a unique customer service experience;

implement our Business Transformation Project in a cost-effective manner; and

manage the impact on our business of the rapidly changing retail environment.

We believe we are well positioned to compete in our industry. However, we cannot ensure that we will be able to compete effectively, and competitive pressure may have a material adverse effect on our business, financial condition and results of operations.