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REPORTABLE OPERATING SEGMENTS
 3 Months Ended
Jun. 30, 2025
Segment Reporting [Abstract]  
REPORTABLE OPERATING SEGMENTS REPORTABLE OPERATING SEGMENTS
Information reported to the Chief Operating Decision Maker (CODM), who is the Principal Executive Officer (PEO), 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 Company does not regularly provide total assets or capital expenditures information by reportable operating segments to the CODM because that information is not used to evaluate performance or allocate resources to each reportable operating segment.
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; depreciation and other related costs; and other segment items. There are no inter-segment sales for any period presented. The accounting policies of the Company’s reportable operating segments are consistent with those described in Note 1, “General,” in the Company’s consolidated financial statements in Part IV of the 2025 Annual Report.
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 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 3PL service fees, along with enterprise costs, which include centralized commercial operations, IT, finance, human resources, legal, supply chain, and corporate executives.
Reportable operating segment information, with a reconciliation to the condensed consolidated statements of comprehensive income, was as follows:
Three Months Ended June 30, 2025HOKAUGG
Other Brands
Total
Net sales$653,119$265,092$46,327$964,538
Less: Cost of sales (1)
276,172125,76824,692426,632
Segment gross profit376,947139,32421,635537,906
Segment gross margin57.7 %52.6 %46.7 %55.8 %
Less: (1)
Payroll and related costs28,508 32,865 4,532 65,905 
Advertising, marketing, and promotion expenses55,988 19,568 6,208 81,764 
Rent and occupancy9,046 17,217 38 26,301 
Depreciation and other related costs (2)
1,473 2,957 39 4,469 
Other segment items (3)
28,404 12,734 3,065 44,203 
Segment SG&A expenses
123,419 85,341 13,882 222,642 
Segment income from operations$253,528 $53,983 $7,753 $315,264 
Segment operating margin (4)
38.8 %20.4 %16.7 %32.7 %
Three Months Ended June 30, 2024HOKAUGG
Other Brands
Total
Net sales$545,178$222,951$57,218$825,347
Less: Cost of sales (1)
221,513103,69230,142355,347
Segment gross profit323,665119,25927,076470,000
Segment gross margin59.4 %53.5 %47.3 %56.9 %
Less: (1)
Payroll and related costs20,729 28,420 4,194 53,343 
Advertising, marketing, and promotion expenses45,303 15,860 7,323 68,486 
Rent and occupancy5,767 15,186 189 21,142 
Depreciation and other related costs (2)
1,055 2,404 308 3,767 
Other segment items (3)
19,893 11,503 2,376 33,772 
Segment SG&A expenses
92,747 73,373 14,390 180,510 
Segment income from operations$230,918 $45,886 $12,686 $289,490 
Segment operating margin (4)
42.4 %20.6 %22.2 %35.1 %
(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
(2) Depreciation and other related costs generally includes depreciation of property and equipment, amortization and impairment of intangible assets or other long-lived assets, accretion, and loss on disposal of assets.
(3) Other segment items are comprised of other SG&A expenses, which primarily include IT expenses, certain 3PL service fees, contract service fees, travel, materials and supplies, credit card fees, and commissions.
(4) Operating margin is defined as income from operations divided by net sales.
A reconciliation of reportable segment income from operations to condensed consolidated statements of comprehensive income was as follows:
Three Months Ended June 30,
20252024
Segment income from operations
$315,264 $289,490 
Unallocated enterprise and shared brand expenses (1)
(149,977)(156,683)
Total other income, net17,779 16,346 
Consolidated income before income taxes
$183,066 $149,153 
(1) The change in reportable operating segments had an impact on segment income from operations, a measure of segment profitability, and a clarification was made that certain prior unallocated overhead costs are defined as unallocated enterprise and shared brand expenses and are excluded from the measure of segment profitability.