{ "ticker": "DECK", "company": "DECK", "filing_type": "10-K", "year_current": "2026", "year_prior": "2025", "summary": { "added": 5, "removed": 5, "modified": 21, "unchanged": 1, "total_current": 27, "total_prior": 27 }, "source": "SEC EDGAR", "url": "https://riskdiff.com/deck/2026-vs-2025/", "markdown_url": "https://riskdiff.com/deck/2026-vs-2025/index.md", "json_url": "https://riskdiff.com/deck/2026-vs-2025/index.json", "generated": "2026-06-01", "ai_summary": null, "risks": [ { "status": "ADDED", "current_title": "material adverse effect on our financial condition and results of operations.", "prior_title": null, "current_body": "Like other companies in our industry, we have an extended design and manufacturing process, which involves product design, material purchases, inventory accumulation and the subsequent sale of the inventories, and accounts receivable collection. This cycle requires us to incur significant expenses relating to the design, manufacturing, and marketing of our products in advance of the realization of sales, and results in significant liquidity requirements and working capital fluctuations throughout our fiscal year, which may be amplified by supplier performance issues and broader supply chain constraints. As a result, these liquidity and working capital demands may limit our ability to adjust inventory levels and respond efficiently to changes in consumer demand, particularly during periods of macroeconomic uncertainty. Our forecasting processes rely on assumptions, data, and systems that may not accurately reflect future consumer or customer demand, or supply chain conditions, including manufacturing capacity, raw material availability, and logistics constraints. Further, variability and constraints within our global supply chain may drive higher inventory procurement positions that could negatively affect our working capital and gross margin as a result of selling excess quantities through close out channels. As a result, our inventory levels, working capital requirements, and results of operations may be adversely affected by a number of factors, including: •constraints or inefficiencies in transportation capacity, delivery timing, inventory flow, or production scheduling, which may contribute to uneven inventory receipts, elevated inventory levels, or delays in fulfilling demand; •unfavorable or unexpected weather patterns that affect consumer demand for seasonally-driven products, particularly within our UGG brand, which may be intensified by the effects of climate change; •changes in consumer preferences, discretionary spending patterns, prevailing fashion trends, and pricing pressure that may require increased promotional activity to sell inventory; •macroeconomic conditions, including inflation, interest rate volatility, or global economic uncertainty, that may affect consumer purchasing behavior, supplier capacity, or logistics costs; and •market acceptance of our products and competing offerings, and variability in product availability. The evolution and expansion of our brands and product offerings have made our inventory management activities more challenging. For example, if we overestimate demand for any products or styles, we may be forced to increase promotional activity or adjust pricing to sell excess inventories, which would result in lower sales and reduced gross margin, and we may not be able to recover our investment in the development of new styles and product lines. On the other hand, if we underestimate demand, or if our independent manufacturing facilities are unable to supply Table of Contents 15products in sufficient quantities or on a timely basis, we may experience inventory shortages that may prevent us from fulfilling customer orders or result in delays in shipments to customers. If that occurred, we could lose sales, our relationships with customers could be harmed, and our brand loyalty could be diminished. In either event, these factors could have a material adverse effect on our results of operations.We rely upon a number of warehouse and distribution facilities to operate our business, and any damage to one of these facilities, or any disruptions caused by incorporating new facilities into our operations, could have a material adverse effect on our business.We rely upon a broad network of warehouses and distribution facilities to store, sort, package and distribute our products. Our distribution operations depend on the effective functioning of global transportation and logistics networks, including ports, carriers, and third-party service providers. Disruptions to these networks, including labor shortages or disputes, capacity constraints, fuel and freight cost volatility, routing inefficiencies, or infrastructure limitations could increase delivery times, delay inbound or outbound shipments, strain distribution capacity, increase fulfillment and other costs, and impair our ability to efficiently receive, store, and distribute products. In the US, we distribute products primarily through self-managed warehouses and DCs in Moreno Valley, California, and in Mooresville, Indiana, which feature a complex warehouse management system that enables us to efficiently pack products for direct shipment to our customers and consumers. We could face a significant disruption in our domestic warehouse and DC operations if our warehouse management system does not perform as anticipated or ceases to function for an extended period of time, which could occur due to damage to the facility, failure of software or equipment, cyber-security incidents, power outages or similar problems. Any significant disruption to our domestic warehouse or DC operations could adversely affect our ability to fulfill customer orders. In addition, increased reliance on automation, data analytics, and system integrations within our warehouse operations, including to address outdated or no longer supported software, systems and equipment, may increase the risk of system failures, data inaccuracies, or operational disruptions if such systems are not implemented or maintained effectively, which could similarly have a material adverse effect on our business.Internationally, we distribute our products through warehouses and DCs managed by 3PLs in certain international locations. For example, we are currently transitioning certain international 3PL operations to a new partner. While we conduct diligence prior to entering into service agreements with 3PLs, we depend on these providers to operate their warehouses and DCs in a manner that meets our business and performance requirements, including with respect to data security and compliance with applicable data protection and privacy laws, and the provision of quality services on a timely basis at the prices we expect. If our 3PLs fail to manage these responsibilities, including during or following an operational transition, system cutover, or data migration, or if their operations are disrupted as a result of factors outside of their control, such as sanctions that could in the future be imposed by the US government, or broader disruptions or inefficiencies in global logistics and transportation networks, our distribution operations could face delays, reduced reliability, or increased costs. The loss of or disruption to the operations of any one or more of these facilities could materially and adversely affect our sales, business performance, and results of operations. Although we believe we possess adequate insurance to cover the potential effect of a disruption to the operations of these facilities, such insurance may not be sufficient to cover all of our potential losses and may not continue to be available to us on acceptable terms, or at all. We rely upon independent manufacturers for all of our production needs, and the failure of these manufacturers to manage these responsibilities would prevent us from filling customer orders, which would result in loss of sales and harm our relationships with customers.We rely upon independent manufacturers and their respective material suppliers for all of our production needs, the majority of which are located in Southeast Asia, predominantly in Vietnam and Indonesia, which exposes us to geographic concentration risk, including risks arising from regional economic, political, environmental, or operational conditions, and we do not have direct control over these manufacturers or their suppliers. We expect our independent manufacturers to finance the production of goods ordered, maintain manufacturing capacity, comply with our policies, and store finished goods in a safe location pending shipment. The ability of our independent manufacturers to meet these expectations may be adversely affected by liquidity constraints or limitations in their access to third-party financing arrangements supporting their supply chains or working capital needs, which could reduce available production capacity, delay shipments, or result in lost sales. Disruptions arising from these geographic concentrations, our limited control over independent manufacturers and their suppliers, or our manufacturers’ inability to meet these expectations could adversely affect our ability to manufacture products or fulfill customer orders, which could negatively affect our results of operations. Table of Contents 15 Table of Contents 15 Table of Contents 15 products in sufficient quantities or on a timely basis, we may experience inventory shortages that may prevent us from fulfilling customer orders or result in delays in shipments to customers. If that occurred, we could lose sales, our relationships with customers could be harmed, and our brand loyalty could be diminished. In either event, these factors could have a material adverse effect on our results of operations.We rely upon a number of warehouse and distribution facilities to operate our business, and any damage to one of these facilities, or any disruptions caused by incorporating new facilities into our operations, could have a material adverse effect on our business.We rely upon a broad network of warehouses and distribution facilities to store, sort, package and distribute our products. Our distribution operations depend on the effective functioning of global transportation and logistics networks, including ports, carriers, and third-party service providers. Disruptions to these networks, including labor shortages or disputes, capacity constraints, fuel and freight cost volatility, routing inefficiencies, or infrastructure limitations could increase delivery times, delay inbound or outbound shipments, strain distribution capacity, increase fulfillment and other costs, and impair our ability to efficiently receive, store, and distribute products. In the US, we distribute products primarily through self-managed warehouses and DCs in Moreno Valley, California, and in Mooresville, Indiana, which feature a complex warehouse management system that enables us to efficiently pack products for direct shipment to our customers and consumers. We could face a significant disruption in our domestic warehouse and DC operations if our warehouse management system does not perform as anticipated or ceases to function for an extended period of time, which could occur due to damage to the facility, failure of software or equipment, cyber-security incidents, power outages or similar problems. Any significant disruption to our domestic warehouse or DC operations could adversely affect our ability to fulfill customer orders. In addition, increased reliance on automation, data analytics, and system integrations within our warehouse operations, including to address outdated or no longer supported software, systems and equipment, may increase the risk of system failures, data inaccuracies, or operational disruptions if such systems are not implemented or maintained effectively, which could similarly have a material adverse effect on our business.Internationally, we distribute our products through warehouses and DCs managed by 3PLs in certain international locations. For example, we are currently transitioning certain international 3PL operations to a new partner. While we conduct diligence prior to entering into service agreements with 3PLs, we depend on these providers to operate their warehouses and DCs in a manner that meets our business and performance requirements, including with respect to data security and compliance with applicable data protection and privacy laws, and the provision of quality services on a timely basis at the prices we expect. If our 3PLs fail to manage these responsibilities, including during or following an operational transition, system cutover, or data migration, or if their operations are disrupted as a result of factors outside of their control, such as sanctions that could in the future be imposed by the US government, or broader disruptions or inefficiencies in global logistics and transportation networks, our distribution operations could face delays, reduced reliability, or increased costs. The loss of or disruption to the operations of any one or more of these facilities could materially and adversely affect our sales, business performance, and results of operations. Although we believe we possess adequate insurance to cover the potential effect of a disruption to the operations of these facilities, such insurance may not be sufficient to cover all of our potential losses and may not continue to be available to us on acceptable terms, or at all. We rely upon independent manufacturers for all of our production needs, and the failure of these manufacturers to manage these responsibilities would prevent us from filling customer orders, which would result in loss of sales and harm our relationships with customers.We rely upon independent manufacturers and their respective material suppliers for all of our production needs, the majority of which are located in Southeast Asia, predominantly in Vietnam and Indonesia, which exposes us to geographic concentration risk, including risks arising from regional economic, political, environmental, or operational conditions, and we do not have direct control over these manufacturers or their suppliers. We expect our independent manufacturers to finance the production of goods ordered, maintain manufacturing capacity, comply with our policies, and store finished goods in a safe location pending shipment. The ability of our independent manufacturers to meet these expectations may be adversely affected by liquidity constraints or limitations in their access to third-party financing arrangements supporting their supply chains or working capital needs, which could reduce available production capacity, delay shipments, or result in lost sales. Disruptions arising from these geographic concentrations, our limited control over independent manufacturers and their suppliers, or our manufacturers’ inability to meet these expectations could adversely affect our ability to manufacture products or fulfill customer orders, which could negatively affect our results of operations. products in sufficient quantities or on a timely basis, we may experience inventory shortages that may prevent us from fulfilling customer orders or result in delays in shipments to customers. If that occurred, we could lose sales, our relationships with customers could be harmed, and our brand loyalty could be diminished. In either event, these factors could have a material adverse effect on our results of operations." }, { "status": "ADDED", "current_title": "adversely affected.", "prior_title": null, "current_body": "As part of our overall growth strategy, we seek to enhance the positioning of our brands, diversify our product offerings, extend our brands into complementary product categories and markets, expand geographically, and optimize our retail presence both in stores and online. Our future growth depends in part on our expansion efforts outside of the United States (international growth strategy). For example, we have opened UGG brand and HOKA brand retail locations in international markets through Company-owned stores and through third-party retailers. If we are unable to identify new retail locations with consumer traffic sufficient to support a profitable sales level or elevate our brand market positioning, our retail growth may be limited, and we may be unable to avoid losses or negative cash flows from these locations. In addition, investments in new or expanded retail locations may not generate expected returns and could result in impairments or reduced profitability. Furthermore, our future growth depends in part on our ability to effectively manage the profitability of our existing retail locations. For example, our failure to successfully identify and close underperforming stores in a timely manner could have a number of material adverse effects, such as impairments and a negative impact on our financial condition and results of operations. We also license the right to operate our brand retail stores to third parties through our partner retail program. All of the partner retail stores are operated in international markets. We provide training to support these stores and set and monitor operational standards. However, the quality of these store operations may decline due to the failure of these third parties to operate the stores in a manner consistent with our standards or our failure to adequately monitor these third parties, which could result in reduced sales and harm our brand image. As part of our international growth strategy, we may transition certain brands in certain geographies from a third- party distribution model to a direct distribution model or vice versa. Failure to effectively implement our growth strategies, including transitioning between distribution models or developing our business in international markets, or disappointing growth within existing markets, could negatively affect our sales growth rate. In addition, taking steps to implement our growth strategies could have a number of negative effects, including increasing our working capital needs, causing us to incur costs without corresponding benefits, and diverting management time and resources away from our existing business. Our growth initiatives may not be successful, may take longer than anticipated to achieve expected results, or may expose us to operational complexities that we are unable to effectively manage. Table of Contents 19Increasing expectations from investors, regulators, and other key stakeholders with respect to our ESG practices may impose additional costs on us or expose us to additional risks.Investors, advocacy groups, customers, consumers, employees, regulators, and other stakeholders are increasingly scrutinizing companies’ ESG practices and disclosures, including the social and environmental impacts of their operations. We periodically communicate ESG initiatives, including through our annual Creating Change Report and may face heightened scrutiny, regulatory inquiries, or litigation regarding the accuracy, completeness, or consistency of such disclosures, including allegations of “greenwashing.” Our ESG disclosures address a broad range of topics, including human rights, governance, environmental compliance, sustainability, human capital management, supply chain practices, and diversity and inclusion. Despite our efforts, our ESG practices, the pace at which we implement related initiatives, or our disclosures may not meet evolving stakeholder expectations. Perceptions regarding our ESG priorities, whether viewed as over- or under-emphasized, could adversely affect customer demand, employee recruitment and retention, or investor relations, or lead to reputational harm, regulatory action, or litigation. In addition, developing ESG goals, metrics, and data collection processes is complex, costly, and subject to evolving standards, internal controls, and regulatory regimes, including ESG-related disclosure requirements of the SEC, European, and other regulators, such as those in California. Failure, or perceived failure, to achieve or accurately report progress against our ESG initiatives or adapt to changing regulatory requirements could increase compliance costs, damage our reputation, and negatively affect our business and results of operations. Climate change, natural disasters, public health issues, or other events beyond our control, as well as related regulations, have adversely affected, and could in the future adversely affect, our business. Natural disasters and other catastrophic events, including those associated with climate change and extreme weather conditions, may disrupt our operations, supply chain, international markets, and the global economy. Our business is subject to interruption from events such as extreme weather, power shortages, pandemics, war, political instability, terrorism, and failures of infrastructure or communications systems. Although we maintain disaster and business continuity plans designed to support critical operations and information systems, these events could disrupt our operations, impair employee availability, damage facilities, interrupt supply chains, or compromise the integrity of our IT systems, which could materially increase costs, reduce sales, or otherwise adversely affect our business continuity. In addition, climate-related regulatory developments and evolving standards may require us to incur significant capital expenditures or other costs to enhance the resiliency of our infrastructure, comply with legal requirements, or implement mitigation measures. We may also experience increased costs for energy, transportation, raw materials, production, and insurance, including higher premiums or deductibles. Our insurance coverage may not be sufficient to cover all losses or may not remain available on acceptable terms. Further, severe weather events, health crises, or other widespread disruptions may reduce consumer demand, impair the ability of our manufacturers, third-party distributors, or other partners to operate effectively, or disrupt the supply of key raw materials, any of which could adversely affect our results of operations.We face risks associated with strategic acquisitions and divestitures, and our failure to successfully integrate any acquired business could have a material adverse effect on our results of operations and financial condition.As part of our overall strategy, we may periodically consider strategic acquisitions to expand our brands into complementary product categories and markets, or to acquire new brands, technologies, intellectual property, or other assets. Our ability to do so depends on our ability to identify and successfully pursue suitable acquisition opportunities. Such acquisitions involve numerous risks, challenges, and uncertainties, including the potential to: •expose us to risks inherent in entering into new markets or geographic regions; •lose significant customers or key personnel of the acquired business; •encounter difficulties integrating and managing acquired assets;•encounter difficulties marketing to new consumers or managing geographically dispersed operations;•divert management’s time and attention away from other aspects of our business operations; and •incur costs relating to potential acquisitions that we fail to consummate, which we may not recover. Table of Contents 19 Table of Contents 19 Table of Contents 19 Increasing expectations from investors, regulators, and other key stakeholders with respect to our ESG practices may impose additional costs on us or expose us to additional risks.Investors, advocacy groups, customers, consumers, employees, regulators, and other stakeholders are increasingly scrutinizing companies’ ESG practices and disclosures, including the social and environmental impacts of their operations. We periodically communicate ESG initiatives, including through our annual Creating Change Report and may face heightened scrutiny, regulatory inquiries, or litigation regarding the accuracy, completeness, or consistency of such disclosures, including allegations of “greenwashing.” Our ESG disclosures address a broad range of topics, including human rights, governance, environmental compliance, sustainability, human capital management, supply chain practices, and diversity and inclusion. Despite our efforts, our ESG practices, the pace at which we implement related initiatives, or our disclosures may not meet evolving stakeholder expectations. Perceptions regarding our ESG priorities, whether viewed as over- or under-emphasized, could adversely affect customer demand, employee recruitment and retention, or investor relations, or lead to reputational harm, regulatory action, or litigation. In addition, developing ESG goals, metrics, and data collection processes is complex, costly, and subject to evolving standards, internal controls, and regulatory regimes, including ESG-related disclosure requirements of the SEC, European, and other regulators, such as those in California. Failure, or perceived failure, to achieve or accurately report progress against our ESG initiatives or adapt to changing regulatory requirements could increase compliance costs, damage our reputation, and negatively affect our business and results of operations. Climate change, natural disasters, public health issues, or other events beyond our control, as well as related regulations, have adversely affected, and could in the future adversely affect, our business. Natural disasters and other catastrophic events, including those associated with climate change and extreme weather conditions, may disrupt our operations, supply chain, international markets, and the global economy. Our business is subject to interruption from events such as extreme weather, power shortages, pandemics, war, political instability, terrorism, and failures of infrastructure or communications systems. Although we maintain disaster and business continuity plans designed to support critical operations and information systems, these events could disrupt our operations, impair employee availability, damage facilities, interrupt supply chains, or compromise the integrity of our IT systems, which could materially increase costs, reduce sales, or otherwise adversely affect our business continuity. In addition, climate-related regulatory developments and evolving standards may require us to incur significant capital expenditures or other costs to enhance the resiliency of our infrastructure, comply with legal requirements, or implement mitigation measures. We may also experience increased costs for energy, transportation, raw materials, production, and insurance, including higher premiums or deductibles. Our insurance coverage may not be sufficient to cover all losses or may not remain available on acceptable terms. Further, severe weather events, health crises, or other widespread disruptions may reduce consumer demand, impair the ability of our manufacturers, third-party distributors, or other partners to operate effectively, or disrupt the supply of key raw materials, any of which could adversely affect our results of operations.We face risks associated with strategic acquisitions and divestitures, and our failure to successfully integrate any acquired business could have a material adverse effect on our results of operations and financial condition.As part of our overall strategy, we may periodically consider strategic acquisitions to expand our brands into complementary product categories and markets, or to acquire new brands, technologies, intellectual property, or other assets. Our ability to do so depends on our ability to identify and successfully pursue suitable acquisition opportunities. Such acquisitions involve numerous risks, challenges, and uncertainties, including the potential to: •expose us to risks inherent in entering into new markets or geographic regions; •lose significant customers or key personnel of the acquired business; •encounter difficulties integrating and managing acquired assets;•encounter difficulties marketing to new consumers or managing geographically dispersed operations;•divert management’s time and attention away from other aspects of our business operations; and •incur costs relating to potential acquisitions that we fail to consummate, which we may not recover." }, { "status": "ADDED", "current_title": "our liabilities and harm our reputation or our business.", "prior_title": null, "current_body": "There are a number of laws protecting the privacy and security of personal information, as well as increased scrutiny by regulators, such as the Federal Trade Commission, and state attorneys general focused on our industry. Such laws include the California Consumer Privacy Act and California Privacy Rights Act, the EU’s General Data Protection Regulation and member state directives, Canada’s Personal Information Protection and Electronic Documents Act, and China’s Personal Information Protection Law, and limit how we may collect, use, share and store personal information, and they impose obligations to protect that information. We may also be subject to new or evolving data privacy and security laws and regulations. If we, or any of our service providers who have access to the personal data for which we are responsible, are found to be in violation of the privacy or security requirements of applicable data protection laws, we could be subject to civil or criminal penalties, which could increase our liabilities, harm our reputation, and have a material adverse effect on our business, financial condition, and results of operations. In addition, these laws may provide for private rights of action, statutory damages, or enhanced regulatory enforcement, which could increase our exposure to litigation and liability. Although we utilize a variety of Table of Contents 23measures to secure the data that we control, even compliant entities can experience security breaches or have inadvertent failures despite employing reasonable practices and safeguards.If the technology-based systems that give our customers the ability to shop or interact with us online do not function effectively, our results of operations, as well as our ability to grow our e-commerce websites globally or to retain our customer base, could be materially and adversely affected.Many consumers shop with us through Company-owned e-commerce websites and third-party digital marketplaces, where expectations and competitive pressures, including delivery speed, shipping costs, return policies, and mobile functionality, continue to increase. Consumers increasingly use mobile platforms, social media, and digital channels to shop, comparison shop, and engage with brands, and we rely on these channels to attract and retain customers. Our success may depend on the continued effectiveness of third‑party digital platforms and marketplaces, which may change algorithms, policies, fee structures, data access, or content moderation practices, including through increased use of AI‑driven tools, in ways that reduce traffic, increase customer acquisition costs, or otherwise diminish the effectiveness of our marketing and sales efforts. These platforms may also become subject to regulatory actions that limit our ability to operate on them or require costly operational or technological changes. Failure to provide effective, reliable, secure, and user-friendly digital platforms that offer competitive delivery options and meet evolving consumer expectations or to scale our technical infrastructure to support increased demand, could disrupt operations, reduce sales, harm our reputation, and adversely affect our results of operations. Additional risks include channel conflict with Company-owned and third-party brick and mortar stores, challenges in replicating the in-store experience online, and liability for online content.If we are unsuccessful at improving our operational and IT systems and our efforts do not result in the anticipated benefits to us or result in unanticipated disruption to our business, our results of operations could be adversely affected.We continually strive to improve and automate our operational and IT systems and processes to enhance the efficiency and competitiveness of our business. Transitioning to these new or upgraded processes and systems requires significant capital investments and personnel resources. Implementation is also highly dependent on the coordination of numerous employees, contractors and software and system providers. While these efforts have resulted in improvements to our operational systems, we expect to continue to incur expenses to implement additional improvements and upgrades to our systems. Many of these expenditures have been and may continue to be incurred in advance of realizing any direct benefits to our business. Moreover, our investments in operational and IT systems may not generate the expected return on investment or may take longer than anticipated to deliver benefits. We cannot guarantee that we will be successful in improving our operational systems, adapting to changes in technology, including the effective use of data analytics, and other emerging technologies, or that these efforts will result in anticipated benefits. We may also experience difficulties in implementing or operating our new or upgraded operational or IT systems, including ineffective or inefficient operations, significant system failures, outages, delayed implementation and loss of system availability, which could lead to increased implementation and operational costs, loss or corruption of data, delayed shipments, excess inventory and interruptions of operations resulting in lost sales or profits. If our operational or IT system upgrades, improvements and associated implementation efforts are not successful, our financial condition and results of operations could be adversely affected, and our business may become less competitive.Risks related to our use of artificial intelligence technologies could adversely affect our business, reputation, results of operations, or financial condition.We and our third-party service providers are increasingly using AI, data analytics, and machine learning technologies across our business, including operational and IT systems, digital platforms, and certain business processes. While these technologies may improve efficiency and decision-making, they may not perform as intended and may produce inaccurate, incomplete, or otherwise unreliable outputs, including due to deficiencies in the data used to develop or operate such tools.Our use of AI, and the use of AI by third parties on which we rely, may introduce additional risks related to the integrity, security, and governance of data used by such technologies, including the potential for unauthorized use, processing, or exposure of sensitive information in ways that may not be fully addressed by our existing data protection controls, as well as operational disruptions resulting from reliance on AI-driven outputs or systems that do not perform as intended. In addition, the use of AI technologies in the creation or development of content, designs, or other intellectual property may present uncertainty regarding ownership, copyright-ability, or potential infringement of third-party intellectual property rights. The legal and regulatory landscape governing AI is rapidly Table of Contents 23 Table of Contents 23 Table of Contents 23 measures to secure the data that we control, even compliant entities can experience security breaches or have inadvertent failures despite employing reasonable practices and safeguards.If the technology-based systems that give our customers the ability to shop or interact with us online do not function effectively, our results of operations, as well as our ability to grow our e-commerce websites globally or to retain our customer base, could be materially and adversely affected.Many consumers shop with us through Company-owned e-commerce websites and third-party digital marketplaces, where expectations and competitive pressures, including delivery speed, shipping costs, return policies, and mobile functionality, continue to increase. Consumers increasingly use mobile platforms, social media, and digital channels to shop, comparison shop, and engage with brands, and we rely on these channels to attract and retain customers. Our success may depend on the continued effectiveness of third‑party digital platforms and marketplaces, which may change algorithms, policies, fee structures, data access, or content moderation practices, including through increased use of AI‑driven tools, in ways that reduce traffic, increase customer acquisition costs, or otherwise diminish the effectiveness of our marketing and sales efforts. These platforms may also become subject to regulatory actions that limit our ability to operate on them or require costly operational or technological changes. Failure to provide effective, reliable, secure, and user-friendly digital platforms that offer competitive delivery options and meet evolving consumer expectations or to scale our technical infrastructure to support increased demand, could disrupt operations, reduce sales, harm our reputation, and adversely affect our results of operations. Additional risks include channel conflict with Company-owned and third-party brick and mortar stores, challenges in replicating the in-store experience online, and liability for online content.If we are unsuccessful at improving our operational and IT systems and our efforts do not result in the anticipated benefits to us or result in unanticipated disruption to our business, our results of operations could be adversely affected.We continually strive to improve and automate our operational and IT systems and processes to enhance the efficiency and competitiveness of our business. Transitioning to these new or upgraded processes and systems requires significant capital investments and personnel resources. Implementation is also highly dependent on the coordination of numerous employees, contractors and software and system providers. While these efforts have resulted in improvements to our operational systems, we expect to continue to incur expenses to implement additional improvements and upgrades to our systems. Many of these expenditures have been and may continue to be incurred in advance of realizing any direct benefits to our business. Moreover, our investments in operational and IT systems may not generate the expected return on investment or may take longer than anticipated to deliver benefits. We cannot guarantee that we will be successful in improving our operational systems, adapting to changes in technology, including the effective use of data analytics, and other emerging technologies, or that these efforts will result in anticipated benefits. We may also experience difficulties in implementing or operating our new or upgraded operational or IT systems, including ineffective or inefficient operations, significant system failures, outages, delayed implementation and loss of system availability, which could lead to increased implementation and operational costs, loss or corruption of data, delayed shipments, excess inventory and interruptions of operations resulting in lost sales or profits. If our operational or IT system upgrades, improvements and associated implementation efforts are not successful, our financial condition and results of operations could be adversely affected, and our business may become less competitive.Risks related to our use of artificial intelligence technologies could adversely affect our business, reputation, results of operations, or financial condition.We and our third-party service providers are increasingly using AI, data analytics, and machine learning technologies across our business, including operational and IT systems, digital platforms, and certain business processes. While these technologies may improve efficiency and decision-making, they may not perform as intended and may produce inaccurate, incomplete, or otherwise unreliable outputs, including due to deficiencies in the data used to develop or operate such tools.Our use of AI, and the use of AI by third parties on which we rely, may introduce additional risks related to the integrity, security, and governance of data used by such technologies, including the potential for unauthorized use, processing, or exposure of sensitive information in ways that may not be fully addressed by our existing data protection controls, as well as operational disruptions resulting from reliance on AI-driven outputs or systems that do not perform as intended. In addition, the use of AI technologies in the creation or development of content, designs, or other intellectual property may present uncertainty regarding ownership, copyright-ability, or potential infringement of third-party intellectual property rights. The legal and regulatory landscape governing AI is rapidly measures to secure the data that we control, even compliant entities can experience security breaches or have inadvertent failures despite employing reasonable practices and safeguards." }, { "status": "ADDED", "current_title": "globally or to retain our customer base, could be materially and adversely affected.", "prior_title": null, "current_body": "Many consumers shop with us through Company-owned e-commerce websites and third-party digital marketplaces, where expectations and competitive pressures, including delivery speed, shipping costs, return policies, and mobile functionality, continue to increase. Consumers increasingly use mobile platforms, social media, and digital channels to shop, comparison shop, and engage with brands, and we rely on these channels to attract and retain customers. Our success may depend on the continued effectiveness of third‑party digital platforms and marketplaces, which may change algorithms, policies, fee structures, data access, or content moderation practices, including through increased use of AI‑driven tools, in ways that reduce traffic, increase customer acquisition costs, or otherwise diminish the effectiveness of our marketing and sales efforts. These platforms may also become subject to regulatory actions that limit our ability to operate on them or require costly operational or technological changes. Failure to provide effective, reliable, secure, and user-friendly digital platforms that offer competitive delivery options and meet evolving consumer expectations or to scale our technical infrastructure to support increased demand, could disrupt operations, reduce sales, harm our reputation, and adversely affect our results of operations. Additional risks include channel conflict with Company-owned and third-party brick and mortar stores, challenges in replicating the in-store experience online, and liability for online content." }, { "status": "ADDED", "current_title": "reputation, results of operations, or financial condition.", "prior_title": null, "current_body": "We and our third-party service providers are increasingly using AI, data analytics, and machine learning technologies across our business, including operational and IT systems, digital platforms, and certain business processes. While these technologies may improve efficiency and decision-making, they may not perform as intended and may produce inaccurate, incomplete, or otherwise unreliable outputs, including due to deficiencies in the data used to develop or operate such tools. Our use of AI, and the use of AI by third parties on which we rely, may introduce additional risks related to the integrity, security, and governance of data used by such technologies, including the potential for unauthorized use, processing, or exposure of sensitive information in ways that may not be fully addressed by our existing data protection controls, as well as operational disruptions resulting from reliance on AI-driven outputs or systems that do not perform as intended. In addition, the use of AI technologies in the creation or development of content, designs, or other intellectual property may present uncertainty regarding ownership, copyright-ability, or potential infringement of third-party intellectual property rights. The legal and regulatory landscape governing AI is rapidly Table of Contents 24evolving, and compliance with new or changing requirements may require additional resources or operational changes. If we are unable to effectively manage these risks, our business and results of operations could be materially and adversely affected.Risks Related to Our Legal, Compliance, and Regulatory EnvironmentFailure to adequately protect our intellectual property rights could reduce sales and adversely affect the value of our brands.Our business could be significantly harmed if we are not able to protect our intellectual property rights. We believe our competitive position is attributable to the value of our trademarks, patents, trade dress, trade names, trade secrets, copyrights, and other intellectual property rights. As a result of the success of our brands, we have become a target of counterfeiting and product imitation. Although we actively pursue legal and other actions against those who infringe on our intellectual property rights, we cannot guarantee that these actions will be adequate to protect our brands in the future, particularly because some countries’ laws do not protect these rights to the same extent as US laws. If we fail to adequately protect our intellectual property rights, it may allow competitors to sell products that are similar to and directly competitive with our products, or we could lose opportunities to sell our products to consumers who instead purchase counterfeit or imitation products, which could reduce sales of our products and adversely affect the value of our brands. In addition, any intellectual property lawsuits in which we are involved could require significant time and expense and distract management’s attention from operating our business, which may negatively affect our business and results of operations. In addition to enforcing our intellectual property rights, we may need to defend claims against us related to our intellectual property rights. For example, we have faced claims that the word “ugg” is a generic term. Such a claim was successful in Australia, but similar claims have been rejected by courts in the US, China, the Republic of Türkiye, and the Netherlands. Any court decision or settlement that invalidates or limits trademark protection of our brands, which allows a third-party to continue to sell products similar to our products or to sell counterfeit products, could lead to intensified competition and a reduction in our sales and adversely affect the value of our brands.Our revolving credit facility agreements expose us to certain risks.From time to time, we have financed our liquidity needs in part through borrowings under revolving credit facilities. We may be unable to renew, extend, or replace our revolving credit facilities on acceptable terms, or at all, when they mature, which could reduce our available liquidity. Our ability to borrow under our revolving credit facilities may be limited if the lenders believe there has been a material adverse change to our business. In addition, our revolving credit facility agreements contain a number of customary financial covenants and restrictions, which may limit our ability to engage in transactions that would otherwise be in our best interests, or otherwise respond to changing business and economic conditions, and may therefore have a material effect on our business. Failure to comply with any of these covenants could result in a default, allowing our lenders to accelerate the timing of payments, which could have a material adverse effect on our business, operations, financial condition, and liquidity. In addition, in some cases, a default under one revolving credit facility could result in a cross-default under other facilities. Certain of our revolving credit facility agreements bear interest at a rate that varies by currency. Any increases in interest rates applicable to our borrowings would increase our cost of borrowing, which would reduce our net income and liquidity. The tax laws applicable to our business are complex, and changes in tax laws or audits by taxing authorities could increase our worldwide tax rate and may subject us to additional tax liabilities, which may materially affect our financial position and results of operations.Changes in global tax laws, regulations, and treaties could materially affect our business. These tax laws require significant judgment and specialized expertise to evaluate and estimate our worldwide provision for income taxes. Changes in these tax laws (and our interpretation thereof), could result in a materially higher tax expense or a higher effective tax rate on our worldwide earnings. For example, global tax authorities may take differing positions in interpreting the Organization for Economic Co-operation and Development’s (commonly known as OECD) guidance, including with respect to Pillar Two model rules, which could modify existing tax principles and increase our tax liabilities; in addition, the enactment of H.R. 1, also known as the One Big Beautiful Bill Act, or similar future legislation, may also affect applicable tax rules and interpretations. These changes and potential other tax law changes could increase our income tax liability or adversely affect our long-term effective tax rates and net income. Refer to Note 5, “Income Taxes,” of our consolidated financial statements in Part IV within this Annual Report for further information regarding tax law changes. Table of Contents 24 Table of Contents 24 Table of Contents 24 evolving, and compliance with new or changing requirements may require additional resources or operational changes. If we are unable to effectively manage these risks, our business and results of operations could be materially and adversely affected.Risks Related to Our Legal, Compliance, and Regulatory EnvironmentFailure to adequately protect our intellectual property rights could reduce sales and adversely affect the value of our brands.Our business could be significantly harmed if we are not able to protect our intellectual property rights. We believe our competitive position is attributable to the value of our trademarks, patents, trade dress, trade names, trade secrets, copyrights, and other intellectual property rights. As a result of the success of our brands, we have become a target of counterfeiting and product imitation. Although we actively pursue legal and other actions against those who infringe on our intellectual property rights, we cannot guarantee that these actions will be adequate to protect our brands in the future, particularly because some countries’ laws do not protect these rights to the same extent as US laws. If we fail to adequately protect our intellectual property rights, it may allow competitors to sell products that are similar to and directly competitive with our products, or we could lose opportunities to sell our products to consumers who instead purchase counterfeit or imitation products, which could reduce sales of our products and adversely affect the value of our brands. In addition, any intellectual property lawsuits in which we are involved could require significant time and expense and distract management’s attention from operating our business, which may negatively affect our business and results of operations. In addition to enforcing our intellectual property rights, we may need to defend claims against us related to our intellectual property rights. For example, we have faced claims that the word “ugg” is a generic term. Such a claim was successful in Australia, but similar claims have been rejected by courts in the US, China, the Republic of Türkiye, and the Netherlands. Any court decision or settlement that invalidates or limits trademark protection of our brands, which allows a third-party to continue to sell products similar to our products or to sell counterfeit products, could lead to intensified competition and a reduction in our sales and adversely affect the value of our brands.Our revolving credit facility agreements expose us to certain risks.From time to time, we have financed our liquidity needs in part through borrowings under revolving credit facilities. We may be unable to renew, extend, or replace our revolving credit facilities on acceptable terms, or at all, when they mature, which could reduce our available liquidity. Our ability to borrow under our revolving credit facilities may be limited if the lenders believe there has been a material adverse change to our business. In addition, our revolving credit facility agreements contain a number of customary financial covenants and restrictions, which may limit our ability to engage in transactions that would otherwise be in our best interests, or otherwise respond to changing business and economic conditions, and may therefore have a material effect on our business. Failure to comply with any of these covenants could result in a default, allowing our lenders to accelerate the timing of payments, which could have a material adverse effect on our business, operations, financial condition, and liquidity. In addition, in some cases, a default under one revolving credit facility could result in a cross-default under other facilities. Certain of our revolving credit facility agreements bear interest at a rate that varies by currency. Any increases in interest rates applicable to our borrowings would increase our cost of borrowing, which would reduce our net income and liquidity. The tax laws applicable to our business are complex, and changes in tax laws or audits by taxing authorities could increase our worldwide tax rate and may subject us to additional tax liabilities, which may materially affect our financial position and results of operations.Changes in global tax laws, regulations, and treaties could materially affect our business. These tax laws require significant judgment and specialized expertise to evaluate and estimate our worldwide provision for income taxes. Changes in these tax laws (and our interpretation thereof), could result in a materially higher tax expense or a higher effective tax rate on our worldwide earnings. For example, global tax authorities may take differing positions in interpreting the Organization for Economic Co-operation and Development’s (commonly known as OECD) guidance, including with respect to Pillar Two model rules, which could modify existing tax principles and increase our tax liabilities; in addition, the enactment of H.R. 1, also known as the One Big Beautiful Bill Act, or similar future legislation, may also affect applicable tax rules and interpretations. These changes and potential other tax law changes could increase our income tax liability or adversely affect our long-term effective tax rates and net income. Refer to Note 5, “Income Taxes,” of our consolidated financial statements in Part IV within this Annual Report for further information regarding tax law changes. evolving, and compliance with new or changing requirements may require additional resources or operational changes. If we are unable to effectively manage these risks, our business and results of operations could be materially and adversely affected." }, { "status": "REMOVED", "current_title": null, "prior_title": "We face intense competition from both established companies and newer entrants into the market, and our failure to compete effectively could cause our market share to decline, which could harm our reputation and have a material adverse effect on our financial condition and results of operations.", "prior_body": "The footwear, apparel, and accessories industry is highly competitive and subject to changing consumer preferences and tastes. Our inability to compete effectively could cause our market share to decline, which could harm our reputation and have a material adverse effect on our financial condition and results of operations. Our competitors include both established companies and newer entrants into the market. In particular, we believe that, as a result of the growth of the UGG and HOKA brands, competitors have entered the marketplace specifically in response to the success of our brands, and other competitors may do so in the future, particularly as access to offshore manufacturing and changes in technology make it easier and more cost effective to compete. A number of our larger competitors have significantly greater financial, technological, engineering, manufacturing, marketing, and distribution resources than we do, as well as greater brand awareness in the footwear, apparel, and accessories markets among consumers. As a result, we have faced, and expect to continue to face, intense pressure with respect to competition for key customer accounts and distribution channels. These competitors may have relationships with our key retail customers that are more important to those customers because of the significantly larger volume and product mix that our competitors sell to them. Our competitors’ greater resources may enable them to more effectively compete on the basis of price and production, develop new products more quickly or with superior technical capabilities, adapt to changes in technology, including the successful utilization of data analytics, artificial intelligence, and machine learning, market their products and brands more successfully, identify or influence consumer preferences, increase their market share, withstand the effects of seasonality, and manage periodic downturns in the footwear, apparel, and accessories industry or in economic conditions. As a result of these pressures, we have faced, and expect to continue to face, intense pricing pressure. Efforts by our competitors to dispose of excess inventories may significantly reduce prices of competitive products, which may pressure us to reduce the pricing of our products to compete, or cause consumers to shift their purchasing decisions away from our products entirely. Further, we believe that our key customers face intense competition from their competitors, which could negatively affect the financial stability of their businesses and their ability to conduct business with us." }, { "status": "REMOVED", "current_title": null, "prior_title": "We use sheepskin to manufacture a significant portion of our products, and if we are unable to obtain sufficient sheepskin at acceptable prices that meets our quality expectations, or if there are legal or social impediments to our ability to use sheepskin, it could have a material adverse effect on our business.", "prior_body": "We purchase certain raw materials that are affected by commodity prices, the most significant of which is sheepskin. The supply of sheepskin, which is used to manufacture a significant portion of our UGG brand products, is in high demand and there are limited suppliers that are able to provide the quantity and quality of sheepskin that we require. In addition, our unique product design and animal welfare standards require sheepskin that may be found only in certain geographies. Sheepskin used in our UGG brand products is sourced primarily from designated suppliers in Australia and processed by two tanneries in China. If this sheepskin and the resulting products we produce do not conform to our quality or sustainability specifications or fail to meet consumer expectations, we could experience reduced demand for our products, a higher rate of customer returns, and negative effects on the image of our brands, any of which could have a material adverse effect on our business. Similarly, if these tanneries are not able to deliver sheepskin in the quantities required, or were to cease operations, we may not be able to timely obtain suitable substitute materials, which would limit our ability to meet demand for our products, lead to inventory shortages, result in a loss of sales, strain our customer relationships, and harm our reputation. In addition, any factors that negatively affect the business of these tanneries, or the businesses of the suppliers that warehouse their inventories, such as loss of customers, financial instability, loss or destruction of property, work stoppages, political instability, or acts of terrorism or catastrophic events, could result in shortages in our supply of sheepskin. While we have experienced stable pricing in recent years, fluctuations in the price of sheepskin could occur as a result of any factors that increase the demand for, or decrease the supply of, sheepskin, including weather 16 16 16 Table of Contents Table of Contents patterns, supply conditions, energy prices, work stoppages, increased logistics costs, government regulation, sanctions and policy, market speculation, compliance with our standards, harvesting decisions, incidence of disease, the price of other commodities, such as wool and leather, the demand for our products and the products of our competitors, and global economic conditions, any of which would increase our manufacturing costs and reduce our gross margin. The impacts of any of these factors may be exacerbated by global climate change. While we use purchasing contracts and other pricing arrangements to reduce the effect of sheepskin price fluctuations on our results of operations, we may be unable to offset the negative effect of a prolonged increase in such prices on our results of operations. In that event, it is unlikely we will be able to adjust our product prices sufficiently to eliminate the effect on our gross margin and our financial results may suffer. In addition, our industry is characterized by rapidly changing fashion trends and consumer preferences, and we believe there is a growing trend to eliminate the use of certain animal products, most notably fur, in footwear, apparel, and accessories. For example, the sale of fur is banned in certain US cities, and similar legislation is being considered in other geographies. While the use of leather and sheepskin has typically not been subject to these restrictions, it is possible that future legislation could restrict our ability to use sheepskin in the products we sell in certain geographies. In addition, notwithstanding whether specific legislation is passed, it is possible that consumer preferences may change based on evolving ethical or social standards, such that our products may potentially become less desirable to certain consumers. Because sheepskin is used to manufacture a significant portion of our UGG brand products, any legal or social impediments to the sale of sheepskin products, especially within our large target markets, could have a material adverse effect on our business, financial condition, and results of operations." }, { "status": "REMOVED", "current_title": null, "prior_title": "Supply chain disruptions could interrupt product manufacturing and global logistics and increase product and transportation costs.", "prior_body": "Our business depends on our ability to source and distribute products in a timely manner. We continue to proactively mitigate any effects of future disruptions by expanding and reallocating production capacity with our existing sourcing partners and onboarding new long-term partners to diversify our country-level manufacturing and sourcing lines. We plan to continue growing our distribution network to support our long-term strategic objectives but have experienced and may continue to experience headwinds in connection with these efforts. Failure to adequately produce and timely ship our products to customers could lead to lost potential revenue, failure to meet consumer demand, strained relationships with customers and diminished brand loyalty. Port congestion, temporary closures, vessel availability and reliability, worker shortages, government-imposed restrictions, such as border closures and shipment restrictions, as well as trade policy changes, may disrupt the operations of our independent manufacturers and 3PLs, as well as those of our warehouses and DCs, and may increase the global lead-time for shipments of our products. For example, certain tariffs from Canada could change shipment routing of product to our Mooresville, Indiana warehouses and DCs, which would increase lead times and impact our ability to timely fulfill orders from that facility. In addition, geopolitical conflicts have and could in the future bring about disruption, and volatility in global markets, supply chains, and logistics, which could in turn adversely affect our business operations and financial performance. Elevated inventory levels, combined with the uneven flow of receipts and shipments, could cause further capacity pressures within our US warehouses and DCs and international 3PLs. These pressures may be exacerbated by labor disputes that affect our partners, which create significant risk for our business, particularly if such disputes result in work slowdowns, strikes, or other disruptions. As we manage product availability from disruptions, the timing of sales to our wholesale partners and consumers may be affected, which may result in an increased risk of order cancellations. In addition, while we have historically used more expensive air freight to ship our products to meet demand, we continued to reduce our use of air freight into fiscal year 2025. However, if we experience fluctuations in consumer demand or product availability and costs in future periods, we may be required to leverage air freight to maintain service levels." }, { "status": "REMOVED", "current_title": null, "prior_title": "We conduct business outside the US, which exposes us to foreign currency exchange rate risk, and could have a negative effect on our financial results.", "prior_body": "We operate on a global basis, with 36.1% of our total net sales for the year ended March 31, 2025, generated from operations outside the US. As we continue to expand our international operations, our sales and expenditures in foreign currencies are expected to become increasingly material and subject to foreign currency exchange rate fluctuations. A significant portion of our international operating expenses are paid in local currencies and our foreign distributors typically sell our products in local currency, which affects the price to foreign consumers. Many of our subsidiaries operate with their local currency as their functional currency. Future foreign currency exchange rate fluctuations and global credit markets may cause changes in the US dollar value of our purchases or sales and materially affect our sales, gross margin, and results of operations, when converted to US dollars. Changes in the value of the US dollar, relative to other currencies, could result in material foreign currency exchange rate fluctuations and, as a result, our net earnings could be materially adversely affected. When the US dollar strengthens relative to foreign currencies, our revenues and profits denominated in foreign currencies are reduced when converted into US dollars and our margins may be negatively affected. We routinely utilize foreign currency exchange rate forward contracts or other derivative instruments for the amounts we expect to purchase and sell in foreign currencies to mitigate exposure to foreign currency exchange rate fluctuations. As we continue to expand international operations and increase purchases and sales in foreign currencies, we may utilize additional derivative instruments to hedge our foreign currency exchange rate risk. Our hedging strategies depend on our forecasts of sales, expenses, and cash flows, which are inherently subject to inaccuracies. Foreign currency exchange rate hedges, transactions, remeasurements, or translations could materially affect our consolidated financial statements." }, { "status": "REMOVED", "current_title": null, "prior_title": "If the technology-based systems that give our customers the ability to shop or interact with us online do not function effectively, our results of operations, as well as our ability to grow our e-commerce websites globally or to retain our customer base, could be materially adversely affected.", "prior_body": "Many of our consumers shop with us through our Company-owned e-commerce websites or through third-party digital marketplaces. Consumer expectations and competitive pressures, including speed of product delivery, shipping charges, return privileges, and other evolving expectations, have increased and are expected to continue to increase. Consumers are increasingly using mobile platforms to shop with us and with our competitors, to do comparison shopping, and to engage with us and our competitors. We are increasingly using social media to interact with our consumers and as a means to enhance their shopping experience. Any failure on our part to provide effective, reliable, secure, user-friendly e-commerce websites that offer a wide assortment of merchandise with rapid delivery options and that continually meet the changing expectations of consumers could place us at a competitive disadvantage, result in the loss of e-commerce and other sales, harm our reputation, have an adverse 23 23 23 Table of Contents Table of Contents effect on the growth of our e-commerce websites and have an adverse effect on our business and results of operations. In addition, as use of our digital platforms grows, we will need an increasing amount of technical infrastructure. If we fail to effectively scale and adapt our digital platforms to accommodate increased consumer demand, our business may be subject to interruptions, delays or failures and consumer demand for our products and digital experiences could decline. Risks specific to our Company-owned e-commerce websites also include diversion of sales from our Company-owned retail stores and our retailers’ brick and mortar stores, difficulty in recreating the in-store experience through direct channels and liability for online content. Our failure to successfully respond to these risks could adversely affect e-commerce sales, as well as damage our reputation and brands." }, { "status": "MODIFIED", "current_title": "value of our brands.", "prior_title": "Failure to adequately protect our intellectual property rights could reduce sales and adversely affect the value of our brands.", "similarity_score": 0.882, "confidence": "high", "key_changes": [ "Reworded sentence: \"As a result of the success of our brands, we have become a target of counterfeiting and product imitation.\"", "Reworded sentence: \"Such a claim was successful in Australia, but similar claims have been rejected by courts in the US, China, the Republic of Türkiye, and the Netherlands.\"" ], "current_body": "Our business could be significantly harmed if we are not able to protect our intellectual property rights. We believe our competitive position is attributable to the value of our trademarks, patents, trade dress, trade names, trade secrets, copyrights, and other intellectual property rights. As a result of the success of our brands, we have become a target of counterfeiting and product imitation. Although we actively pursue legal and other actions against those who infringe on our intellectual property rights, we cannot guarantee that these actions will be adequate to protect our brands in the future, particularly because some countries’ laws do not protect these rights to the same extent as US laws. If we fail to adequately protect our intellectual property rights, it may allow competitors to sell products that are similar to and directly competitive with our products, or we could lose opportunities to sell our products to consumers who instead purchase counterfeit or imitation products, which could reduce sales of our products and adversely affect the value of our brands. In addition, any intellectual property lawsuits in which we are involved could require significant time and expense and distract management’s attention from operating our business, which may negatively affect our business and results of operations. In addition to enforcing our intellectual property rights, we may need to defend claims against us related to our intellectual property rights. For example, we have faced claims that the word “ugg” is a generic term. Such a claim was successful in Australia, but similar claims have been rejected by courts in the US, China, the Republic of Türkiye, and the Netherlands. Any court decision or settlement that invalidates or limits trademark protection of our brands, which allows a third-party to continue to sell products similar to our products or to sell counterfeit products, could lead to intensified competition and a reduction in our sales and adversely affect the value of our brands.", "prior_body": "Our business could be significantly harmed if we are not able to protect our intellectual property rights. We believe our competitive position is attributable to the value of our trademarks, patents, trade dress, trade names, trade secrets, copyrights, and other intellectual property rights. An unfortunate reaction to the success of our brands is that we have become a target of counterfeiting and product imitation strategies. Although we are aggressive in legal and other actions in pursuing those who infringe on our intellectual property rights, we cannot guarantee that the actions we have taken will be adequate to protect our brands in the future, especially because some countries’ laws do not protect these rights to the same extent as US laws. If we fail to adequately protect our intellectual property rights, it will allow our competitors to sell products that are similar to and directly competitive with our products, or we could otherwise lose opportunities to sell our products to consumers who may instead purchase a counterfeit or imitation product, which could reduce sales of our products and adversely affect the value of our brands. In addition, any intellectual property lawsuits in which we are involved could cost a significant amount of time and money and distract management’s attention from operating our business, which may negatively affect our business and results of operations. In addition to fighting intellectual property infringement, we may need to defend claims against us related to our intellectual property rights. For example, we have faced claims that the word “ugg” is a generic term. Such a claim was successful in Australia, but similar claims have been rejected by courts in the US, China, Republic of Türkiye, and the Netherlands. Any court decision or settlement that invalidates or limits trademark protection of our brands, which allows a third-party to continue to sell products similar to our products, or that allows a manufacturer or distributor to continue to sell counterfeit products, could lead to intensified competition and a material reduction in our sales, and could have a material adverse effect on the value of our brands. 24 24 24 Table of Contents Table of Contents" }, { "status": "MODIFIED", "current_title": "Our common stock price has been volatile, which could result in losses for stockholders.", "prior_title": "Our common stock price has been volatile, which could result in substantial losses for stockholders.", "similarity_score": 0.842, "confidence": "high", "key_changes": [ "Reworded sentence: \"The trading price of our common stock could be affected by a number of factors, including: •changes in expectations regarding our future financial performance and results of operations; •changes in estimates and opinions of our performance by securities analysts and other market participants, or our failure to meet such estimates; •changes in our stockholder base or public actions taken by investors, including activism; •market research and opinions published by securities analysts and other market participants, and the response to such publications; •third-party data sources estimating our intra-quarter financial performance; •quarterly fluctuations in our sales, margins, expenses, financial condition, and results of operations; •the financial stability of our customers, manufacturers, suppliers, and competitors; •announcements made by us or our competitors regarding product launches or developments; •announcements by our competitors, or other companies in our industry, regarding changes in financial condition, results of operations or financial outlook; •legal proceedings, regulatory actions, and legislative changes impacting us, our competitors, or the industry in which we operate; •the declaration of stock or cash dividends, stock repurchases, or stock or reverse stock splits; •consumer confidence and discretionary spending levels; •broad market fluctuations in trading volume and market price of publicly traded securities; •general market, geopolitical, and macroeconomic conditions, including evolving international trade dynamics and recessionary conditions; and •trading activity in our stock by short-term or technical investors, including algorithmic trading, index funds, or other market participants whose investment decisions are not based on our fundamentals.\"", "Reworded sentence: \"These broad market and industry factors and other general macroeconomic conditions unrelated to our financial performance may also affect our common stock price, including in ways that are disproportionate to or not directly related to our operating performance.\"" ], "current_body": "The trading price of our common stock has been and may continue to be volatile. The trading price of our common stock could be affected by a number of factors, including: •changes in expectations regarding our future financial performance and results of operations; •changes in estimates and opinions of our performance by securities analysts and other market participants, or our failure to meet such estimates; •changes in our stockholder base or public actions taken by investors, including activism; •market research and opinions published by securities analysts and other market participants, and the response to such publications; •third-party data sources estimating our intra-quarter financial performance; •quarterly fluctuations in our sales, margins, expenses, financial condition, and results of operations; •the financial stability of our customers, manufacturers, suppliers, and competitors; •announcements made by us or our competitors regarding product launches or developments; •announcements by our competitors, or other companies in our industry, regarding changes in financial condition, results of operations or financial outlook; •legal proceedings, regulatory actions, and legislative changes impacting us, our competitors, or the industry in which we operate; •the declaration of stock or cash dividends, stock repurchases, or stock or reverse stock splits; •consumer confidence and discretionary spending levels; •broad market fluctuations in trading volume and market price of publicly traded securities; •general market, geopolitical, and macroeconomic conditions, including evolving international trade dynamics and recessionary conditions; and •trading activity in our stock by short-term or technical investors, including algorithmic trading, index funds, or other market participants whose investment decisions are not based on our fundamentals. In addition, the stock market in general has experienced extreme price and volume fluctuations. Accordingly, the price of our common stock is volatile and any investment in our stock is subject to risk of loss. These broad market and industry factors and other general macroeconomic conditions unrelated to our financial performance may also affect our common stock price, including in ways that are disproportionate to or not directly related to our operating performance.", "prior_body": "The trading price of our common stock has been and may continue to be volatile. The trading price of our common stock could be affected by a number of factors, including, but not limited to the following: •changes in expectations regarding our future financial performance and results of operations; •changes in estimates of our performance by securities analysts and other market participants, or our failure to meet such estimates; •changes in our stockholder base or public actions taken by investors; •market research and opinions published by securities analysts and other market participants, and the response to such publications; 25 25 25 Table of Contents Table of Contents •third-party data sources estimating our intra-quarter financial performance; •quarterly fluctuations in our sales, margins, expenses, financial position, and results of operations; •the financial stability of our customers, manufacturers, and suppliers; •legal proceedings, regulatory actions, and legislative changes; •the declaration of stock or cash dividends, share repurchases, or stock or reverse stock splits; •consumer confidence and discretionary spending levels; •broad market fluctuations in volume and price; •general market, political, and economic conditions, including evolving international trade dynamics and recessionary conditions; and •a variety of risk factors, including the ones described herein and in our other SEC filings. In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of individual companies. Accordingly, the price of our common stock is volatile and any investment in our stock is subject to risk of loss. These broad market and industry factors and other general macroeconomic conditions unrelated to our financial performance may also affect our common stock price." }, { "status": "MODIFIED", "current_title": "could be adversely affected.", "prior_title": "If we are unsuccessful at improving our operational and IT systems and our efforts do not result in the anticipated benefits to us or result in unanticipated disruption to our business, our financial condition and results of operations could be adversely affected, and our business may become less competitive.", "similarity_score": 0.746, "confidence": "medium", "key_changes": [ "Reworded sentence: \"We continually strive to improve and automate our operational and IT systems and processes to enhance the efficiency and competitiveness of our business.\"", "Reworded sentence: \"Many of these expenditures have been and may continue to be incurred in advance of realizing any direct benefits to our business.\"" ], "current_body": "We continually strive to improve and automate our operational and IT systems and processes to enhance the efficiency and competitiveness of our business. Transitioning to these new or upgraded processes and systems requires significant capital investments and personnel resources. Implementation is also highly dependent on the coordination of numerous employees, contractors and software and system providers. While these efforts have resulted in improvements to our operational systems, we expect to continue to incur expenses to implement additional improvements and upgrades to our systems. Many of these expenditures have been and may continue to be incurred in advance of realizing any direct benefits to our business. Moreover, our investments in operational and IT systems may not generate the expected return on investment or may take longer than anticipated to deliver benefits. We cannot guarantee that we will be successful in improving our operational systems, adapting to changes in technology, including the effective use of data analytics, and other emerging technologies, or that these efforts will result in anticipated benefits. We may also experience difficulties in implementing or operating our new or upgraded operational or IT systems, including ineffective or inefficient operations, significant system failures, outages, delayed implementation and loss of system availability, which could lead to increased implementation and operational costs, loss or corruption of data, delayed shipments, excess inventory and interruptions of operations resulting in lost sales or profits. If our operational or IT system upgrades, improvements and associated implementation efforts are not successful, our financial condition and results of operations could be adversely affected, and our business may become less competitive.", "prior_body": "We continually strive to improve and automate our operational and IT systems and processes as part of our ongoing effort to improve the overall efficiency and competitiveness of our business. Transitioning to these new or upgraded processes and systems requires significant capital investments and personnel resources. Implementation is also highly dependent on the coordination of numerous employees, contractors and software and system providers. While these efforts have resulted in improvements to our operational systems, we expect to continue to incur expenses to implement additional improvements and upgrades to our systems. Many of these expenditures have been and may continue to be incurred in advance of the realization of any direct benefits to our business. We cannot guarantee that we will be successful at improving our operational systems, adapting to changes in technology, including the successful utilization of data analytics, AI, and machine learning, or that our efforts will result in the anticipated benefits to us. In addition, the integration of emerging technologies, including data analytics, AI, and machine learning, into our systems and processes may require us to address rapidly developing laws and regulations governing AI. We may also experience difficulties in implementing or operating our new or upgraded operational or IT systems, including, but not limited to, ineffective or inefficient operations, significant system failures, system outages, delayed implementation and loss of system availability, which could lead to increased implementation and/or operational costs, loss or corruption of data, delayed shipments, excess inventory and interruptions of operations resulting in lost sales and/or profits. If our operational or IT system upgrades, improvements and associated implementation efforts are not successful, our financial condition and results of operations could be adversely affected, and our business may become less competitive." }, { "status": "MODIFIED", "current_title": "effect on our business.", "prior_title": "We may not succeed in implementing our growth strategies, in which case we may not be able to take advantage of certain market opportunities and may become less competitive.", "similarity_score": 0.707, "confidence": "medium", "key_changes": [ "Reworded sentence: \"We purchase raw materials and components that are subject to supplier and geographic concentration, most significantly sheepskin, which is used in a substantial portion of our UGG brand products.\"", "Reworded sentence: \"For example, our failure to successfully identify and close underperforming stores in a timely manner could have a number of material adverse effects, such as impairments and a negative impact on our financial condition and results of operations.We also license the right to operate our brand retail stores to third parties through our partner retail program.\"", "Reworded sentence: \"However, the quality of these store operations may decline due to the failure of these third parties to operate the stores in a manner consistent with our standards or our failure to adequately monitor these third parties, which could result in reduced sales and harm our brand image.\"" ], "current_body": "We purchase raw materials and components that are subject to supplier and geographic concentration, most significantly sheepskin, which is used in a substantial portion of our UGG brand products. Sheepskin is in high demand and sourced primarily from Australia and processed largely by two tanneries in China capable of meeting our quality, volume, and animal welfare standards. This geographic and supplier concentration exposes us to supply disruption risk. We also rely on designated suppliers for certain other specialized raw materials, including sugarcane-derived EVA, used in certain components of our products. If suppliers of sheepskin, including tanneries involved in its processing, sugarcane-derived EVA, or other materials are unable to meet our quality, sustainability, or volume requirements, or if their operations are disrupted or cease, we may not be able to obtain adequate quantities of these materials or suitable substitutes on acceptable terms, or at all. Although alternative materials may be available for certain branded components, which may be limited, such alternatives would not include the same trademarks. As a result, supply disruptions could require product redesign or delayed production, increase costs, reduce inventory availability, result in loss of sales or increased returns, and harm our reputation. In addition, the raw materials used in the manufacturing of our products are subject to commodity price volatility, most significantly sheepskin. Although sheepskin pricing has been relatively stable in recent years, prices and availability may fluctuate due to changes in supply and demand, weather conditions, energy and logistics costs, labor disruptions, regulatory developments, disease incidence, the effects of climate change, and broader market dynamics. While we use contracts and other pricing arrangements to mitigate price volatility, prolonged increases in sheepskin costs or other key inputs could increase manufacturing expenses and negatively impact our gross margin, and we may be unable to offset such increases through pricing actions or changes in product mix. Evolving fashion trends, social expectations, and ethical considerations, including increased opposition to the use of animal-derived materials, as well as existing or potential legislation restricting the sale of such products in certain jurisdictions, could also reduce consumer demand for sheepskin products or limit our ability to sell them in key markets. Because sheepskin is integral to the UGG brand, adverse changes in consumer preferences, regulatory requirements, or sourcing standards applicable to sheepskin could have a material adverse effect on our business, financial condition, and results of operations. Table of Contents 18We rely on technical innovation to compete in the market for our products, and if we fail to innovate effectively or in a timely manner, our competitive position and results of operations could be adversely affected.Our success relies in part on our continued innovation in both the materials we use and the design of our footwear. In particular, our HOKA brand maintains its competitiveness through continuous product innovation and timely introduction of new features and technologies that align with current and emerging consumer expectations, including our ability to bring such innovations to market ahead of or in line with competitors. Also, we continue to invest in research and development to increasingly incorporate recycled, renewable, regenerated, and certified/natural materials (preferred materials) in our products as part of our sustainability efforts. We also increasingly use preferred synthetics, regenerated or synthetic cellulosic fibers, and plant fibers. Although we continue to refine our materials and develop new properties for specific applications, if we fail to introduce technical innovation in our products in a timely or commercially successful manner, or experience issues with the quality of our products or materials, consumer demand for our products could decline and we may experience reputational damage. In addition, if our competitors introduce superior or more cost-effective innovations, we may lose market share or be required to increase promotional activity to remain competitive. Further, as our brands transition to suppliers with preferred materials, we may be subject to increased costs or supply constraints, which could reduce our sales and profitability and have a material adverse effect on our financial condition and results of operations. Our investments in research and development and new materials may not result in commercially successful products or may not generate the expected return on investment, which could adversely affect our results of operations.We may not succeed in implementing our growth strategies, in which case we may not be able to take advantage of certain market opportunities and our competitive position and results of operations could be adversely affected.As part of our overall growth strategy, we seek to enhance the positioning of our brands, diversify our product offerings, extend our brands into complementary product categories and markets, expand geographically, and optimize our retail presence both in stores and online. Our future growth depends in part on our expansion efforts outside of the United States (international growth strategy). For example, we have opened UGG brand and HOKA brand retail locations in international markets through Company-owned stores and through third-party retailers. If we are unable to identify new retail locations with consumer traffic sufficient to support a profitable sales level or elevate our brand market positioning, our retail growth may be limited, and we may be unable to avoid losses or negative cash flows from these locations. In addition, investments in new or expanded retail locations may not generate expected returns and could result in impairments or reduced profitability. Furthermore, our future growth depends in part on our ability to effectively manage the profitability of our existing retail locations. For example, our failure to successfully identify and close underperforming stores in a timely manner could have a number of material adverse effects, such as impairments and a negative impact on our financial condition and results of operations.We also license the right to operate our brand retail stores to third parties through our partner retail program. All of the partner retail stores are operated in international markets. We provide training to support these stores and set and monitor operational standards. However, the quality of these store operations may decline due to the failure of these third parties to operate the stores in a manner consistent with our standards or our failure to adequately monitor these third parties, which could result in reduced sales and harm our brand image. As part of our international growth strategy, we may transition certain brands in certain geographies from a third-party distribution model to a direct distribution model or vice versa. Failure to effectively implement our growth strategies, including transitioning between distribution models or developing our business in international markets, or disappointing growth within existing markets, could negatively affect our sales growth rate. In addition, taking steps to implement our growth strategies could have a number of negative effects, including increasing our working capital needs, causing us to incur costs without corresponding benefits, and diverting management time and resources away from our existing business. Our growth initiatives may not be successful, may take longer than anticipated to achieve expected results, or may expose us to operational complexities that we are unable to effectively manage. Table of Contents 18 Table of Contents 18 Table of Contents 18 We rely on technical innovation to compete in the market for our products, and if we fail to innovate effectively or in a timely manner, our competitive position and results of operations could be adversely affected.Our success relies in part on our continued innovation in both the materials we use and the design of our footwear. In particular, our HOKA brand maintains its competitiveness through continuous product innovation and timely introduction of new features and technologies that align with current and emerging consumer expectations, including our ability to bring such innovations to market ahead of or in line with competitors. Also, we continue to invest in research and development to increasingly incorporate recycled, renewable, regenerated, and certified/natural materials (preferred materials) in our products as part of our sustainability efforts. We also increasingly use preferred synthetics, regenerated or synthetic cellulosic fibers, and plant fibers. Although we continue to refine our materials and develop new properties for specific applications, if we fail to introduce technical innovation in our products in a timely or commercially successful manner, or experience issues with the quality of our products or materials, consumer demand for our products could decline and we may experience reputational damage. In addition, if our competitors introduce superior or more cost-effective innovations, we may lose market share or be required to increase promotional activity to remain competitive. Further, as our brands transition to suppliers with preferred materials, we may be subject to increased costs or supply constraints, which could reduce our sales and profitability and have a material adverse effect on our financial condition and results of operations. Our investments in research and development and new materials may not result in commercially successful products or may not generate the expected return on investment, which could adversely affect our results of operations.We may not succeed in implementing our growth strategies, in which case we may not be able to take advantage of certain market opportunities and our competitive position and results of operations could be adversely affected.As part of our overall growth strategy, we seek to enhance the positioning of our brands, diversify our product offerings, extend our brands into complementary product categories and markets, expand geographically, and optimize our retail presence both in stores and online. Our future growth depends in part on our expansion efforts outside of the United States (international growth strategy). For example, we have opened UGG brand and HOKA brand retail locations in international markets through Company-owned stores and through third-party retailers. If we are unable to identify new retail locations with consumer traffic sufficient to support a profitable sales level or elevate our brand market positioning, our retail growth may be limited, and we may be unable to avoid losses or negative cash flows from these locations. In addition, investments in new or expanded retail locations may not generate expected returns and could result in impairments or reduced profitability. Furthermore, our future growth depends in part on our ability to effectively manage the profitability of our existing retail locations. For example, our failure to successfully identify and close underperforming stores in a timely manner could have a number of material adverse effects, such as impairments and a negative impact on our financial condition and results of operations.We also license the right to operate our brand retail stores to third parties through our partner retail program. All of the partner retail stores are operated in international markets. We provide training to support these stores and set and monitor operational standards. However, the quality of these store operations may decline due to the failure of these third parties to operate the stores in a manner consistent with our standards or our failure to adequately monitor these third parties, which could result in reduced sales and harm our brand image. As part of our international growth strategy, we may transition certain brands in certain geographies from a third-party distribution model to a direct distribution model or vice versa. Failure to effectively implement our growth strategies, including transitioning between distribution models or developing our business in international markets, or disappointing growth within existing markets, could negatively affect our sales growth rate. In addition, taking steps to implement our growth strategies could have a number of negative effects, including increasing our working capital needs, causing us to incur costs without corresponding benefits, and diverting management time and resources away from our existing business. Our growth initiatives may not be successful, may take longer than anticipated to achieve expected results, or may expose us to operational complexities that we are unable to effectively manage.", "prior_body": "As part of our overall growth strategy, we are continually seeking out opportunities to enhance the positioning of our brands, diversify our product offerings, extend our brands into complementary product categories and markets, expand geographically, optimize our retail presence both in stores and online, and improve our financial performance and operational efficiency. Our future growth depends in part on our expansion efforts outside of North America (international growth strategy). For example, we have opened UGG and HOKA brand retail locations in international markets through Company-owned stores and through third-party retailers. Flagship stores play a crucial role in brand market positioning, are operated to have neutral operating profitability, are typically greater in size, and involve more extensive leasehold improvements and furniture and fixtures compared to our other concept retail stores. If we are unable to identify new retail locations with consumer traffic sufficient to support a profitable sales level or elevate our brand market positioning, our retail growth may be limited, and we may be unable to avoid losses or negative cash flows. Furthermore, our future growth depends in part on our ability to effectively manage the profitability of our existing retail locations. For example, our failure to successfully identify and close underperforming stores in a timely manner could have a number of material adverse effects, such as impairments and a negative impact on our financial condition and results of operations. We also license the right to operate our brand retail stores to third parties through our partner retail program. All of the partner retail stores are operated in international markets. We provide training to support these stores and set and monitor operational standards. However, the quality of these store operations may decline due to the failure of these third parties to operate the stores in a manner consistent with our standards or our failure to adequately monitor these third parties, which could result in reduced sales and cause our brand image to suffer. 17 17 17 Table of Contents Table of Contents As part of our international growth strategy, we may transition certain brands in certain geographies from a third-party distribution model to a direct distribution model or vice versa. Failure to effectively implement our growth strategies and develop our business in new international markets, or disappointing growth within existing markets, could negatively affect our revenues and rate of growth and result in our business becoming less competitive. In addition, taking steps to implement our growth strategies could have a number of negative effects, including increasing our working capital needs, causing us to incur costs without any corresponding benefits, and diverting management time and resources away from our existing business." }, { "status": "MODIFIED", "current_title": "economic risks that may adversely affect our results of operations.", "prior_title": "Our sales in international markets are subject to a variety of legal, regulatory, political, cultural, and economic risks that may adversely affect our results of operations in certain regions.", "similarity_score": 0.694, "confidence": "medium", "key_changes": [ "Reworded sentence: \"Our ability to capitalize on growth in new international markets and to maintain the current level of operations in our existing international markets is subject to risks associated with international operations that could adversely affect our results of operations.\"" ], "current_body": "Our ability to capitalize on growth in new international markets and to maintain the current level of operations in our existing international markets is subject to risks associated with international operations that could adversely affect our results of operations. These risks include: •foreign currency exchange rate fluctuations between the US dollar and primarily the currencies of Europe, Asia, Canada, and Latin America affect the prices at which products are sold to international consumers and our reported results; •limitations on our ability to move currency out of international markets or repatriate earnings; •burdens of complying with a variety of international laws and regulations, which may change unexpectedly, and the interpretation and application of such laws and regulations; •legal costs related to defending allegations of non-compliance with international laws; •inability to import products into a foreign country; •difficulties associated with promoting and marketing products in unfamiliar markets and cultures; •political or economic uncertainty or instability, which may disrupt the global economy and reduce consumer spending, which could have a material adverse effect on our business, particularly for our HOKA and UGG brands; •anti-American sentiment in international markets in which we operate; •changes in diplomatic and trade relationships between the US and other countries; •general economic fluctuations in international markets; and •challenges associated with local laws, regulations, and business practices, including employment, tax, and data privacy requirements. Global geopolitical developments, including armed conflicts, escalating global tensions, and related disruptions, have resulted in, and could continue to result in, instability and heightened volatility in global markets.", "prior_body": "Our ability to capitalize on growth in new international markets and to maintain the current level of operation in our existing international markets is subject to risks associated with international operations that could adversely affect our sales and results of operations. These risks include: •foreign currency exchange rate fluctuations between the US dollar and primarily the currencies of Europe, Asia, Canada, and Latin America affect the prices at which products are sold to international consumers; •limitations on our ability to move currency out of international markets; •burdens of complying with a variety of foreign laws and regulations, which may change unexpectedly, and the interpretation and application of such laws and regulations; •legal costs related to defending allegations of non-compliance with foreign laws; •inability to import products into a foreign country; •supply chain logistics disruptions, such as shipping disruptions in the Red Sea; •heightened cybersecurity threats; •difficulties associated with promoting and marketing products in unfamiliar cultures; •political or economic uncertainty or instability, which has disrupted the global economy and has the potential to reduce levels of consumer spending, which could have a material adverse effect on our business, particularly our UGG and HOKA brands’ net sales; •changes in unemployment rates and consumer spending; •anti-American sentiment in international markets in which we operate; •changes in diplomatic and trade relationships between the US and other countries; and 21 21 21 Table of Contents Table of Contents •general economic fluctuations in specific countries or markets." }, { "status": "MODIFIED", "current_title": "have a material adverse effect on our business.", "prior_title": "We rely upon a number of warehouse and distribution facilities to operate our business, and any damage to one of these facilities, or any disruptions caused by incorporating new facilities into our operations, could have a material adverse effect on our business.", "similarity_score": 0.674, "confidence": "medium", "key_changes": [ "Added sentence: \"Our distribution operations depend on the effective functioning of global transportation and logistics networks, including ports, carriers, and third-party service providers.\"", "Added sentence: \"Disruptions to these networks, including labor shortages or disputes, capacity constraints, fuel and freight cost volatility, routing inefficiencies, or infrastructure limitations could increase delivery times, delay inbound or outbound shipments, strain distribution capacity, increase fulfillment and other costs, and impair our ability to efficiently receive, store, and distribute products.\"", "Removed sentence: \"We expect our recent domestic warehouse and DC expansion to create long-term capacity for the domestic growth of the UGG and HOKA brands.\"", "Reworded sentence: \"Any significant disruption to our domestic warehouse or DC operations could adversely affect our ability to fulfill customer orders.\"", "Reworded sentence: \"For example, we are currently transitioning certain international 3PL operations to a new partner.\"" ], "current_body": "We rely upon a broad network of warehouses and distribution facilities to store, sort, package and distribute our products. Our distribution operations depend on the effective functioning of global transportation and logistics networks, including ports, carriers, and third-party service providers. Disruptions to these networks, including labor shortages or disputes, capacity constraints, fuel and freight cost volatility, routing inefficiencies, or infrastructure limitations could increase delivery times, delay inbound or outbound shipments, strain distribution capacity, increase fulfillment and other costs, and impair our ability to efficiently receive, store, and distribute products. In the US, we distribute products primarily through self-managed warehouses and DCs in Moreno Valley, California, and in Mooresville, Indiana, which feature a complex warehouse management system that enables us to efficiently pack products for direct shipment to our customers and consumers. We could face a significant disruption in our domestic warehouse and DC operations if our warehouse management system does not perform as anticipated or ceases to function for an extended period of time, which could occur due to damage to the facility, failure of software or equipment, cyber-security incidents, power outages or similar problems. Any significant disruption to our domestic warehouse or DC operations could adversely affect our ability to fulfill customer orders. In addition, increased reliance on automation, data analytics, and system integrations within our warehouse operations, including to address outdated or no longer supported software, systems and equipment, may increase the risk of system failures, data inaccuracies, or operational disruptions if such systems are not implemented or maintained effectively, which could similarly have a material adverse effect on our business. Internationally, we distribute our products through warehouses and DCs managed by 3PLs in certain international locations. For example, we are currently transitioning certain international 3PL operations to a new partner. While we conduct diligence prior to entering into service agreements with 3PLs, we depend on these providers to operate their warehouses and DCs in a manner that meets our business and performance requirements, including with respect to data security and compliance with applicable data protection and privacy laws, and the provision of quality services on a timely basis at the prices we expect. If our 3PLs fail to manage these responsibilities, including during or following an operational transition, system cutover, or data migration, or if their operations are disrupted as a result of factors outside of their control, such as sanctions that could in the future be imposed by the US government, or broader disruptions or inefficiencies in global logistics and transportation networks, our distribution operations could face delays, reduced reliability, or increased costs. The loss of or disruption to the operations of any one or more of these facilities could materially and adversely affect our sales, business performance, and results of operations. Although we believe we possess adequate insurance to cover the potential effect of a disruption to the operations of these facilities, such insurance may not be sufficient to cover all of our potential losses and may not continue to be available to us on acceptable terms, or at all.", "prior_body": "We rely upon a broad network of warehouses and distribution facilities to store, sort, package and distribute our products. In the US, we distribute products primarily through self-managed warehouses and DCs in Moreno Valley, California, and in Mooresville, Indiana, which feature a complex warehouse management system that enables us to efficiently pack products for direct shipment to our customers and consumers. We expect our recent domestic warehouse and DC expansion to create long-term capacity for the domestic growth of the UGG and HOKA brands. We could face a significant disruption in our domestic warehouse and DC operations if our warehouse management system does not perform as anticipated or ceases to function for an extended period of time, which could occur due to damage to the facility, failure of software or equipment, cyber-security incidents, power outages or similar problems. In addition, if our domestic warehouse and DC operations and scaling efforts are impeded or delayed for any reason, it could result in shipment delays or the inability to deliver product at all, which would result in lost sales, strain our relationships with customers and consumers, and cause harm to our reputation, any of which could have a material adverse effect on our business. Internationally, we distribute our products through warehouses and DCs managed by 3PLs in certain international locations. For example, we are currently in the process of transitioning one of our international 3PLs to a new partner with an upgraded warehouse management system beginning in October 2025. We depend on 3PLs to manage the operation of their warehouses and DCs to meet our business needs, performance standards, and expectations, including with respect to data security, compliance with data protection and privacy laws, and provision of quality services on a timely basis at the prices we expect. While we believe we conduct appropriate diligence before entering into service agreements with 3PLs, if our 3PLs fail to manage these responsibilities, or if their operations are disrupted as a result of factors outside of their control, such as sanctions that could in the future be imposed on other countries by the US government, our distribution operations could face significant disruption. The loss of or disruption to the operations of any one or more of these facilities could materially adversely affect our sales, business performance, and results of operations. Although we believe we possess adequate insurance to cover the potential effect of a disruption to the operations of these facilities, such insurance may not be sufficient to cover all of our potential losses and may not continue to be available to us on acceptable terms, or at all. 14 14 14 Table of Contents Table of Contents" }, { "status": "MODIFIED", "current_title": "takeover attempt.", "prior_title": "Anti-takeover provisions contained in our Amended and Restated Certificate of Incorporation (Certificate) and Amended and Restated Bylaws (Bylaws), as well as provisions of Delaware law, could impair a takeover attempt.", "similarity_score": 0.664, "confidence": "medium", "key_changes": [ "Reworded sentence: \"Any provision of Delaware law, our Certificate, or our Bylaws that has the effect of rendering more difficult, delaying, deterring, or preventing a change-in-control transaction could limit the opportunity for stockholders to receive a premium for their shares of our common stock, and could affect the price that investors are willing to pay for our common stock.\"" ], "current_body": "Our Certificate and Bylaws contain provisions that could have the effect of rendering more difficult hostile takeovers, change-in-control transactions, or changes in our Board or management. As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law, which may delay, deter, or prevent a change-in-control transaction. Any provision of Delaware law, our Certificate, or our Bylaws that has the effect of rendering more difficult, delaying, deterring, or preventing a change-in-control transaction could limit the opportunity for stockholders to receive a premium for their shares of our common stock, and could affect the price that investors are willing to pay for our common stock.", "prior_body": "Our Certificate and Bylaws contain provisions that could have the effect of rendering more difficult hostile takeovers, change-in-control transactions, or changes in our Board or management. As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law, which may delay, deter, or prevent a change-in-control transaction. Any provision of Delaware law, our Certificate, or our Bylaws, which has the effect of rendering more difficult, delaying, deterring, or preventing a change-in-control transaction could limit the opportunity for stockholders to receive a premium for their shares of our common stock, and could affect the price that investors are willing to pay for our common stock." }, { "status": "MODIFIED", "current_title": "effectively or in a timely manner, our competitive position and results of operations could be adversely", "prior_title": "We rely on technical innovation to compete in the market for our products.", "similarity_score": 0.659, "confidence": "medium", "key_changes": [ "Reworded sentence: \"In particular, our HOKA brand maintains its competitiveness through continuous product innovation and timely introduction of new features and technologies that align with current and emerging consumer expectations, including our ability to bring such innovations to market ahead of or in line with competitors.\"" ], "current_body": "affected. Our success relies in part on our continued innovation in both the materials we use and the design of our footwear. In particular, our HOKA brand maintains its competitiveness through continuous product innovation and timely introduction of new features and technologies that align with current and emerging consumer expectations, including our ability to bring such innovations to market ahead of or in line with competitors. Also, we continue to invest in research and development to increasingly incorporate recycled, renewable, regenerated, and certified/ natural materials (preferred materials) in our products as part of our sustainability efforts. We also increasingly use preferred synthetics, regenerated or synthetic cellulosic fibers, and plant fibers. Although we continue to refine our materials and develop new properties for specific applications, if we fail to introduce technical innovation in our products in a timely or commercially successful manner, or experience issues with the quality of our products or materials, consumer demand for our products could decline and we may experience reputational damage. In addition, if our competitors introduce superior or more cost-effective innovations, we may lose market share or be required to increase promotional activity to remain competitive. Further, as our brands transition to suppliers with preferred materials, we may be subject to increased costs or supply constraints, which could reduce our sales and profitability and have a material adverse effect on our financial condition and results of operations. Our investments in research and development and new materials may not result in commercially successful products or may not generate the expected return on investment, which could adversely affect our results of operations.", "prior_body": "Our success relies in part on our continued innovation in both the materials we use and the design of our footwear. In particular, our HOKA brand maintains its competitiveness through continuous product innovation and timely introduction of new features and technologies that align with current and emerging consumer expectations. Also, we continue to invest in research and development to increasingly incorporate preferred materials in our products as part of our sustainability efforts. We also increasingly use preferred synthetics, preferred regenerated or synthetic cellulosic fibers, and preferred plant fibers. Although we continue to refine our materials and develop new properties for specific applications, if we fail to introduce technical innovation in our products or experience issues with the quality of our products or materials, consumer demand for our products could decline and we may experience reputational damage. Further, as our brands transition to suppliers with recycled, renewable, regenerated, and certified/natural materials (preferred materials), we may be subject to increased costs or supply constraints, which could reduce our sales and profitability and have a material adverse effect on our financial condition and results of operations." }, { "status": "MODIFIED", "current_title": "results of operations.", "prior_title": "We depend on qualified talent and, if we are unable to retain or hire executive officers, key employees, and skilled talent, we may not be able to achieve our strategic objectives, and our results of operations may be adversely impacted.", "similarity_score": 0.655, "confidence": "medium", "key_changes": [ "Reworded sentence: \"In addition, to develop new products and successfully operate and grow our key business processes, we rely on employees with specialized expertise across design, marketing, merchandising, sourcing, technology, operations, and support functions, including talent in areas such as data analytics, digital commerce, and supply chain management.\"", "Reworded sentence: \"The loss of one or more of our executive officers or other key employees or significant turnover in our senior management, and the often-extensive process of identifying and hiring other talent to fill those key positions, could have a material adverse effect on our results of operations.\"" ], "current_body": "To execute our growth plan, we must continue to attract and retain highly qualified talent, including executive officers and key employees. In addition, to develop new products and successfully operate and grow our key business processes, we rely on employees with specialized expertise across design, marketing, merchandising, sourcing, technology, operations, and support functions, including talent in areas such as data analytics, digital commerce, and supply chain management. Competition for executive officers, key employees, and skilled talent is intense within our industry, and we continue to experience upward pressure on compensation costs. Changes to our Table of Contents 17office environment or work models may not meet employees’ expectations, and many of the companies with which we compete for talent have greater name recognition and financial resources than we have. Continued strength in our results may also increase the risk that our employees are targeted by competitors. If our overall employment proposition, including compensation, benefits, culture, work model, or career development opportunities, is not perceived as favorable relative to other employers, our ability to attract, hire, and retain qualified personnel could be adversely affected. We are committed to offering competitive compensation and benefits, which may increase our selling, general, and administrative (SG&A) expenses. Further, our domestic headquarters are located in Goleta, California, which may further limit our ability to attract qualified professionals.If we hire employees from competitors, their former employers may assert that we or these employees have breached legal obligations, resulting in a diversion of management time and resources. Prospective and existing employees also often consider the value of stock-based compensation when deciding whether to accept or remain in a position. Accordingly, volatility in our stock price may adversely affect our ability to recruit and retain qualified talent. Any inability to attract, retain, or motivate executive officers, key employees, or other skilled personnel could adversely affect our ability to achieve our long-term strategic objectives, harm our results of operations, and impair our ability to compete effectively.The continued service of our executive officers and key employees is particularly important, and the departure of such talent may disrupt our business or result in the depletion of significant institutional knowledge. Our executive officers and key employees are employed on an at-will basis, which means that they can terminate their employment with us at any time. The loss of one or more of our executive officers or other key employees or significant turnover in our senior management, and the often-extensive process of identifying and hiring other talent to fill those key positions, could have a material adverse effect on our results of operations. Sheepskin and other raw materials are used to manufacture a significant portion of our products, and disruptions in the availability, pricing, or quality standards of these inputs could have a material adverse effect on our business.We purchase raw materials and components that are subject to supplier and geographic concentration, most significantly sheepskin, which is used in a substantial portion of our UGG brand products. Sheepskin is in high demand and sourced primarily from Australia and processed largely by two tanneries in China capable of meeting our quality, volume, and animal welfare standards. This geographic and supplier concentration exposes us to supply disruption risk. We also rely on designated suppliers for certain other specialized raw materials, including sugarcane-derived EVA, used in certain components of our products.If suppliers of sheepskin, including tanneries involved in its processing, sugarcane-derived EVA, or other materials are unable to meet our quality, sustainability, or volume requirements, or if their operations are disrupted or cease, we may not be able to obtain adequate quantities of these materials or suitable substitutes on acceptable terms, or at all. Although alternative materials may be available for certain branded components, which may be limited, such alternatives would not include the same trademarks. As a result, supply disruptions could require product redesign or delayed production, increase costs, reduce inventory availability, result in loss of sales or increased returns, and harm our reputation. In addition, the raw materials used in the manufacturing of our products are subject to commodity price volatility, most significantly sheepskin. Although sheepskin pricing has been relatively stable in recent years, prices and availability may fluctuate due to changes in supply and demand, weather conditions, energy and logistics costs, labor disruptions, regulatory developments, disease incidence, the effects of climate change, and broader market dynamics. While we use contracts and other pricing arrangements to mitigate price volatility, prolonged increases in sheepskin costs or other key inputs could increase manufacturing expenses and negatively impact our gross margin, and we may be unable to offset such increases through pricing actions or changes in product mix. Evolving fashion trends, social expectations, and ethical considerations, including increased opposition to the use of animal-derived materials, as well as existing or potential legislation restricting the sale of such products in certain jurisdictions, could also reduce consumer demand for sheepskin products or limit our ability to sell them in key markets. Because sheepskin is integral to the UGG brand, adverse changes in consumer preferences, regulatory requirements, or sourcing standards applicable to sheepskin could have a material adverse effect on our business, financial condition, and results of operations. Table of Contents 17 Table of Contents 17 Table of Contents 17 office environment or work models may not meet employees’ expectations, and many of the companies with which we compete for talent have greater name recognition and financial resources than we have. Continued strength in our results may also increase the risk that our employees are targeted by competitors. If our overall employment proposition, including compensation, benefits, culture, work model, or career development opportunities, is not perceived as favorable relative to other employers, our ability to attract, hire, and retain qualified personnel could be adversely affected. We are committed to offering competitive compensation and benefits, which may increase our selling, general, and administrative (SG&A) expenses. Further, our domestic headquarters are located in Goleta, California, which may further limit our ability to attract qualified professionals.If we hire employees from competitors, their former employers may assert that we or these employees have breached legal obligations, resulting in a diversion of management time and resources. Prospective and existing employees also often consider the value of stock-based compensation when deciding whether to accept or remain in a position. Accordingly, volatility in our stock price may adversely affect our ability to recruit and retain qualified talent. Any inability to attract, retain, or motivate executive officers, key employees, or other skilled personnel could adversely affect our ability to achieve our long-term strategic objectives, harm our results of operations, and impair our ability to compete effectively.The continued service of our executive officers and key employees is particularly important, and the departure of such talent may disrupt our business or result in the depletion of significant institutional knowledge. Our executive officers and key employees are employed on an at-will basis, which means that they can terminate their employment with us at any time. The loss of one or more of our executive officers or other key employees or significant turnover in our senior management, and the often-extensive process of identifying and hiring other talent to fill those key positions, could have a material adverse effect on our results of operations. Sheepskin and other raw materials are used to manufacture a significant portion of our products, and disruptions in the availability, pricing, or quality standards of these inputs could have a material adverse effect on our business.We purchase raw materials and components that are subject to supplier and geographic concentration, most significantly sheepskin, which is used in a substantial portion of our UGG brand products. Sheepskin is in high demand and sourced primarily from Australia and processed largely by two tanneries in China capable of meeting our quality, volume, and animal welfare standards. This geographic and supplier concentration exposes us to supply disruption risk. We also rely on designated suppliers for certain other specialized raw materials, including sugarcane-derived EVA, used in certain components of our products.If suppliers of sheepskin, including tanneries involved in its processing, sugarcane-derived EVA, or other materials are unable to meet our quality, sustainability, or volume requirements, or if their operations are disrupted or cease, we may not be able to obtain adequate quantities of these materials or suitable substitutes on acceptable terms, or at all. Although alternative materials may be available for certain branded components, which may be limited, such alternatives would not include the same trademarks. As a result, supply disruptions could require product redesign or delayed production, increase costs, reduce inventory availability, result in loss of sales or increased returns, and harm our reputation. In addition, the raw materials used in the manufacturing of our products are subject to commodity price volatility, most significantly sheepskin. Although sheepskin pricing has been relatively stable in recent years, prices and availability may fluctuate due to changes in supply and demand, weather conditions, energy and logistics costs, labor disruptions, regulatory developments, disease incidence, the effects of climate change, and broader market dynamics. While we use contracts and other pricing arrangements to mitigate price volatility, prolonged increases in sheepskin costs or other key inputs could increase manufacturing expenses and negatively impact our gross margin, and we may be unable to offset such increases through pricing actions or changes in product mix. Evolving fashion trends, social expectations, and ethical considerations, including increased opposition to the use of animal-derived materials, as well as existing or potential legislation restricting the sale of such products in certain jurisdictions, could also reduce consumer demand for sheepskin products or limit our ability to sell them in key markets. Because sheepskin is integral to the UGG brand, adverse changes in consumer preferences, regulatory requirements, or sourcing standards applicable to sheepskin could have a material adverse effect on our business, financial condition, and results of operations. office environment or work models may not meet employees’ expectations, and many of the companies with which we compete for talent have greater name recognition and financial resources than we have. Continued strength in our results may also increase the risk that our employees are targeted by competitors. If our overall employment proposition, including compensation, benefits, culture, work model, or career development opportunities, is not perceived as favorable relative to other employers, our ability to attract, hire, and retain qualified personnel could be adversely affected. We are committed to offering competitive compensation and benefits, which may increase our selling, general, and administrative (SG&A) expenses. Further, our domestic headquarters are located in Goleta, California, which may further limit our ability to attract qualified professionals. If we hire employees from competitors, their former employers may assert that we or these employees have breached legal obligations, resulting in a diversion of management time and resources. Prospective and existing employees also often consider the value of stock-based compensation when deciding whether to accept or remain in a position. Accordingly, volatility in our stock price may adversely affect our ability to recruit and retain qualified talent. Any inability to attract, retain, or motivate executive officers, key employees, or other skilled personnel could adversely affect our ability to achieve our long-term strategic objectives, harm our results of operations, and impair our ability to compete effectively. The continued service of our executive officers and key employees is particularly important, and the departure of such talent may disrupt our business or result in the depletion of significant institutional knowledge. Our executive officers and key employees are employed on an at-will basis, which means that they can terminate their employment with us at any time. The loss of one or more of our executive officers or other key employees or significant turnover in our senior management, and the often-extensive process of identifying and hiring other talent to fill those key positions, could have a material adverse effect on our results of operations.", "prior_body": "To execute our growth plan, we must continue to attract and retain highly qualified talent, including executive officers and key employees. Further, to continue to develop new products and successfully operate and grow our key business processes, it is important for us to continue hiring and retaining talent in highly skilled footwear, apparel and accessories design, marketing, merchandising, sourcing, technology, operations, and support functions. Competition for executive officers, key employees, and skilled talent is intense within our industry and there continues to be upward pressure on the compensation paid to these professionals. Changes to our office environment or work models may not meet our employees’ expectations. Many of the companies with which we compete for experienced talent have greater name recognition and financial resources than we have. Further, continued strength of our results may result in other companies and competitors perceiving our employees as more desirable. If our employment proposition is not perceived as favorable compared to other companies’, it could negatively affect our ability to attract, hire, and retain our employees. We are committed to offering competitive compensation and benefits to employees across our business to positively affect attrition, which impacts our selling, general, and administrative (SG&A) expenses. Our domestic headquarters are located in Goleta, California, which is not generally recognized as a prominent commercial center, and it is difficult to attract qualified professionals due to our location. If we hire employees from competitors, their former employers may assert that we or these employees have breached legal obligations, resulting in a diversion of our time and resources. In addition, prospective and existing employees often consider the value of the stock-based compensation when deciding whether to take a job. If our stock price is volatile, it may adversely affect our ability to recruit and retain qualified talent and we may be unable to achieve our long-term strategic objectives, our results of operations may suffer, and it may damage our reputation as a preferred employer, which would challenge our ability to effectively compete across the global labor market. We believe our culture has been and will continue to be a key contributor to our success. If we do not maintain our culture and core values, the growth and success of our business may be harmed. Any failure to preserve our culture could negatively affect our ability to recruit and retain talent and to achieve our strategic objectives. The continued service of our executive officers and key employees is particularly important, and the departure of such talent may disrupt our business or result in the depletion of significant institutional knowledge. Our executive officers and key employees are employed on an at-will basis, which means that they can terminate their employment with us at any time. The loss of one or more of our executive officers or other key employees or significant turnover in our senior management, and the often-extensive process of identifying and hiring other talent to fill those key positions, could have a material adverse effect on our business." }, { "status": "MODIFIED", "current_title": "financial condition.", "prior_title": "We face risks associated with strategic acquisitions and divestitures, and our failure to successfully integrate any acquired business could have a material adverse effect on our results of operations and financial condition.", "similarity_score": 0.649, "confidence": "medium", "key_changes": [ "Reworded sentence: \"Such acquisitions involve numerous risks, challenges, and uncertainties, including the potential to: •expose us to risks inherent in entering into new markets or geographic regions; •lose significant customers or key personnel of the acquired business; •encounter difficulties integrating and managing acquired assets; •encounter difficulties marketing to new consumers or managing geographically dispersed operations; •divert management’s time and attention away from other aspects of our business operations; and •incur costs relating to potential acquisitions that we fail to consummate, which we may not recover.\"", "Reworded sentence: \"For example, during fiscal year 2026, we completed the phase out of the standalone operations of the Koolaburra brand and AHNU brand.\"" ], "current_body": "As part of our overall strategy, we may periodically consider strategic acquisitions to expand our brands into complementary product categories and markets, or to acquire new brands, technologies, intellectual property, or other assets. Our ability to do so depends on our ability to identify and successfully pursue suitable acquisition opportunities. Such acquisitions involve numerous risks, challenges, and uncertainties, including the potential to: •expose us to risks inherent in entering into new markets or geographic regions; •lose significant customers or key personnel of the acquired business; •encounter difficulties integrating and managing acquired assets; •encounter difficulties marketing to new consumers or managing geographically dispersed operations; •divert management’s time and attention away from other aspects of our business operations; and •incur costs relating to potential acquisitions that we fail to consummate, which we may not recover. Table of Contents 20Additionally, we may not be able to successfully integrate acquired businesses into our operations or achieve the expected benefits of such acquisitions. We may also face cannibalization of existing product sales by newly acquired products unless we successfully differentiate target consumers and increase our overall market share.Further, we may be required to issue equity securities to finance an acquisition, which would be dilutive to our stockholders, and equity securities may have rights or preferences senior to those of our existing stockholders. If we incur indebtedness to finance an acquisition, it will result in debt service costs, and we may be subject to covenants restricting our operations or liens encumbering our assets. As part of our overall strategy to allocate resources that best align with our long-term objectives, we may seek to sell one or more brands. For example, during fiscal year 2026, we completed the phase out of the standalone operations of the Koolaburra brand and AHNU brand. Further, during fiscal year 2025, we completed the sale of the Sanuk brand. These transactions involve financial and operational risks, including diverting management and employee time and attention from other aspects of our business, separating personnel and financial and other systems, impairments, and adversely affecting relationships with existing suppliers and customers. The process of completing any acquisitions or divestitures may be time-consuming, involve significant costs and expenses, and the expected benefits of such acquisitions or divestitures may not be realized. Our business, results of operations, and financial condition could be negatively impacted. In addition, we may overestimate the value of acquisition targets or fail to realize anticipated synergies, which could result in impairments or reduced returns on our investments.Risks Related to Our Global Business Strategy and Operations, and International CommerceOur reliance on independent manufacturers and suppliers located primarily in Southeast Asia exposes us to risks associated with unpredictable and evolving international trade policies, regulatory environments, and geopolitical conditions that could materially increase our costs, disrupt our global supply chain, and adversely affect our results of operations.The production of our finished goods is outsourced to independent manufacturers, the majority of which are in Southeast Asia. During fiscal year 2026, production of our finished goods was predominantly from Vietnam and Indonesia, while less than 5% was from China or any other individual country. As a result, we are exposed to geographic concentration risk arising from regional and global economic conditions, changes in diplomatic and trade relationships (including the imposition of new or increased tariffs), political and social instability, armed conflict, disease outbreaks, natural disasters, and other regulatory, environmental, and geopolitical developments. The majority of raw materials and components used by our independent manufacturers are sourced from designated suppliers, and tariffs, duties, or other trade restrictions may be imposed, modified, or expanded with limited notice. These measures could require us or our independent manufacturers to seek alternative sourcing options that may not be available in sufficient quantities, at acceptable quality levels, or in a timely manner. Evolving international trade dynamics could materially increase our cost of goods sold, disrupt logistics or inventory flows, adversely affect product pricing and demand, and reduce our gross margin. Customs authorities may also challenge our tariff classifications or treatment of certain products, resulting in additional costs or penalties. In addition, certain tariffs imposed under the International Emergency Economic Powers Act have been invalidated by a recent US Supreme Court decision, and additional tariffs may be invalidated, modified, or refunded in the future. As a result, we may face uncertainty regarding the treatment of tariff-related costs, including the potential recovery or refund of tariff amounts previously paid or partially reflected in selective pricing actions or cost-sharing arrangements. These and other judicial, regulatory, or trade policy developments could increase compliance complexity, create cost volatility, impair our ability to plan sourcing, pricing, and inventory strategies, and result in disputes, claims, unrecoverable costs, and reputational harm, regardless of the ultimate outcome.In addition to trade-related risks, our international operations and independent manufacturers are subject to regulatory, operational, and reputational risks. Although we require compliance with environmental, labor, ethical, health, safety, and other business standards and conduct periodic audits, we do not directly control the practices of our independent manufacturers or suppliers. As we continue to diversify within Southeast Asia, monitoring compliance across a broader supplier base may be more complex. Any noncompliance could result in product Table of Contents 20 Table of Contents 20 Table of Contents 20 Additionally, we may not be able to successfully integrate acquired businesses into our operations or achieve the expected benefits of such acquisitions. We may also face cannibalization of existing product sales by newly acquired products unless we successfully differentiate target consumers and increase our overall market share.Further, we may be required to issue equity securities to finance an acquisition, which would be dilutive to our stockholders, and equity securities may have rights or preferences senior to those of our existing stockholders. If we incur indebtedness to finance an acquisition, it will result in debt service costs, and we may be subject to covenants restricting our operations or liens encumbering our assets. As part of our overall strategy to allocate resources that best align with our long-term objectives, we may seek to sell one or more brands. For example, during fiscal year 2026, we completed the phase out of the standalone operations of the Koolaburra brand and AHNU brand. Further, during fiscal year 2025, we completed the sale of the Sanuk brand. These transactions involve financial and operational risks, including diverting management and employee time and attention from other aspects of our business, separating personnel and financial and other systems, impairments, and adversely affecting relationships with existing suppliers and customers. The process of completing any acquisitions or divestitures may be time-consuming, involve significant costs and expenses, and the expected benefits of such acquisitions or divestitures may not be realized. Our business, results of operations, and financial condition could be negatively impacted. In addition, we may overestimate the value of acquisition targets or fail to realize anticipated synergies, which could result in impairments or reduced returns on our investments.Risks Related to Our Global Business Strategy and Operations, and International CommerceOur reliance on independent manufacturers and suppliers located primarily in Southeast Asia exposes us to risks associated with unpredictable and evolving international trade policies, regulatory environments, and geopolitical conditions that could materially increase our costs, disrupt our global supply chain, and adversely affect our results of operations.The production of our finished goods is outsourced to independent manufacturers, the majority of which are in Southeast Asia. During fiscal year 2026, production of our finished goods was predominantly from Vietnam and Indonesia, while less than 5% was from China or any other individual country. As a result, we are exposed to geographic concentration risk arising from regional and global economic conditions, changes in diplomatic and trade relationships (including the imposition of new or increased tariffs), political and social instability, armed conflict, disease outbreaks, natural disasters, and other regulatory, environmental, and geopolitical developments. The majority of raw materials and components used by our independent manufacturers are sourced from designated suppliers, and tariffs, duties, or other trade restrictions may be imposed, modified, or expanded with limited notice. These measures could require us or our independent manufacturers to seek alternative sourcing options that may not be available in sufficient quantities, at acceptable quality levels, or in a timely manner. Evolving international trade dynamics could materially increase our cost of goods sold, disrupt logistics or inventory flows, adversely affect product pricing and demand, and reduce our gross margin. Customs authorities may also challenge our tariff classifications or treatment of certain products, resulting in additional costs or penalties. In addition, certain tariffs imposed under the International Emergency Economic Powers Act have been invalidated by a recent US Supreme Court decision, and additional tariffs may be invalidated, modified, or refunded in the future. As a result, we may face uncertainty regarding the treatment of tariff-related costs, including the potential recovery or refund of tariff amounts previously paid or partially reflected in selective pricing actions or cost-sharing arrangements. These and other judicial, regulatory, or trade policy developments could increase compliance complexity, create cost volatility, impair our ability to plan sourcing, pricing, and inventory strategies, and result in disputes, claims, unrecoverable costs, and reputational harm, regardless of the ultimate outcome.In addition to trade-related risks, our international operations and independent manufacturers are subject to regulatory, operational, and reputational risks. Although we require compliance with environmental, labor, ethical, health, safety, and other business standards and conduct periodic audits, we do not directly control the practices of our independent manufacturers or suppliers. As we continue to diversify within Southeast Asia, monitoring compliance across a broader supplier base may be more complex. Any noncompliance could result in product Additionally, we may not be able to successfully integrate acquired businesses into our operations or achieve the expected benefits of such acquisitions. We may also face cannibalization of existing product sales by newly acquired products unless we successfully differentiate target consumers and increase our overall market share. Further, we may be required to issue equity securities to finance an acquisition, which would be dilutive to our stockholders, and equity securities may have rights or preferences senior to those of our existing stockholders. If we incur indebtedness to finance an acquisition, it will result in debt service costs, and we may be subject to covenants restricting our operations or liens encumbering our assets. As part of our overall strategy to allocate resources that best align with our long-term objectives, we may seek to sell one or more brands. For example, during fiscal year 2026, we completed the phase out of the standalone operations of the Koolaburra brand and AHNU brand. Further, during fiscal year 2025, we completed the sale of the Sanuk brand. These transactions involve financial and operational risks, including diverting management and employee time and attention from other aspects of our business, separating personnel and financial and other systems, impairments, and adversely affecting relationships with existing suppliers and customers. The process of completing any acquisitions or divestitures may be time-consuming, involve significant costs and expenses, and the expected benefits of such acquisitions or divestitures may not be realized. Our business, results of operations, and financial condition could be negatively impacted. In addition, we may overestimate the value of acquisition targets or fail to realize anticipated synergies, which could result in impairments or reduced returns on our investments.", "prior_body": "As part of our overall strategy, we may periodically consider strategic acquisitions to expand our brands into complementary product categories and markets, or to acquire new brands, technologies, intellectual property, or other assets. Our ability to do so depends on our ability to identify and successfully pursue suitable acquisition opportunities. Such acquisitions involve numerous risks, challenges, and uncertainties, including the potential to: •expose us to risks inherent in entering into a new market or geographic region; •lose significant customers or key personnel of the acquired business; •encounter difficulties managing and implementing acquired assets; •encounter difficulties marketing to new consumers or managing geographically remote operations; •divert management’s time and attention away from other aspects of our business operations; and •incur costs relating to a potential acquisition that we fail to consummate, which we may not recover. Additionally, we may not be able to successfully integrate the assets or operations of any acquired businesses into our operations, or to achieve the expected benefits of any acquisitions. We may also face cannibalization of existing product sales by newly acquired products unless we aggressively target different consumers for products and increase our overall market share. The failure to successfully integrate any acquired business or products in the future could have a material adverse effect on our results of operations and financial position. Further, we may be required to issue equity securities to finance an acquisition, which would be dilutive to our stockholders, and equity securities may have rights or preferences senior to those of our existing stockholders. If we incur indebtedness to finance an acquisition, it will result in debt service costs, and we may be subject to covenants restricting our operations or liens encumbering our assets. As part of our overall strategy to allocate resources that best align with our long-term objectives, we may seek to sell one or more brands. For example, during fiscal year 2025, we completed the sale of the Sanuk brand and began phasing out the standalone operations of the Koolaburra brand. These transactions involve financial and operational risks, including diverting management and employee time and attention away from other aspects of our business, separating personnel and financial and other systems, impairments, and adversely affecting relationships with existing suppliers and customers. The process of completing any acquisitions or divestitures may be time-consuming, involve significant costs and expenses, and the expected benefits of such acquisitions or divestitures may not be realized, and our business or financial results could be negatively impacted. 19 19 19 Table of Contents Table of Contents" }, { "status": "MODIFIED", "current_title": "would result in loss of sales and harm our relationships with customers.", "prior_title": "We rely upon independent manufacturers for most of our production needs, and the failure of these manufacturers to manage these responsibilities would prevent us from filling customer orders, which would result in loss of sales and harm our relationships with customers.", "similarity_score": 0.606, "confidence": "medium", "key_changes": [ "Reworded sentence: \"We rely upon independent manufacturers and their respective material suppliers for all of our production needs, the majority of which are located in Southeast Asia, predominantly in Vietnam and Indonesia, which exposes us to geographic concentration risk, including risks arising from regional economic, political, environmental, or operational conditions, and we do not have direct control over these manufacturers or their suppliers.\"", "Reworded sentence: \"The ability of our independent manufacturers to meet these expectations may be adversely affected by liquidity constraints or limitations in their access to third-party financing arrangements supporting their supply chains or working capital needs, which could reduce available production capacity, delay shipments, or result in lost sales.\"" ], "current_body": "We rely upon independent manufacturers and their respective material suppliers for all of our production needs, the majority of which are located in Southeast Asia, predominantly in Vietnam and Indonesia, which exposes us to geographic concentration risk, including risks arising from regional economic, political, environmental, or operational conditions, and we do not have direct control over these manufacturers or their suppliers. We expect our independent manufacturers to finance the production of goods ordered, maintain manufacturing capacity, comply with our policies, and store finished goods in a safe location pending shipment. The ability of our independent manufacturers to meet these expectations may be adversely affected by liquidity constraints or limitations in their access to third-party financing arrangements supporting their supply chains or working capital needs, which could reduce available production capacity, delay shipments, or result in lost sales. Disruptions arising from these geographic concentrations, our limited control over independent manufacturers and their suppliers, or our manufacturers’ inability to meet these expectations could adversely affect our ability to manufacture products or fulfill customer orders, which could negatively affect our results of operations. Table of Contents 16There can be no assurance of a long-term, uninterrupted supply of products from our independent manufacturers. Our dependence on a limited number of key manufacturing partners may increase our exposure to disruptions, pricing changes, or capacity constraints. While we have long-standing relationships with most of these manufacturers, they could terminate our engagement, seek to increase their prices, or extract other concessions from us, and we may not be able to timely engage a suitable alternative. If we are required to find alternative manufacturers, we could experience manufacturing delays, increased manufacturing costs, and substantial disruption to our business, any of which could negatively affect our results of operations.Interruptions in the supply of our products can also result from adverse events that impair our manufacturers’ operations. For example, we keep proprietary materials necessary to produce our products, such as shoe molds and other materials, in the custody of our independent manufacturers. If these independent manufacturers were to lose or damage these proprietary materials, we cannot be assured that the manufacturers would have adequate insurance to cover such loss or damage, and, in any event, the replacement of such materials would likely result in significant delays in the production of our products, which could result in a loss of sales and earnings.Our financial success is influenced by the success of our customers, and the loss of a key customer could have a material adverse effect on our results of operations. Much of our financial success is related to the ability of our customers in the wholesale channel, including international distributors and retail partners, to effectively market and sell our brands to consumers. These relationships are typically governed by contractual arrangements. If a customer fails to meet contractual obligations, satisfy our expectations and standards, or experiences operational or financial difficulties, it may be challenging and time-consuming to identify and transition to an acceptable alternative. In addition, disputes under these arrangements could result in litigation, arbitration, settlement costs, or operational disruptions. We may also be adversely affected by our customers’ actions or omissions, including failures to comply with applicable laws, regulatory requirements, labor or employment standards, or our policies. Such conduct could harm our reputation, subject us to regulatory scrutiny or liability, disrupt our relationships with other customers and business partners, and adversely affect demand for our products. Transitioning away from an existing customer, whether due to performance or compliance concerns, may result in lost sales, significant transition costs, and operational disruption as we identify, onboard, and integrate replacement distribution or retail partners, and there can be no assurance that a replacement will generate comparable or improved results. We face the risk that key customers may not increase their business with us as anticipated, may significantly reduce purchases, or may terminate their relationships with us. However, no single customer accounted for 10.0% or more of our total net sales during fiscal year 2026. The failure to increase sales to these customers could negatively affect our growth prospects, and any reduction or loss of their business could materially and adversely affect our net sales and results of operations, particularly if we are unable to offset such declines through our DTC channel. As of March 31, 2026, one customer represents 18.5% of trade accounts receivable, net, which is generally unsecured and exposes us to collection risk that could affect our results of operations and liquidity. We rely on customer purchase orders and delivery schedules for forecasting sales and results of operations. If customers postpone, cancel, reduce, or discontinue orders, we may fail to meet our forecasts. These risks may be exacerbated by structural changes in the retail industry including shifts in technology, consumer and wholesale partner purchasing behavior, economic conditions, and a shrinking retail footprint. The loss of a key customer, or a significant reduction in orders, could result in lower sales, excess inventory and related write-downs, and materially and adversely affect our financial condition or results of operations. In addition, a key customer may liquidate excess inventory through discounted channels, including unauthorized sellers, which could negatively impact brand perception and divert demand from our authorized distribution channels. We depend on qualified talent and, if we are unable to retain or hire executive officers, key employees, and skilled talent, we may not be able to achieve our strategic objectives, which could adversely affect our results of operations.To execute our growth plan, we must continue to attract and retain highly qualified talent, including executive officers and key employees. In addition, to develop new products and successfully operate and grow our key business processes, we rely on employees with specialized expertise across design, marketing, merchandising, sourcing, technology, operations, and support functions, including talent in areas such as data analytics, digital commerce, and supply chain management. Competition for executive officers, key employees, and skilled talent is intense within our industry, and we continue to experience upward pressure on compensation costs. Changes to our Table of Contents 16 Table of Contents 16 Table of Contents 16 There can be no assurance of a long-term, uninterrupted supply of products from our independent manufacturers. Our dependence on a limited number of key manufacturing partners may increase our exposure to disruptions, pricing changes, or capacity constraints. While we have long-standing relationships with most of these manufacturers, they could terminate our engagement, seek to increase their prices, or extract other concessions from us, and we may not be able to timely engage a suitable alternative. If we are required to find alternative manufacturers, we could experience manufacturing delays, increased manufacturing costs, and substantial disruption to our business, any of which could negatively affect our results of operations.Interruptions in the supply of our products can also result from adverse events that impair our manufacturers’ operations. For example, we keep proprietary materials necessary to produce our products, such as shoe molds and other materials, in the custody of our independent manufacturers. If these independent manufacturers were to lose or damage these proprietary materials, we cannot be assured that the manufacturers would have adequate insurance to cover such loss or damage, and, in any event, the replacement of such materials would likely result in significant delays in the production of our products, which could result in a loss of sales and earnings.Our financial success is influenced by the success of our customers, and the loss of a key customer could have a material adverse effect on our results of operations. Much of our financial success is related to the ability of our customers in the wholesale channel, including international distributors and retail partners, to effectively market and sell our brands to consumers. These relationships are typically governed by contractual arrangements. If a customer fails to meet contractual obligations, satisfy our expectations and standards, or experiences operational or financial difficulties, it may be challenging and time-consuming to identify and transition to an acceptable alternative. In addition, disputes under these arrangements could result in litigation, arbitration, settlement costs, or operational disruptions. We may also be adversely affected by our customers’ actions or omissions, including failures to comply with applicable laws, regulatory requirements, labor or employment standards, or our policies. Such conduct could harm our reputation, subject us to regulatory scrutiny or liability, disrupt our relationships with other customers and business partners, and adversely affect demand for our products. Transitioning away from an existing customer, whether due to performance or compliance concerns, may result in lost sales, significant transition costs, and operational disruption as we identify, onboard, and integrate replacement distribution or retail partners, and there can be no assurance that a replacement will generate comparable or improved results. We face the risk that key customers may not increase their business with us as anticipated, may significantly reduce purchases, or may terminate their relationships with us. However, no single customer accounted for 10.0% or more of our total net sales during fiscal year 2026. The failure to increase sales to these customers could negatively affect our growth prospects, and any reduction or loss of their business could materially and adversely affect our net sales and results of operations, particularly if we are unable to offset such declines through our DTC channel. As of March 31, 2026, one customer represents 18.5% of trade accounts receivable, net, which is generally unsecured and exposes us to collection risk that could affect our results of operations and liquidity. We rely on customer purchase orders and delivery schedules for forecasting sales and results of operations. If customers postpone, cancel, reduce, or discontinue orders, we may fail to meet our forecasts. These risks may be exacerbated by structural changes in the retail industry including shifts in technology, consumer and wholesale partner purchasing behavior, economic conditions, and a shrinking retail footprint. The loss of a key customer, or a significant reduction in orders, could result in lower sales, excess inventory and related write-downs, and materially and adversely affect our financial condition or results of operations. In addition, a key customer may liquidate excess inventory through discounted channels, including unauthorized sellers, which could negatively impact brand perception and divert demand from our authorized distribution channels. We depend on qualified talent and, if we are unable to retain or hire executive officers, key employees, and skilled talent, we may not be able to achieve our strategic objectives, which could adversely affect our results of operations.To execute our growth plan, we must continue to attract and retain highly qualified talent, including executive officers and key employees. In addition, to develop new products and successfully operate and grow our key business processes, we rely on employees with specialized expertise across design, marketing, merchandising, sourcing, technology, operations, and support functions, including talent in areas such as data analytics, digital commerce, and supply chain management. Competition for executive officers, key employees, and skilled talent is intense within our industry, and we continue to experience upward pressure on compensation costs. Changes to our There can be no assurance of a long-term, uninterrupted supply of products from our independent manufacturers. Our dependence on a limited number of key manufacturing partners may increase our exposure to disruptions, pricing changes, or capacity constraints. While we have long-standing relationships with most of these manufacturers, they could terminate our engagement, seek to increase their prices, or extract other concessions from us, and we may not be able to timely engage a suitable alternative. If we are required to find alternative manufacturers, we could experience manufacturing delays, increased manufacturing costs, and substantial disruption to our business, any of which could negatively affect our results of operations. Interruptions in the supply of our products can also result from adverse events that impair our manufacturers’ operations. For example, we keep proprietary materials necessary to produce our products, such as shoe molds and other materials, in the custody of our independent manufacturers. If these independent manufacturers were to lose or damage these proprietary materials, we cannot be assured that the manufacturers would have adequate insurance to cover such loss or damage, and, in any event, the replacement of such materials would likely result in significant delays in the production of our products, which could result in a loss of sales and earnings.", "prior_body": "We rely upon independent manufacturers and their respective material suppliers for most of our production needs, the majority of which are located in Southeast Asia, predominately in Vietnam, and we do not have direct control over these manufacturers or their suppliers. We expect our independent manufacturers to finance the production of goods ordered, maintain manufacturing capacity, comply with our policies, and store finished goods in a safe location pending shipment. Further, because most of our independent manufacturers are in Southeast Asia, we are subject to risks associated with natural disasters, epidemics, geopolitical tensions, or other events outside of our control affecting the region. If any of these were to occur, we may not be able to timely source raw and other materials, manufacture products, or fill customer orders, or products delivered may not meet our quality standards, which would result in lost sales and harm to our relationships with customers. There can be no assurance of a long-term, uninterrupted supply of products from our independent manufacturers. While we have long-standing relationships with most of these manufacturers, they could terminate our engagement, seek to increase their prices, or extract other concessions from us, and we may not be able to timely engage a suitable alternative. If we are required to find alternative manufacturers, we could experience manufacturing delays, increased manufacturing costs, and substantial disruption to our business, any of which could negatively affect our results of operations. Interruptions in the supply of our products can also result from adverse events that impair our manufacturers’ operations. For example, we keep proprietary materials necessary to produce our products, such as shoe molds and other materials, in the custody of our independent manufacturers. If these independent manufacturers were to lose or damage these proprietary materials, we cannot be assured that the manufacturers would have adequate insurance to cover such loss or damage, and, in any event, the replacement of such materials would likely result in significant delays in the production of our products, which could result in a loss of sales and earnings." }, { "status": "MODIFIED", "current_title": "materially affect our financial position and results of operations.", "prior_title": "The tax laws applicable to our business are complex, and changes in tax laws or audits by taxing authorities could increase our worldwide tax rate and may subject us to additional tax liabilities, which may materially affect our financial position and results of operations.", "similarity_score": 0.58, "confidence": "low", "key_changes": [ "Reworded sentence: \"Changes in global tax laws, regulations, and treaties could materially affect our business.\"", "Reworded sentence: \"Changes in these tax laws (and our interpretation thereof), could result in a materially higher tax expense or a higher effective tax rate on our worldwide earnings.\"", "Reworded sentence: \"Refer to Note 5, “Income Taxes,” of our consolidated financial statements in Part IV within this Annual Report for further information regarding tax law changes.\"", "Reworded sentence: \"Although we believe our tax estimates are reasonable and our tax filings are prepared in accordance with all applicable tax laws, the final determination with respect to any tax audits, and related litigation, could be materially different from our estimates or from our historical tax provisions and accruals, especially as there is continued economic and political pressure to increase tax revenue in jurisdictions in which we operate.\"", "Added sentence: \"In addition, changes in our estimates related to uncertain tax positions could result in adjustments to our tax expense and effective tax rate in future periods.\"" ], "current_body": "Changes in global tax laws, regulations, and treaties could materially affect our business. These tax laws require significant judgment and specialized expertise to evaluate and estimate our worldwide provision for income taxes. Changes in these tax laws (and our interpretation thereof), could result in a materially higher tax expense or a higher effective tax rate on our worldwide earnings. For example, global tax authorities may take differing positions in interpreting the Organization for Economic Co-operation and Development’s (commonly known as OECD) guidance, including with respect to Pillar Two model rules, which could modify existing tax principles and increase our tax liabilities; in addition, the enactment of H.R. 1, also known as the One Big Beautiful Bill Act, or similar future legislation, may also affect applicable tax rules and interpretations. These changes and potential other tax law changes could increase our income tax liability or adversely affect our long-term effective tax rates and net income. Refer to Note 5, “Income Taxes,” of our consolidated financial statements in Part IV within this Annual Report for further information regarding tax law changes. Table of Contents 25Additionally, we are subject to tax audits, which may result in the assessment of additional taxes. Although we believe our tax estimates are reasonable and our tax filings are prepared in accordance with all applicable tax laws, the final determination with respect to any tax audits, and related litigation, could be materially different from our estimates or from our historical tax provisions and accruals, especially as there is continued economic and political pressure to increase tax revenue in jurisdictions in which we operate. The results of a tax audit or other tax proceeding could have a material adverse effect on our results of operations or cash flows during the periods for which that determination is made and may require a restatement of prior financial reports. In addition, changes in our estimates related to uncertain tax positions could result in adjustments to our tax expense and effective tax rate in future periods.Risks Related to Our Common StockOur common stock price has been volatile, which could result in losses for stockholders.The trading price of our common stock has been and may continue to be volatile. The trading price of our common stock could be affected by a number of factors, including:•changes in expectations regarding our future financial performance and results of operations;•changes in estimates and opinions of our performance by securities analysts and other market participants, or our failure to meet such estimates;•changes in our stockholder base or public actions taken by investors, including activism;•market research and opinions published by securities analysts and other market participants, and the response to such publications;•third-party data sources estimating our intra-quarter financial performance;•quarterly fluctuations in our sales, margins, expenses, financial condition, and results of operations;•the financial stability of our customers, manufacturers, suppliers, and competitors;•announcements made by us or our competitors regarding product launches or developments;•announcements by our competitors, or other companies in our industry, regarding changes in financial condition, results of operations or financial outlook;•legal proceedings, regulatory actions, and legislative changes impacting us, our competitors, or the industry in which we operate;•the declaration of stock or cash dividends, stock repurchases, or stock or reverse stock splits;•consumer confidence and discretionary spending levels;•broad market fluctuations in trading volume and market price of publicly traded securities; •general market, geopolitical, and macroeconomic conditions, including evolving international trade dynamics and recessionary conditions; and•trading activity in our stock by short-term or technical investors, including algorithmic trading, index funds, or other market participants whose investment decisions are not based on our fundamentals.In addition, the stock market in general has experienced extreme price and volume fluctuations. Accordingly, the price of our common stock is volatile and any investment in our stock is subject to risk of loss. These broad market and industry factors and other general macroeconomic conditions unrelated to our financial performance may also affect our common stock price, including in ways that are disproportionate to or not directly related to our operating performance.Anti-takeover provisions contained in our Amended and Restated Certificate of Incorporation (Certificate) and Amended and Restated Bylaws (Bylaws), as well as provisions of Delaware law, could impair or delay a takeover attempt.Our Certificate and Bylaws contain provisions that could have the effect of rendering more difficult hostile takeovers, change-in-control transactions, or changes in our Board or management. As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law, which may delay, deter, or prevent a change-in-control transaction. Any provision of Delaware law, our Certificate, or our Bylaws that has the effect of rendering more difficult, delaying, deterring, or preventing a change-in-control transaction could limit the opportunity for stockholders to receive a premium for their shares of our common stock, and could affect the price that investors are willing to pay for our common stock. Table of Contents 25 Table of Contents 25 Table of Contents 25 Additionally, we are subject to tax audits, which may result in the assessment of additional taxes. Although we believe our tax estimates are reasonable and our tax filings are prepared in accordance with all applicable tax laws, the final determination with respect to any tax audits, and related litigation, could be materially different from our estimates or from our historical tax provisions and accruals, especially as there is continued economic and political pressure to increase tax revenue in jurisdictions in which we operate. The results of a tax audit or other tax proceeding could have a material adverse effect on our results of operations or cash flows during the periods for which that determination is made and may require a restatement of prior financial reports. In addition, changes in our estimates related to uncertain tax positions could result in adjustments to our tax expense and effective tax rate in future periods.Risks Related to Our Common StockOur common stock price has been volatile, which could result in losses for stockholders.The trading price of our common stock has been and may continue to be volatile. The trading price of our common stock could be affected by a number of factors, including:•changes in expectations regarding our future financial performance and results of operations;•changes in estimates and opinions of our performance by securities analysts and other market participants, or our failure to meet such estimates;•changes in our stockholder base or public actions taken by investors, including activism;•market research and opinions published by securities analysts and other market participants, and the response to such publications;•third-party data sources estimating our intra-quarter financial performance;•quarterly fluctuations in our sales, margins, expenses, financial condition, and results of operations;•the financial stability of our customers, manufacturers, suppliers, and competitors;•announcements made by us or our competitors regarding product launches or developments;•announcements by our competitors, or other companies in our industry, regarding changes in financial condition, results of operations or financial outlook;•legal proceedings, regulatory actions, and legislative changes impacting us, our competitors, or the industry in which we operate;•the declaration of stock or cash dividends, stock repurchases, or stock or reverse stock splits;•consumer confidence and discretionary spending levels;•broad market fluctuations in trading volume and market price of publicly traded securities; •general market, geopolitical, and macroeconomic conditions, including evolving international trade dynamics and recessionary conditions; and•trading activity in our stock by short-term or technical investors, including algorithmic trading, index funds, or other market participants whose investment decisions are not based on our fundamentals.In addition, the stock market in general has experienced extreme price and volume fluctuations. Accordingly, the price of our common stock is volatile and any investment in our stock is subject to risk of loss. These broad market and industry factors and other general macroeconomic conditions unrelated to our financial performance may also affect our common stock price, including in ways that are disproportionate to or not directly related to our operating performance.Anti-takeover provisions contained in our Amended and Restated Certificate of Incorporation (Certificate) and Amended and Restated Bylaws (Bylaws), as well as provisions of Delaware law, could impair or delay a takeover attempt.Our Certificate and Bylaws contain provisions that could have the effect of rendering more difficult hostile takeovers, change-in-control transactions, or changes in our Board or management. As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law, which may delay, deter, or prevent a change-in-control transaction. Any provision of Delaware law, our Certificate, or our Bylaws that has the effect of rendering more difficult, delaying, deterring, or preventing a change-in-control transaction could limit the opportunity for stockholders to receive a premium for their shares of our common stock, and could affect the price that investors are willing to pay for our common stock. Additionally, we are subject to tax audits, which may result in the assessment of additional taxes. Although we believe our tax estimates are reasonable and our tax filings are prepared in accordance with all applicable tax laws, the final determination with respect to any tax audits, and related litigation, could be materially different from our estimates or from our historical tax provisions and accruals, especially as there is continued economic and political pressure to increase tax revenue in jurisdictions in which we operate. The results of a tax audit or other tax proceeding could have a material adverse effect on our results of operations or cash flows during the periods for which that determination is made and may require a restatement of prior financial reports. In addition, changes in our estimates related to uncertain tax positions could result in adjustments to our tax expense and effective tax rate in future periods.", "prior_body": "Changes in US and foreign tax laws, regulations, and treaties could materially affect our business. These tax laws require significant judgment and specialized expertise to evaluate and estimate our worldwide provision for income taxes. Changes in these tax laws, or to their interpretations, could result in a materially higher tax expense or a higher effective tax rate on our worldwide earnings. For example, global tax authorities may take differing positions in interpreting the Organization for Economic Co-operation and Development’s guidance, including with respect to Base Erosion and Profit Shifting, which could modify existing tax principles. These changes and potential other tax law changes could increase our income tax liability or adversely affect our long-term effective tax rates and net income. Many countries in which we operate have adopted tax laws that could impact our financial position and results of operations beyond fiscal year 2025, including the 15% global minimum tax under the Organization for Economic Cooperation and Development’s Pillar Two Global Anti-Base Erosion Rules. As of March 31, 2025, these rules are either effective or have been adopted in draft form in various countries, and may adversely affect our income tax expense, profitability, and capital allocation decisions going forward. Based on our current analysis, the enacted global minimum tax does not have a material impact on our consolidated financial statements for the fiscal year ended March 31, 2025. We continue to evaluate the impact of Pillar Two as additional guidance becomes available; however, uncertainty remains regarding the timing and interpretation of the rules by the jurisdictions in which we operate. Additionally, we are subject to tax audits, which may result in the assessment of additional taxes. Although we believe our tax estimates are reasonable and our tax filings are prepared in accordance with all applicable tax laws, the final determination with respect to any tax audits, and related litigation, could be materially different from our estimates or from our historical tax provisions and accruals, especially as there is continued economic and political pressures to increase tax revenues in jurisdictions in which we operate. The results of a tax audit or other tax proceeding could have a material adverse effect on our results of operations or cash flows during the periods for which that determination is made and may require a restatement of prior financial reports." }, { "status": "MODIFIED", "current_title": "have a negative effect on our results of operations.", "prior_title": "If we are found to have violated laws concerning the privacy and security of consumers’ or other individuals’ personal information, we could be subject to civil or criminal penalties, which could increase our liabilities and harm our reputation or our business.", "similarity_score": 0.578, "confidence": "low", "key_changes": [ "Reworded sentence: \"We operate on a global basis, with 41.7% of our total net sales for the year ended March 31, 2026, generated from operations outside the US.\"", "Reworded sentence: \"In addition, these laws may provide for private rights of action, statutory damages, or enhanced regulatory enforcement, which could increase our exposure to litigation and liability.\"" ], "current_body": "We operate on a global basis, with 41.7% of our total net sales for the year ended March 31, 2026, generated from operations outside the US. As we continue to expand our international operations, our sales and expenditures in foreign currencies are expected to become increasingly material and subject to foreign currency exchange rate fluctuations. A significant portion of our international operating expenses are paid in local currencies, and our international distributors typically sell our products in local currency, which affects the price to international consumers. Many of our subsidiaries operate with their local currency as their functional currency. Foreign currency fluctuations, which can be exacerbated by volatility in global credit markets, may change the US dollar value of our purchases or sales and, when converted to US dollars, could materially affect our net sales, gross margin, and results of operations. When the US dollar strengthens relative to foreign currencies, our sales and profits Table of Contents 22denominated in foreign currencies are reduced when converted into US dollars and our margins may be negatively affected. We routinely utilize foreign currency forward contracts or other derivative instruments for the amounts we expect to purchase and sell in foreign currencies to mitigate exposure to foreign currency exchange rate fluctuations. As we continue to expand international operations and increase purchases and sales in foreign currencies, we may utilize additional derivative instruments to hedge our risk. Our hedging strategies depend on our forecasts of sales, expenses, and cash flows, which are inherently subject to inaccuracies. Further, such strategies may not fully offset the effects of exchange rate fluctuations and may introduce additional volatility into our results of operations. Foreign currency exchange rate hedges, transactions, remeasurements, or translations could materially affect our consolidated financial statements.Risks Related to Technology, Data Security and PrivacyA security breach or disruption to our IT systems could materially harm our business, disrupt our operations, or result in unauthorized disclosure of sensitive information, which could damage our relationships, expose us to litigation or regulatory proceedings, or harm our reputation, any of which could materially and adversely affect our business and results of operations.We store and transmit sensitive information, including personal information of customers, consumers, and employees, payment card information, and proprietary operational, financial, and strategic data. Unauthorized access to, loss, misuse, or disclosure of such information could result in reputational harm, litigation, regulatory investigations, significant remediation costs and substantial losses. Our operations also depend on the continued performance of internal information systems and third-party technology providers, including systems utilizing data analytics and AI, to prevent unauthorized access and to respond quickly and effectively to data security incidents. Cybersecurity threats continue to evolve in frequency and sophistication, and our reliance on interconnected systems, cloud-based platforms, and third-party service providers increases the risk that a security incident affecting us or these parties could disrupt our operations. Although we invest in security controls and monitoring, these measures may not prevent all incidents or ensure timely detection. A cyber-attack, data security incident, or system disruption could materially and adversely affect our business if: •critical systems become inoperable or require significant time or cost to restore;•employees are unable to perform their duties or communicate effectively with third parties;•sensitive or confidential information is lost, misused, or disclosed without authorization;•business operations, including order placement, fulfillment, or reporting, are disrupted;•significant, unplanned investments in technology, security remediation, or recovery are required; or•we incur additional liabilities, costs, claims, or regulatory exposure.Any such event could result in reputational harm, loss of customer trust, strained relationships with partners and suppliers, litigation, fines, penalties, or regulatory actions under domestic and international data protection and privacy laws and could materially and adversely affect our business, financial condition, or results of operations.If we are found to have violated laws concerning the privacy and security of consumers’ or other individuals’ personal information, we could be subject to civil or criminal penalties, which could increase our liabilities and harm our reputation or our business.There are a number of laws protecting the privacy and security of personal information, as well as increased scrutiny by regulators, such as the Federal Trade Commission, and state attorneys general focused on our industry. Such laws include the California Consumer Privacy Act and California Privacy Rights Act, the EU’s General Data Protection Regulation and member state directives, Canada’s Personal Information Protection and Electronic Documents Act, and China’s Personal Information Protection Law, and limit how we may collect, use, share and store personal information, and they impose obligations to protect that information. We may also be subject to new or evolving data privacy and security laws and regulations. If we, or any of our service providers who have access to the personal data for which we are responsible, are found to be in violation of the privacy or security requirements of applicable data protection laws, we could be subject to civil or criminal penalties, which could increase our liabilities, harm our reputation, and have a material adverse effect on our business, financial condition, and results of operations. In addition, these laws may provide for private rights of action, statutory damages, or enhanced regulatory enforcement, which could increase our exposure to litigation and liability. Although we utilize a variety of Table of Contents 22 Table of Contents 22 Table of Contents 22 denominated in foreign currencies are reduced when converted into US dollars and our margins may be negatively affected. We routinely utilize foreign currency forward contracts or other derivative instruments for the amounts we expect to purchase and sell in foreign currencies to mitigate exposure to foreign currency exchange rate fluctuations. As we continue to expand international operations and increase purchases and sales in foreign currencies, we may utilize additional derivative instruments to hedge our risk. Our hedging strategies depend on our forecasts of sales, expenses, and cash flows, which are inherently subject to inaccuracies. Further, such strategies may not fully offset the effects of exchange rate fluctuations and may introduce additional volatility into our results of operations. Foreign currency exchange rate hedges, transactions, remeasurements, or translations could materially affect our consolidated financial statements.Risks Related to Technology, Data Security and PrivacyA security breach or disruption to our IT systems could materially harm our business, disrupt our operations, or result in unauthorized disclosure of sensitive information, which could damage our relationships, expose us to litigation or regulatory proceedings, or harm our reputation, any of which could materially and adversely affect our business and results of operations.We store and transmit sensitive information, including personal information of customers, consumers, and employees, payment card information, and proprietary operational, financial, and strategic data. Unauthorized access to, loss, misuse, or disclosure of such information could result in reputational harm, litigation, regulatory investigations, significant remediation costs and substantial losses. Our operations also depend on the continued performance of internal information systems and third-party technology providers, including systems utilizing data analytics and AI, to prevent unauthorized access and to respond quickly and effectively to data security incidents. Cybersecurity threats continue to evolve in frequency and sophistication, and our reliance on interconnected systems, cloud-based platforms, and third-party service providers increases the risk that a security incident affecting us or these parties could disrupt our operations. Although we invest in security controls and monitoring, these measures may not prevent all incidents or ensure timely detection. A cyber-attack, data security incident, or system disruption could materially and adversely affect our business if: •critical systems become inoperable or require significant time or cost to restore;•employees are unable to perform their duties or communicate effectively with third parties;•sensitive or confidential information is lost, misused, or disclosed without authorization;•business operations, including order placement, fulfillment, or reporting, are disrupted;•significant, unplanned investments in technology, security remediation, or recovery are required; or•we incur additional liabilities, costs, claims, or regulatory exposure.Any such event could result in reputational harm, loss of customer trust, strained relationships with partners and suppliers, litigation, fines, penalties, or regulatory actions under domestic and international data protection and privacy laws and could materially and adversely affect our business, financial condition, or results of operations.If we are found to have violated laws concerning the privacy and security of consumers’ or other individuals’ personal information, we could be subject to civil or criminal penalties, which could increase our liabilities and harm our reputation or our business.There are a number of laws protecting the privacy and security of personal information, as well as increased scrutiny by regulators, such as the Federal Trade Commission, and state attorneys general focused on our industry. Such laws include the California Consumer Privacy Act and California Privacy Rights Act, the EU’s General Data Protection Regulation and member state directives, Canada’s Personal Information Protection and Electronic Documents Act, and China’s Personal Information Protection Law, and limit how we may collect, use, share and store personal information, and they impose obligations to protect that information. We may also be subject to new or evolving data privacy and security laws and regulations. If we, or any of our service providers who have access to the personal data for which we are responsible, are found to be in violation of the privacy or security requirements of applicable data protection laws, we could be subject to civil or criminal penalties, which could increase our liabilities, harm our reputation, and have a material adverse effect on our business, financial condition, and results of operations. In addition, these laws may provide for private rights of action, statutory damages, or enhanced regulatory enforcement, which could increase our exposure to litigation and liability. Although we utilize a variety of denominated in foreign currencies are reduced when converted into US dollars and our margins may be negatively affected. We routinely utilize foreign currency forward contracts or other derivative instruments for the amounts we expect to purchase and sell in foreign currencies to mitigate exposure to foreign currency exchange rate fluctuations. As we continue to expand international operations and increase purchases and sales in foreign currencies, we may utilize additional derivative instruments to hedge our risk. Our hedging strategies depend on our forecasts of sales, expenses, and cash flows, which are inherently subject to inaccuracies. Further, such strategies may not fully offset the effects of exchange rate fluctuations and may introduce additional volatility into our results of operations. Foreign currency exchange rate hedges, transactions, remeasurements, or translations could materially affect our consolidated financial statements.", "prior_body": "There are a number of laws protecting the privacy and security of personal information and increased scrutiny by regulators, such as the Federal Trade Commission, and state attorneys general focused on our industry. Such laws include the California Consumer Privacy Act and California Privacy Rights Act, the EU’s General Data Protection Regulation and member state directives, Canada’s Personal Information Protection and Electronic Documents Acts, and China’s Personal Information Protection Law, and limit how we may collect, use, share and store personal information, and they impose obligations to protect that information. Further, we may be subject to new data privacy and security laws and regulations. If we, or any of our service providers who have access to the personal data for which we are responsible, are found to be in violation of the privacy or security requirements of applicable data protection laws, we could be subject to civil or criminal penalties, which could increase our liabilities, harm our reputation, and have a material adverse effect on our business, financial condition, and results of operations. Although we utilize a variety of measures to secure the data that we control, even compliant entities can experience security breaches or have inadvertent failures despite employing reasonable practices and safeguards." }, { "status": "MODIFIED", "current_title": "practices may impose additional costs on us or expose us to additional risks.", "prior_title": "Increasing expectations from investors, regulators, and other key stakeholders with respect to our ESG practices may impose additional costs on us or expose us to new or additional risks.", "similarity_score": 0.57, "confidence": "low", "key_changes": [ "Reworded sentence: \"Investors, advocacy groups, customers, consumers, employees, regulators, and other stakeholders are increasingly scrutinizing companies’ ESG practices and disclosures, including the social and environmental impacts of their operations.\"" ], "current_body": "Investors, advocacy groups, customers, consumers, employees, regulators, and other stakeholders are increasingly scrutinizing companies’ ESG practices and disclosures, including the social and environmental impacts of their operations. We periodically communicate ESG initiatives, including through our annual Creating Change Report and may face heightened scrutiny, regulatory inquiries, or litigation regarding the accuracy, completeness, or consistency of such disclosures, including allegations of “greenwashing.” Our ESG disclosures address a broad range of topics, including human rights, governance, environmental compliance, sustainability, human capital management, supply chain practices, and diversity and inclusion. Despite our efforts, our ESG practices, the pace at which we implement related initiatives, or our disclosures may not meet evolving stakeholder expectations. Perceptions regarding our ESG priorities, whether viewed as over- or under-emphasized, could adversely affect customer demand, employee recruitment and retention, or investor relations, or lead to reputational harm, regulatory action, or litigation. In addition, developing ESG goals, metrics, and data collection processes is complex, costly, and subject to evolving standards, internal controls, and regulatory regimes, including ESG-related disclosure requirements of the SEC, European, and other regulators, such as those in California. Failure, or perceived failure, to achieve or accurately report progress against our ESG initiatives or adapt to changing regulatory requirements could increase compliance costs, damage our reputation, and negatively affect our business and results of operations.", "prior_body": "Investor advocacy groups, certain institutional investors, investment funds, stockholders, customers, consumers, employees, non-governmental organizations, the media, including social media, and regulators, such as the SEC, are increasingly scrutinizing corporate responsibility, specifically related to ESG practices and disclosures of companies and the implications of the social and environmental costs of their investments. From time to time, we communicate certain ESG initiatives to market participants and our customers and business partners, including through our annual Creating Change Report. Any ESG disclosure we make may include our policies, practices, initiatives, and goals on a variety of human rights, corporate governance, environmental compliance, sustainability, employee health and safety practices, human capital management, product quality, supply chain management, and workforce inclusion and diversity. Although we have undertaken expansive efforts to improve and implement our ESG initiatives, it is possible stakeholders may not be satisfied with such disclosures, or our ESG practices or the speed of their adoption. In addition, negative perception of diversity, equity, and inclusion initiatives, whether due to perceived over or under pursuit of such initiatives, could result in reduced customer demand, stockholder activism, regulatory inquiries, and litigation or other adverse impacts. The establishment of ESG criteria and key metrics, as well as the collection of relevant data subject to evolving internal controls and processes, can be costly, complex, and time consuming, and is subject to evolving reporting standards and regulations. If our ESG practices do not meet investor or other stakeholder expectations and standards, which continue to evolve, or if we are perceived to have not appropriately responded to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, it may negatively affect our employee retention and recruitment, or we may suffer from reputational damage and our business and financial condition could be materially and adversely affected. We may also incur additional costs or require additional resources to monitor such stakeholder expectations and standards and to meet our targets and commitments. Further, we could fail, or be perceived to fail, to achieve our ESG initiatives or goals, or we could fail to report our progress fully and accurately on such initiatives and goals, which could negatively affect our reputation, employee retention and recruitment, and the willingness of our customers and suppliers to do business with us. Increasing focus on ESG matters has resulted in, and is expected to continue to result in, the adoption of legal and regulatory requirements designed to mitigate the effects of climate change on the environment and requiring climate-related disclosures. If new laws or regulations are more stringent than current legal or regulatory requirements, we may experience increased compliance burdens and costs to meet such obligations. Our processes and controls for reporting ESG matters and related data across our operations and supply chain are evolving along with multiple disparate standards for identifying, measuring, and reporting ESG metrics, including ESG-related disclosures required by the SEC, European, and other regulators, such as those in California, and such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future." }, { "status": "MODIFIED", "current_title": "Changes to economic conditions may adversely affect our financial condition and results of operations.", "prior_title": "Changes to economic conditions may adversely affect our financial condition and results of operations.", "similarity_score": 0.549, "confidence": "low", "key_changes": [ "Reworded sentence: \"Volatile economic conditions and changes in the market have affected, and may continue to affect, consumer confidence and discretionary spending.\"" ], "current_body": "Volatile economic conditions and changes in the market have affected, and may continue to affect, consumer confidence and discretionary spending. A significant portion of our HOKA brand and UGG brand products are premium, discretionary purchases, and demand for these products is sensitive to macroeconomic factors, including inflation, wages and employment, consumer debt, declines in net worth driven by market conditions, interest rates, tariffs, and public health issues such as a pandemic. During periods of economic uncertainty, consumers may reduce discretionary purchases, trade down to lower-priced alternatives, or delay buying decisions, which could require us to increase promotional activity or reduce prices, adversely affecting our sales and profitability. We sell a significant portion of our products through higher-end specialty and department store retailers and online marketplaces. These customers may be adversely affected by economic conditions, geopolitical instability, foreign currency fluctuations, reduced demand for premium products, limited access to credit, and increased competition. Financial difficulties among our customers could negatively affect our credit exposure, reserves, and relationships with key customers, and could reduce orders or increase the risk of delayed payments or defaults.", "prior_body": "Volatile economic conditions and changes in the market have affected, and may continue to affect, consumer spending generally and the buying habits and preferences of consumers. A significant portion of the products we sell, especially those sold under the UGG and HOKA brands, are premium retail products. The purchase of these 12 12 12 Table of Contents Table of Contents products is discretionary and is therefore highly dependent upon the level of consumer confidence and discretionary spending. Sales of these products may be adversely affected by variable economic factors, including worsening economic conditions, consumer confidence in future economic conditions, including recessionary concerns, changes to fuel, energy, labor, and healthcare costs, declines in income or asset values, and increases in consumer debt levels, inflation and interest rates, tariffs, and unemployment rates. Uncertainty in global economic conditions may result in unpredictable consumer discretionary spending trends. During an actual or perceived economic downturn, fewer consumers may shop for our products, and those who do may limit the amount of their purchases or seek less costly substitutes for our products. As a result, we could be required to reduce the price we can charge for our products or increase our marketing and promotional expenses to generate additional demand for our products. In either case, these changes could reduce our sales and profitability, which could have a material adverse effect on our financial condition and results of operations. We sell a significant portion of our products through higher-end specialty and department store retailers, as well as through online marketplaces. The businesses of these customers may be affected by factors such as changes in economic conditions, ongoing geopolitical conflicts and uncertainties, fluctuations in foreign currency exchange rates, failures or instability in the US banking system, reduced consumer demand for premium products, decreases in available credit, and increased competition. If our customers face financial difficulties, it could have an adverse effect on our estimated allowances and reserves, and potentially result in us losing key customers." }, { "status": "MODIFIED", "current_title": "diminished.", "prior_title": "The footwear, apparel, and accessories industry is subject to rapid changes in consumer preferences, and if we do not accurately anticipate and promptly respond to consumer demand and spending patterns, including by successfully introducing new products, we could lose sales, our relationships with customers could be harmed, and our brand loyalty could be diminished.", "similarity_score": 0.529, "confidence": "low", "key_changes": [ "Reworded sentence: \"The footwear, apparel, and accessories industry is subject to rapid changes in consumer preferences and fashion tastes, which makes it difficult to anticipate demand for our products and forecast our results of operations.\"" ], "current_body": "The footwear, apparel, and accessories industry is subject to rapid changes in consumer preferences and fashion tastes, which makes it difficult to anticipate demand for our products and forecast our results of operations. Our success depends, in part, on brand loyalty, and there can be no assurance that consumers will continue to prefer our brands. Consumer demand for our products relies on the continued strength of our brands, which in turn depends on our ability to anticipate, understand, and respond promptly to evolving preferences, fashion trends, and consumer spending patterns with appealing merchandise and effective brand-building initiatives. As our brands and product offerings evolve, our products must appeal to a broader and more diverse range of consumers whose preferences cannot be predicted with certainty. New products may not achieve market acceptance, including due to pricing that consumers are unwilling to bear, or our brands may fall out of favor, which could impede our ability to maintain or grow sales, adversely affect brand perception, and negatively impact our results of operations. If we do not effectively respond to these changes, we could experience reduced sales and pressure on our gross profit as a percentage of net sales (gross margin), including as a result of reduced pricing power and increased reliance on promotional activity. The value of our brands is also driven by evolving consumer perceptions, including shifting ethical, political, or social standards. Concerns related to product pricing, quality, design, technical performance, components or materials (including sustainability), customer service, or the effectiveness of our brand loyalty initiatives, including loyalty programs, could result in negative perceptions, diminished consumer engagement, and a loss of brand loyalty or value. These risks may be amplified by adverse publicity concerning us or our products, brands, marketing campaigns, partners, or endorsers, particularly where social media and digital marketing channels accelerate the dissemination, amplification, or persistence of negative claims, regardless of their accuracy, which could harm our reputation and sales and have a material adverse effect on our business. In addition, actions or statements by third‑party partners, collaborators, or organizations with which we are associated, including in connection with social or political issues, could lead to consumer backlash, operational disruptions, or reputational harm. If our brand- related initiatives, including loyalty programs, fail to drive sustained consumer engagement or incremental demand, or involve increased costs or operational complexity that negatively affect customer perceptions, we could experience reduced sales and pressure on our gross margin, adversely affecting our results of operations.", "prior_body": "The footwear, apparel, and accessories industry is subject to rapid changes in consumer preferences and fashion tastes, which make it difficult to anticipate demand for our products and forecast our financial results. Our success is driven to some extent by brand loyalty, and there can be no assurance consumers will continue to prefer our brands. Consumer demand for our products depends in part on the continued strength of our brands, which in turn depends on our ability to anticipate, understand, and promptly respond to the rapidly changing preferences and fashion tastes, as well as consumer spending patterns, with appealing merchandise. As our brands and product offerings evolve, it is necessary for our products to appeal to an even broader range of consumers whose preferences cannot be predicted with certainty. New footwear models that we introduce may not be successful with consumers or our brands may fall out of favor with consumers. If we are unable to anticipate, identify, or react appropriately to changes in consumer preferences, our revenues may decrease, our brands’ image may suffer, our operating performance may decline, and we may not be able to execute our growth plans. Even if we develop and manufacture new footwear products and collaborations that consumers find appealing, their ultimate success may depend on our pricing, and we may set the prices of new styles too high for the market to bear. Further, the value of our brands is based on evolving consumer perceptions, including as a result of shifting ethical, political or social standards, and concerns with respect to product pricing, quality, design, technical performance, components or materials (including their sustainability), or customer service could result in negative perceptions and the loss of brand loyalty and value. These concerns may be exacerbated by negative publicity regarding us or our products, brands, marketing campaigns, partners, or endorsers, which could adversely affect our reputation and sales regardless of the accuracy of such claims. Social media and digital marketing campaigns, which accelerate the dissemination of information, can increase the challenges of containing negative claims. If consumers perceive our brands negatively, whether or not warranted, our brand image would become tarnished and our products would become less desirable, which could have a material adverse effect on our business. Failure to gain market acceptance for new products could impede our ability to maintain or grow current revenue levels, reduce profits, adversely affect the image of our brands, erode our competitive position, and result in long-term harm to our business and financial results." }, { "status": "MODIFIED", "current_title": "have a material adverse effect on our results of operations.", "prior_title": "Our financial success is influenced by the success of our customers, and the loss of a key customer could have a material adverse effect on our financial condition and results of operations.", "similarity_score": 0.526, "confidence": "low", "key_changes": [ "Reworded sentence: \"Much of our financial success is related to the ability of our customers in the wholesale channel, including international distributors and retail partners, to effectively market and sell our brands to consumers.\"" ], "current_body": "Much of our financial success is related to the ability of our customers in the wholesale channel, including international distributors and retail partners, to effectively market and sell our brands to consumers. These relationships are typically governed by contractual arrangements. If a customer fails to meet contractual obligations, satisfy our expectations and standards, or experiences operational or financial difficulties, it may be challenging and time-consuming to identify and transition to an acceptable alternative. In addition, disputes under these arrangements could result in litigation, arbitration, settlement costs, or operational disruptions. We may also be adversely affected by our customers’ actions or omissions, including failures to comply with applicable laws, regulatory requirements, labor or employment standards, or our policies. Such conduct could harm our reputation, subject us to regulatory scrutiny or liability, disrupt our relationships with other customers and business partners, and adversely affect demand for our products. Transitioning away from an existing customer, whether due to performance or compliance concerns, may result in lost sales, significant transition costs, and operational disruption as we identify, onboard, and integrate replacement distribution or retail partners, and there can be no assurance that a replacement will generate comparable or improved results. We face the risk that key customers may not increase their business with us as anticipated, may significantly reduce purchases, or may terminate their relationships with us. However, no single customer accounted for 10.0% or more of our total net sales during fiscal year 2026. The failure to increase sales to these customers could negatively affect our growth prospects, and any reduction or loss of their business could materially and adversely affect our net sales and results of operations, particularly if we are unable to offset such declines through our DTC channel. As of March 31, 2026, one customer represents 18.5% of trade accounts receivable, net, which is generally unsecured and exposes us to collection risk that could affect our results of operations and liquidity. We rely on customer purchase orders and delivery schedules for forecasting sales and results of operations. If customers postpone, cancel, reduce, or discontinue orders, we may fail to meet our forecasts. These risks may be exacerbated by structural changes in the retail industry including shifts in technology, consumer and wholesale partner purchasing behavior, economic conditions, and a shrinking retail footprint. The loss of a key customer, or a significant reduction in orders, could result in lower sales, excess inventory and related write-downs, and materially and adversely affect our financial condition or results of operations. In addition, a key customer may liquidate excess inventory through discounted channels, including unauthorized sellers, which could negatively impact brand perception and divert demand from our authorized distribution channels.", "prior_body": "Much of our financial success is related to the ability of our customers, which include our retailer and distributor partners, to successfully market and sell our brands to consumers. If a customer fails to satisfy contractual obligations or meet our expectations, or experiences operational issues, it may be difficult to locate an acceptable alternative. Any disruption to these relationships may result in increased costs or loss of customers. In addition, there is no guarantee a new customer will generate results that are more favorable than the terminated party. We face a risk that key customers may not increase their business with us as we expect or may significantly decrease their business with us or terminate our relationship. Although no single customer accounted for 10.0% or more of our total net sales during fiscal year 2025, our top ten customers made up 23.7% of total net sales. The failure to increase sales with our key customers would have a negative effect on our growth prospects, and any decrease or loss of these customers’ business could result in a material decrease in our net sales and net income if we are unable to capture these sales through our DTC channel. Further, as of March 31, 2025, we have one customer that represents 13.6% of trade accounts receivable, net. Trade accounts receivable, net are typically unsecured and thus subject us to a risk that we will be unable to timely collect on amounts owed, which could affect our revenue and liquidity. Sales to our customers are on an order-by-order basis and may be cancelled or rescheduled by our customers. We rely on purchase order delivery dates as a key factor in forecasting our sales and earnings, and if our customers postpone, reduce, or discontinue purchases from us, we could fail to meet our forecasted results. These risks have been exacerbated as our key customers are impacted by significant structural changes to the retail industry fueled by changing technology, consumer and wholesale partner purchasing behavior, and economic conditions, as well as a shrinking retail footprint. These trends have been, and may in the future be, intensified by a pandemic or other public health emergency. We may lose key customers if they fail to manage the effect of this rapidly changing retail environment. Any loss of one of these key customers, or a significant reduction in purchases from one of these customers, could result in a significant decline in sales, write-downs of excess inventory, or pressure to discount our products, any of which could have a material adverse effect on our financial condition or results of operations. Further, a key customer may dispose of their excess inventories to consumers or unauthorized sellers at significantly reduced prices, which may put pressure on us to reduce our prices to compete, or cause consumers to shift their purchasing decisions away from our authorized sellers entirely. 15 15 15 Table of Contents Table of Contents" }, { "status": "MODIFIED", "current_title": "have a material adverse effect on our financial condition and results of operations.", "prior_title": "If we are unsuccessful at managing product manufacturing decisions to offset the inherent seasonality of our business, we may be unable to accurately forecast our inventory and working capital requirements, which may have a material adverse effect on our financial condition and results of operations.", "similarity_score": 0.514, "confidence": "low", "key_changes": [ "Reworded sentence: \"The footwear, apparel, and accessories industry is highly competitive and subject to rapidly changing consumer preferences.\"", "Reworded sentence: \"For example, if we overestimate demand for any products or styles, we may be forced to increase promotional activity or adjust pricing to sell excess inventories, which would result in lower sales and reduced gross margin, and we may not be able to recover our investment in the development of new styles and product lines.\"" ], "current_body": "The footwear, apparel, and accessories industry is highly competitive and subject to rapidly changing consumer preferences. If we are unable to compete effectively, we could experience a decline in market share, reduced demand for our products, pricing pressure, or damage to our reputation, which could have a material adverse effect on our financial condition and results of operations. Competition in our markets is influenced by factors such as Table of Contents 14brand recognition, product innovation and performance, pricing, speed‑to‑market, marketing effectiveness, use of data analytics and AI, access to manufacturing capacity, and control of distribution channels.Our competitors include both established global brands and newer market entrants, including competitors whose broader product assortments and higher sales volumes may be more important to certain customers. We believe that the growth and visibility of our HOKA brand and UGG brand have attracted competitors specifically targeting the categories in which we operate. Barriers to entry have been reduced by access to offshore manufacturing and evolving technologies, allowing competitors to develop and scale products more quickly and at lower cost. Some of our competitors also have substantially greater financial, technological, manufacturing, marketing, and distribution resources than we do, as well as broader brand awareness, which may enable them to compete more effectively on price, accelerate product development, leverage advanced data analytics or AI, adapt to technological changes, and withstand periods of excess inventory or reduced consumer demand. As a result, we face ongoing competition for customer relationships and distribution channels, including competition for preferred access to key retail accounts, shelf space, and digital visibility.Consistent with these dynamics, we have experienced, and expect to continue to experience, pricing and promotional pressure across our brands and channels, particularly during periods of elevated industry inventory levels or inflationary pressure. Increased discounting or promotional activity by competitors may require us to reduce prices or increase promotions to remain competitive, negatively affecting our gross margin and results of operations, and could cause consumers to shift purchases to competing products. In addition, many of our key wholesale customers face intense competitive pressures, and deterioration in their financial condition could adversely affect their ability to do business with us.If we are unsuccessful at managing inventory planning, forecasting, and global supply chain execution, we may be unable to accurately forecast our inventory and working capital requirements, which may have a material adverse effect on our financial condition and results of operations.Like other companies in our industry, we have an extended design and manufacturing process, which involves product design, material purchases, inventory accumulation and the subsequent sale of the inventories, and accounts receivable collection. This cycle requires us to incur significant expenses relating to the design, manufacturing, and marketing of our products in advance of the realization of sales, and results in significant liquidity requirements and working capital fluctuations throughout our fiscal year, which may be amplified by supplier performance issues and broader supply chain constraints. As a result, these liquidity and working capital demands may limit our ability to adjust inventory levels and respond efficiently to changes in consumer demand, particularly during periods of macroeconomic uncertainty. Our forecasting processes rely on assumptions, data, and systems that may not accurately reflect future consumer or customer demand, or supply chain conditions, including manufacturing capacity, raw material availability, and logistics constraints. Further, variability and constraints within our global supply chain may drive higher inventory procurement positions that could negatively affect our working capital and gross margin as a result of selling excess quantities through close out channels. As a result, our inventory levels, working capital requirements, and results of operations may be adversely affected by a number of factors, including: •constraints or inefficiencies in transportation capacity, delivery timing, inventory flow, or production scheduling, which may contribute to uneven inventory receipts, elevated inventory levels, or delays in fulfilling demand;•unfavorable or unexpected weather patterns that affect consumer demand for seasonally-driven products, particularly within our UGG brand, which may be intensified by the effects of climate change;•changes in consumer preferences, discretionary spending patterns, prevailing fashion trends, and pricing pressure that may require increased promotional activity to sell inventory;•macroeconomic conditions, including inflation, interest rate volatility, or global economic uncertainty, that may affect consumer purchasing behavior, supplier capacity, or logistics costs; and•market acceptance of our products and competing offerings, and variability in product availability. The evolution and expansion of our brands and product offerings have made our inventory management activities more challenging. For example, if we overestimate demand for any products or styles, we may be forced to increase promotional activity or adjust pricing to sell excess inventories, which would result in lower sales and reduced gross margin, and we may not be able to recover our investment in the development of new styles and product lines. On the other hand, if we underestimate demand, or if our independent manufacturing facilities are unable to supply Table of Contents 14 Table of Contents 14 Table of Contents 14 brand recognition, product innovation and performance, pricing, speed‑to‑market, marketing effectiveness, use of data analytics and AI, access to manufacturing capacity, and control of distribution channels.Our competitors include both established global brands and newer market entrants, including competitors whose broader product assortments and higher sales volumes may be more important to certain customers. We believe that the growth and visibility of our HOKA brand and UGG brand have attracted competitors specifically targeting the categories in which we operate. Barriers to entry have been reduced by access to offshore manufacturing and evolving technologies, allowing competitors to develop and scale products more quickly and at lower cost. Some of our competitors also have substantially greater financial, technological, manufacturing, marketing, and distribution resources than we do, as well as broader brand awareness, which may enable them to compete more effectively on price, accelerate product development, leverage advanced data analytics or AI, adapt to technological changes, and withstand periods of excess inventory or reduced consumer demand. As a result, we face ongoing competition for customer relationships and distribution channels, including competition for preferred access to key retail accounts, shelf space, and digital visibility.Consistent with these dynamics, we have experienced, and expect to continue to experience, pricing and promotional pressure across our brands and channels, particularly during periods of elevated industry inventory levels or inflationary pressure. Increased discounting or promotional activity by competitors may require us to reduce prices or increase promotions to remain competitive, negatively affecting our gross margin and results of operations, and could cause consumers to shift purchases to competing products. In addition, many of our key wholesale customers face intense competitive pressures, and deterioration in their financial condition could adversely affect their ability to do business with us.If we are unsuccessful at managing inventory planning, forecasting, and global supply chain execution, we may be unable to accurately forecast our inventory and working capital requirements, which may have a material adverse effect on our financial condition and results of operations.Like other companies in our industry, we have an extended design and manufacturing process, which involves product design, material purchases, inventory accumulation and the subsequent sale of the inventories, and accounts receivable collection. This cycle requires us to incur significant expenses relating to the design, manufacturing, and marketing of our products in advance of the realization of sales, and results in significant liquidity requirements and working capital fluctuations throughout our fiscal year, which may be amplified by supplier performance issues and broader supply chain constraints. As a result, these liquidity and working capital demands may limit our ability to adjust inventory levels and respond efficiently to changes in consumer demand, particularly during periods of macroeconomic uncertainty. Our forecasting processes rely on assumptions, data, and systems that may not accurately reflect future consumer or customer demand, or supply chain conditions, including manufacturing capacity, raw material availability, and logistics constraints. Further, variability and constraints within our global supply chain may drive higher inventory procurement positions that could negatively affect our working capital and gross margin as a result of selling excess quantities through close out channels. As a result, our inventory levels, working capital requirements, and results of operations may be adversely affected by a number of factors, including: •constraints or inefficiencies in transportation capacity, delivery timing, inventory flow, or production scheduling, which may contribute to uneven inventory receipts, elevated inventory levels, or delays in fulfilling demand;•unfavorable or unexpected weather patterns that affect consumer demand for seasonally-driven products, particularly within our UGG brand, which may be intensified by the effects of climate change;•changes in consumer preferences, discretionary spending patterns, prevailing fashion trends, and pricing pressure that may require increased promotional activity to sell inventory;•macroeconomic conditions, including inflation, interest rate volatility, or global economic uncertainty, that may affect consumer purchasing behavior, supplier capacity, or logistics costs; and•market acceptance of our products and competing offerings, and variability in product availability. The evolution and expansion of our brands and product offerings have made our inventory management activities more challenging. For example, if we overestimate demand for any products or styles, we may be forced to increase promotional activity or adjust pricing to sell excess inventories, which would result in lower sales and reduced gross margin, and we may not be able to recover our investment in the development of new styles and product lines. On the other hand, if we underestimate demand, or if our independent manufacturing facilities are unable to supply brand recognition, product innovation and performance, pricing, speed‑to‑market, marketing effectiveness, use of data analytics and AI, access to manufacturing capacity, and control of distribution channels. Our competitors include both established global brands and newer market entrants, including competitors whose broader product assortments and higher sales volumes may be more important to certain customers. We believe that the growth and visibility of our HOKA brand and UGG brand have attracted competitors specifically targeting the categories in which we operate. Barriers to entry have been reduced by access to offshore manufacturing and evolving technologies, allowing competitors to develop and scale products more quickly and at lower cost. Some of our competitors also have substantially greater financial, technological, manufacturing, marketing, and distribution resources than we do, as well as broader brand awareness, which may enable them to compete more effectively on price, accelerate product development, leverage advanced data analytics or AI, adapt to technological changes, and withstand periods of excess inventory or reduced consumer demand. As a result, we face ongoing competition for customer relationships and distribution channels, including competition for preferred access to key retail accounts, shelf space, and digital visibility. Consistent with these dynamics, we have experienced, and expect to continue to experience, pricing and promotional pressure across our brands and channels, particularly during periods of elevated industry inventory levels or inflationary pressure. Increased discounting or promotional activity by competitors may require us to reduce prices or increase promotions to remain competitive, negatively affecting our gross margin and results of operations, and could cause consumers to shift purchases to competing products. In addition, many of our key wholesale customers face intense competitive pressures, and deterioration in their financial condition could adversely affect their ability to do business with us.", "prior_body": "Like other companies in our industry, we have an extended design and manufacturing process, which involves product design, material purchases, inventory accumulation and the subsequent sale of the inventories, and accounts receivable collection. This cycle requires us to incur significant expenses relating to the design, manufacturing, and marketing of our products in advance of the realization of revenue from sales, and results in significant liquidity requirements and working capital fluctuations throughout our fiscal year. Because this cycle involves long lead times, which require us to make manufacturing decisions months in advance of an anticipated purchasing decision by the consumer, it is challenging to manage our inventory and working capital requirements. Further, supply chain disruptions may drive higher inventory procurement positions that could negatively affect our 13 13 13 Table of Contents Table of Contents gross profit as a percentage of net sales (gross margin) as a result of selling excess quantities though close out channels. Further, once manufacturing decisions are made, it is difficult to predict and timely adjust expenses, accurately forecast our financial results, and meet the expectations of analysts and investors, including as a result of: •the effects of unfavorable or unexpected weather patterns on consumer spending and demand for our products, as the sales of a majority of our UGG brand products are inherently seasonal and the effects of climate change may pronounce these conditions; •changes in consumer preferences, tastes, discretionary spending, and prevailing fashion trends; •market acceptance of our current products and new products, and of competitive products; •the competitive environment, including pricing pressure from reduced pricing of competitive products, which may cause consumers to shift their purchasing decisions away from our products; •delays in resource or product availability from supply chain disruptions; and •uncertain macroeconomic and political conditions. The evolution and expansion of our brands and product offerings have made our inventory management activities more challenging. For example, if we overestimate demand for any products or styles, we may be forced to incur significant markdowns or sell excess inventories at reduced prices, which would result in lower revenues and reduced gross margin, and we may not be able to recover our investment in the development of new styles and product lines. On the other hand, if we underestimate demand, or if our independent manufacturing facilities are unable to supply products in sufficient quantities, we may experience inventory shortages that may prevent us from fulfilling customer orders or result in us delaying shipments to customers. If that occurred, we could lose sales, our relationships with customers could be harmed, and our brand loyalty could be diminished. In either event, these factors could have a material adverse effect on our financial condition and results of operations." }, { "status": "MODIFIED", "current_title": "related regulations, have adversely affected, and could in the future adversely affect, our business.", "prior_title": "Climate change, natural disasters, public health issues, or other events beyond our control, as well as related regulations, have adversely affected, and could in the future adversely affect, our business.", "similarity_score": 0.506, "confidence": "low", "key_changes": [ "Reworded sentence: \"Natural disasters and other catastrophic events, including those associated with climate change and extreme weather conditions, may disrupt our operations, supply chain, international markets, and the global economy.\"" ], "current_body": "Natural disasters and other catastrophic events, including those associated with climate change and extreme weather conditions, may disrupt our operations, supply chain, international markets, and the global economy. Our business is subject to interruption from events such as extreme weather, power shortages, pandemics, war, political instability, terrorism, and failures of infrastructure or communications systems. Although we maintain disaster and business continuity plans designed to support critical operations and information systems, these events could disrupt our operations, impair employee availability, damage facilities, interrupt supply chains, or compromise the integrity of our IT systems, which could materially increase costs, reduce sales, or otherwise adversely affect our business continuity. In addition, climate-related regulatory developments and evolving standards may require us to incur significant capital expenditures or other costs to enhance the resiliency of our infrastructure, comply with legal requirements, or implement mitigation measures. We may also experience increased costs for energy, transportation, raw materials, production, and insurance, including higher premiums or deductibles. Our insurance coverage may not be sufficient to cover all losses or may not remain available on acceptable terms. Further, severe weather events, health crises, or other widespread disruptions may reduce consumer demand, impair the ability of our manufacturers, third-party distributors, or other partners to operate effectively, or disrupt the supply of key raw materials, any of which could adversely affect our results of operations.", "prior_body": "Natural disasters or other catastrophic events, including the effects of climate change or a pandemic, may damage or disrupt our operations, international markets, and the global economy. Our operations are subject to interruption from extreme weather events, power shortages, pandemics, terrorism, political instability, telecommunications failures, cyber-attacks, war, and other events beyond our control. Although we maintain disaster recovery plans, such events could disrupt our operations, including through the inability of talent to work, loss of life, and adverse effects on supply chains, power, infrastructure and the integrity of IT systems, any of which could materially increase our costs and expenses, decrease sales, and disrupt our business continuity. We could incur significant capital expenditures and other costs to improve the climate-related resiliency of our infrastructure and otherwise prepare for, respond to, and mitigate the effects of climate change, including compliance with evolving, and at times inconsistent, laws and regulations. We could also experience increased costs for energy, 18 18 18 Table of Contents Table of Contents production, transportation, raw and other materials, as well as higher insurance premiums and deductibles, which could adversely affect our operations. Our insurance may not be sufficient to cover losses that we may sustain. Any event that disrupts our operations or those of our partners or customers could have a material adverse effect on our business, results of operations and financial condition. Any assessment of the potential impact of future climate change legislation, regulations, or industry standards, as well as any international treaties and accords, is uncertain given the wide scope of potential regulatory change in the countries in which we operate. These events could also adversely affect the supply of raw materials, including sheepskin and leather, disrupt the operation of our supply chain and the productivity of our contract manufacturers, increase our production costs, impose capacity restraints, and affect the types of products consumers purchase. Further, public health issues and related regulatory responses may reduce demand for certain products, deteriorate our ability, or the ability of our customers, to operate in affected regions, and result in the failure of key business partners to provide services for our efficient operations, including the inability of our manufacturers or third-party distributors to timely fulfill their obligations to us, any of which would adversely affect our business, results of operations and financial condition." }, { "status": "MODIFIED", "current_title": "adversely affect our results of operations.", "prior_title": "Our reliance on independent manufacturers and suppliers located primarily in Southeast Asia subjects us to risks associated with complex and evolving international trade policies, regulatory environments, and geopolitical relations that could materially increase our costs, disrupt our global supply chain, and adversely affect our financial performance.", "similarity_score": 0.496, "confidence": "low", "key_changes": [ "Reworded sentence: \"The production of our finished goods is outsourced to independent manufacturers, the majority of which are in Southeast Asia.\"" ], "current_body": "The production of our finished goods is outsourced to independent manufacturers, the majority of which are in Southeast Asia. During fiscal year 2026, production of our finished goods was predominantly from Vietnam and Indonesia, while less than 5% was from China or any other individual country. As a result, we are exposed to geographic concentration risk arising from regional and global economic conditions, changes in diplomatic and trade relationships (including the imposition of new or increased tariffs), political and social instability, armed conflict, disease outbreaks, natural disasters, and other regulatory, environmental, and geopolitical developments. The majority of raw materials and components used by our independent manufacturers are sourced from designated suppliers, and tariffs, duties, or other trade restrictions may be imposed, modified, or expanded with limited notice. These measures could require us or our independent manufacturers to seek alternative sourcing options that may not be available in sufficient quantities, at acceptable quality levels, or in a timely manner. Evolving international trade dynamics could materially increase our cost of goods sold, disrupt logistics or inventory flows, adversely affect product pricing and demand, and reduce our gross margin. Customs authorities may also challenge our tariff classifications or treatment of certain products, resulting in additional costs or penalties. In addition, certain tariffs imposed under the International Emergency Economic Powers Act have been invalidated by a recent US Supreme Court decision, and additional tariffs may be invalidated, modified, or refunded in the future. As a result, we may face uncertainty regarding the treatment of tariff-related costs, including the potential recovery or refund of tariff amounts previously paid or partially reflected in selective pricing actions or cost-sharing arrangements. These and other judicial, regulatory, or trade policy developments could increase compliance complexity, create cost volatility, impair our ability to plan sourcing, pricing, and inventory strategies, and result in disputes, claims, unrecoverable costs, and reputational harm, regardless of the ultimate outcome. In addition to trade-related risks, our international operations and independent manufacturers are subject to regulatory, operational, and reputational risks. Although we require compliance with environmental, labor, ethical, health, safety, and other business standards and conduct periodic audits, we do not directly control the practices of our independent manufacturers or suppliers. As we continue to diversify within Southeast Asia, monitoring compliance across a broader supplier base may be more complex. Any noncompliance could result in product Table of Contents 21recalls, regulatory penalties, seizure or forfeiture of goods, reputational harm, termination of supplier relationships, violations of US or international trade laws, increased costs, supply chain disruption, or the loss of import privileges.Our international operations and independent manufacturers are also exposed to additional risks, including:•logistics, infrastructure, transportation, and distribution constraints, including raw material availability, and cost volatility related to fuel costs, labor disputes, inflation, port congestion, or geopolitical or climate‑related disruptions;•restrictions on fund repatriation or foreign currency volatility;•local labor practices, workforce availability, or holidays;•counterfeit, unauthorized or misclassified materials, or product integrity or compliance risks;•health-related disruptions, including disease outbreaks; and•adverse consumer perceptions of goods sourced from certain countries, including as a result of geopolitical or social conditions.Although we pursue mitigation strategies, including selective pricing actions and cost-sharing arrangements with independent manufacturers, these measures may not fully offset trade-related and regulatory cost increases. If such strategies are ineffective, it could materially and adversely affect our business, financial condition, and results of operations.Our sales in international markets are subject to a variety of legal, regulatory, political, cultural, and economic risks that may adversely affect our results of operations.Our ability to capitalize on growth in new international markets and to maintain the current level of operations in our existing international markets is subject to risks associated with international operations that could adversely affect our results of operations. These risks include:•foreign currency exchange rate fluctuations between the US dollar and primarily the currencies of Europe, Asia, Canada, and Latin America affect the prices at which products are sold to international consumers and our reported results;•limitations on our ability to move currency out of international markets or repatriate earnings;•burdens of complying with a variety of international laws and regulations, which may change unexpectedly, and the interpretation and application of such laws and regulations;•legal costs related to defending allegations of non-compliance with international laws;•inability to import products into a foreign country;•difficulties associated with promoting and marketing products in unfamiliar markets and cultures; •political or economic uncertainty or instability, which may disrupt the global economy and reduce consumer spending, which could have a material adverse effect on our business, particularly for our HOKA and UGG brands; •anti-American sentiment in international markets in which we operate;•changes in diplomatic and trade relationships between the US and other countries; •general economic fluctuations in international markets; and•challenges associated with local laws, regulations, and business practices, including employment, tax, and data privacy requirements.Global geopolitical developments, including armed conflicts, escalating global tensions, and related disruptions, have resulted in, and could continue to result in, instability and heightened volatility in global markets. We conduct business outside the US, which exposes us to foreign currency exchange rate risk, and could have a negative effect on our results of operations.We operate on a global basis, with 41.7% of our total net sales for the year ended March 31, 2026, generated from operations outside the US. As we continue to expand our international operations, our sales and expenditures in foreign currencies are expected to become increasingly material and subject to foreign currency exchange rate fluctuations. A significant portion of our international operating expenses are paid in local currencies, and our international distributors typically sell our products in local currency, which affects the price to international consumers. Many of our subsidiaries operate with their local currency as their functional currency. Foreign currency fluctuations, which can be exacerbated by volatility in global credit markets, may change the US dollar value of our purchases or sales and, when converted to US dollars, could materially affect our net sales, gross margin, and results of operations. When the US dollar strengthens relative to foreign currencies, our sales and profits Table of Contents 21 Table of Contents 21 Table of Contents 21 recalls, regulatory penalties, seizure or forfeiture of goods, reputational harm, termination of supplier relationships, violations of US or international trade laws, increased costs, supply chain disruption, or the loss of import privileges.Our international operations and independent manufacturers are also exposed to additional risks, including:•logistics, infrastructure, transportation, and distribution constraints, including raw material availability, and cost volatility related to fuel costs, labor disputes, inflation, port congestion, or geopolitical or climate‑related disruptions;•restrictions on fund repatriation or foreign currency volatility;•local labor practices, workforce availability, or holidays;•counterfeit, unauthorized or misclassified materials, or product integrity or compliance risks;•health-related disruptions, including disease outbreaks; and•adverse consumer perceptions of goods sourced from certain countries, including as a result of geopolitical or social conditions.Although we pursue mitigation strategies, including selective pricing actions and cost-sharing arrangements with independent manufacturers, these measures may not fully offset trade-related and regulatory cost increases. If such strategies are ineffective, it could materially and adversely affect our business, financial condition, and results of operations.Our sales in international markets are subject to a variety of legal, regulatory, political, cultural, and economic risks that may adversely affect our results of operations.Our ability to capitalize on growth in new international markets and to maintain the current level of operations in our existing international markets is subject to risks associated with international operations that could adversely affect our results of operations. These risks include:•foreign currency exchange rate fluctuations between the US dollar and primarily the currencies of Europe, Asia, Canada, and Latin America affect the prices at which products are sold to international consumers and our reported results;•limitations on our ability to move currency out of international markets or repatriate earnings;•burdens of complying with a variety of international laws and regulations, which may change unexpectedly, and the interpretation and application of such laws and regulations;•legal costs related to defending allegations of non-compliance with international laws;•inability to import products into a foreign country;•difficulties associated with promoting and marketing products in unfamiliar markets and cultures; •political or economic uncertainty or instability, which may disrupt the global economy and reduce consumer spending, which could have a material adverse effect on our business, particularly for our HOKA and UGG brands; •anti-American sentiment in international markets in which we operate;•changes in diplomatic and trade relationships between the US and other countries; •general economic fluctuations in international markets; and•challenges associated with local laws, regulations, and business practices, including employment, tax, and data privacy requirements.Global geopolitical developments, including armed conflicts, escalating global tensions, and related disruptions, have resulted in, and could continue to result in, instability and heightened volatility in global markets. We conduct business outside the US, which exposes us to foreign currency exchange rate risk, and could have a negative effect on our results of operations.We operate on a global basis, with 41.7% of our total net sales for the year ended March 31, 2026, generated from operations outside the US. As we continue to expand our international operations, our sales and expenditures in foreign currencies are expected to become increasingly material and subject to foreign currency exchange rate fluctuations. A significant portion of our international operating expenses are paid in local currencies, and our international distributors typically sell our products in local currency, which affects the price to international consumers. Many of our subsidiaries operate with their local currency as their functional currency. Foreign currency fluctuations, which can be exacerbated by volatility in global credit markets, may change the US dollar value of our purchases or sales and, when converted to US dollars, could materially affect our net sales, gross margin, and results of operations. When the US dollar strengthens relative to foreign currencies, our sales and profits recalls, regulatory penalties, seizure or forfeiture of goods, reputational harm, termination of supplier relationships, violations of US or international trade laws, increased costs, supply chain disruption, or the loss of import privileges. Our international operations and independent manufacturers are also exposed to additional risks, including: •logistics, infrastructure, transportation, and distribution constraints, including raw material availability, and cost volatility related to fuel costs, labor disputes, inflation, port congestion, or geopolitical or climate‑related disruptions; •restrictions on fund repatriation or foreign currency volatility; •local labor practices, workforce availability, or holidays; •counterfeit, unauthorized or misclassified materials, or product integrity or compliance risks; •health-related disruptions, including disease outbreaks; and •adverse consumer perceptions of goods sourced from certain countries, including as a result of geopolitical or social conditions. Although we pursue mitigation strategies, including selective pricing actions and cost-sharing arrangements with independent manufacturers, these measures may not fully offset trade-related and regulatory cost increases. If such strategies are ineffective, it could materially and adversely affect our business, financial condition, and results of operations.", "prior_body": "The production of finished goods is outsourced to independent manufacturers, which are primarily located in Southeast Asia, predominately in Vietnam. The majority of our raw materials and components used in the production of our products by our independent manufacturers are sourced from designated suppliers. As a result, our operations are exposed to risks arising from evolving international trade dynamics, including tariffs, import restrictions, customs disputes, retaliatory measures, shifting trade agreements and cross-border partnerships, and broader geopolitical instability. US administrations have enacted tariffs on imports, renegotiated or withdrawn from trade agreements, and implemented other restrictive measures. These changes can adversely affect sourcing costs, product pricing, inventory flow, and product demand, which could materially increase our cost of sales, adversely affect our gross margins, and reduce our competitiveness in the US and other markets. Customs authorities may also disagree with our claimed tariff treatment for certain products, resulting in unexpected costs that may negatively impact our gross margin. We cannot predict the outcome of ongoing or future trade negotiations, and any escalation of trade tensions could materially and adversely impact our business, financial condition, and results of operations, and those of our wholesale channel customers. In addition to trade-related risks, our international operations and independent manufacturers are subject to a range of regulatory, operational, and reputational risks. While we require our independent manufacturers and suppliers to adhere to environmental, labor, ethical, health, safety, and other business standards and conduct periodic audits of their operations, we do not directly control their practices. Noncompliance with applicable laws or standards could lead to product recalls, regulatory penalties, the seizure or forfeiture of our products, or reputational harm. If any of our suppliers are unable or unwilling to comply with our standards, we may be forced to terminate those relationships, which could increase our costs and disrupt our supply chain. Further, if our independent manufacturers or suppliers violate US or foreign trade laws or regulations, we may be subject to extra duties, significant monetary penalties, the seizure, and forfeiture of products we are attempting to import, or the loss of our import privileges, which could have a negative effect on our results of operations. Our international operations and independent manufacturers are also subject to other risks and uncertainties, including: •poor infrastructure and equipment shortages, which can disrupt transportation and utilities; •restrictions on the transfer of funds from foreign jurisdictions or volatile foreign exchange rates; •customary business traditions in certain countries such as local holidays, which are traditionally accompanied by elevated levels of turnover in the factories; •decreased scrutiny by custom officials for counterfeit products; •social instability and corruption, extortion, bribery, pay-offs, theft, and other fraudulent activity; •use of unauthorized or prohibited materials or reclassification of materials; •health-related disruptions, such as disease outbreaks or raw material shortages, which could impact our workforce or scarcity of raw and other materials; and •adverse changes in consumer perception of goods sourced from certain countries. Transportation and distribution costs may also be adversely affected by fluctuating demand, fuel cost volatility, labor disputes, inflation, and political, social, and economic instability. For example, we continue to experience port congestion, increased lead times, and rising freight and energy costs. Continued global geopolitical uncertainty, rising labor tensions, or climate-related disruptions further add to the complexity of global supply chain planning and resilience, and could increase distribution costs, create further capacity constraints in Europe and adversely affect our results of operations. Additionally, the increased threat of terrorist activity and heightened customs inspections have created delays in bringing imported goods to market and increased our logistics expenses. While we pursue mitigation strategies, including selective, staggered, and strategic price increases on our products in the US and by negotiating cost-sharing arrangements with our independent manufacturers, we may be unable to offset all resulting increases to our cost of goods sold, which could have a material adverse effect on our 20 20 20 Table of Contents Table of Contents business, operations, and financial condition. Further, these risks may have a material adverse impact on demand for our products." }, { "status": "MODIFIED", "current_title": "materially and adversely affect our business and results of operations.", "prior_title": "A security breach or disruption to our IT systems could materially harm our business, disrupt our operations, or result in unauthorized disclosure of sensitive information, which could damage our relationships, expose us to litigation or regulatory proceedings, or harm our reputation, any of which could materially adversely affect our business and results of operations.", "similarity_score": 0.486, "confidence": "low", "key_changes": [ "Reworded sentence: \"We store and transmit sensitive information, including personal information of customers, consumers, and employees, payment card information, and proprietary operational, financial, and strategic data.\"" ], "current_body": "We store and transmit sensitive information, including personal information of customers, consumers, and employees, payment card information, and proprietary operational, financial, and strategic data. Unauthorized access to, loss, misuse, or disclosure of such information could result in reputational harm, litigation, regulatory investigations, significant remediation costs and substantial losses. Our operations also depend on the continued performance of internal information systems and third-party technology providers, including systems utilizing data analytics and AI, to prevent unauthorized access and to respond quickly and effectively to data security incidents. Cybersecurity threats continue to evolve in frequency and sophistication, and our reliance on interconnected systems, cloud-based platforms, and third-party service providers increases the risk that a security incident affecting us or these parties could disrupt our operations. Although we invest in security controls and monitoring, these measures may not prevent all incidents or ensure timely detection. A cyber-attack, data security incident, or system disruption could materially and adversely affect our business if: •critical systems become inoperable or require significant time or cost to restore; •employees are unable to perform their duties or communicate effectively with third parties; •sensitive or confidential information is lost, misused, or disclosed without authorization; •business operations, including order placement, fulfillment, or reporting, are disrupted; •significant, unplanned investments in technology, security remediation, or recovery are required; or •we incur additional liabilities, costs, claims, or regulatory exposure. Any such event could result in reputational harm, loss of customer trust, strained relationships with partners and suppliers, litigation, fines, penalties, or regulatory actions under domestic and international data protection and privacy laws and could materially and adversely affect our business, financial condition, or results of operations.", "prior_body": "We store and transmit a significant amount of sensitive information, including the personal information of our customers and employees, credit card information, and our proprietary financial, operational, and strategic information. The loss, theft, misuse, or unauthorized disclosure or access to such information could lead to significant reputation or competitive harm, result in litigation, expose us to regulatory proceedings, and cause us to incur substantial losses. As a result, we believe our future success and growth depends, in part, on the ability of our systems, including those utilizing artificial intelligence (AI) such as generative AI, to prevent the theft, loss, misuse, or unauthorized access of this information, and to respond quickly and effectively if data security incidents occur. Data privacy and security incidents may prevent us from maintaining the privacy of this information, result in the disruption of our business, and require us to expend significant resources to secure such information and respond to incidents, any of which could materially adversely affect our business, financial condition, or results of operations. Our success also depends in part on the continued operation of our key business processes, including our IT and global communications systems. We rely on third-party IT service providers for many of our worldwide IT functions, including network, hardware, and software configuration, and on internal networks to support business processes. Any disruption to these systems or networks could, among other things, delay product fulfillment, impede personnel from performing their duties, adversely impact sales, and expose us to significant costs. Further, we could experience information silos and inefficiencies across our organization if we do not invest in appropriate operational systems and processes. If we are unable to structure our systems and processes to respond to changing business needs, or if we or our third-party providers experience a failure in these systems, our ability to accurately forecast sales, report our financial position and results of operations, or otherwise manage and operate our business could be adversely affected. The frequency, intensity, and sophistication of cyber and data security incidents have significantly increased in recent years. Like other businesses, we have experienced, and are continually at risk of, attacks and incidents. Our risk and exposure to these matters remains heightened because of, among other things, the evolving nature of these threats, the current global economic and political environment, our prominent size and scale, the advances in computer capabilities and AI, and the interconnectivity and interdependence of third parties to our systems. We 22 22 22 Table of Contents Table of Contents expend significant resources on IT and data security tools, and processes designed to protect our IT systems and information, and to ensure an effective response to any attack or incident. Whether these measures are successful, these expenditures could adversely affect on our financial condition and results of operations. Although we take the security of our IT systems seriously, there can be no assurance the measures we employ will prevent unauthorized access to our systems and information. Because the techniques used to obtain unauthorized access to IT systems are constantly evolving, we may be unable to anticipate these techniques or implement adequate protective measures in response. Cyber-attacks or data incidents could remain undetected for some period, which could result in significant harm to our systems, as well as unauthorized access to the information stored on and transmitted by our systems. A cyber-attack or other data security incident could result in significant disruption of our business such that: •critical business systems become inoperable or require considerable time or cost to restore; •personnel are unable to perform their duties or communicate with third-party partners; •it results in the loss, theft, misuse, or unauthorized disclosure of confidential information; •we are prevented from accessing information necessary to conduct our business; •we are required to make unanticipated investments in equipment, technology, or security measures; •customers cannot place or receive orders, and we are unable to timely ship orders or at all; or •we become subject to other unanticipated liabilities, costs, or claims. If any of these events were to occur, it could have a material adverse effect on our financial condition and results of operations and result in harm to our reputation. In addition, a cyber-attack or other data incident could put us at a competitive disadvantage, result in the deterioration of our customers’ confidence in our brands, cause our suppliers to reconsider their relationship with us or impose onerous contractual provisions, and subject us to litigation, liability, fines, and penalties. We could be subject to regulatory or other actions pursuant to domestic and international privacy laws, which could result in costly investigations and litigation, civil or criminal penalties, operational changes, and negative publicity that could adversely affect our reputation, as well as our results of operations and financial condition." }, { "status": "UNCHANGED", "current_title": "Our revolving credit facility agreements expose us to certain risks.", "prior_title": "Our revolving credit facility agreements expose us to certain risks.", "current_body": "From time to time, we have financed our liquidity needs in part through borrowings under revolving credit facilities. We may be unable to renew, extend, or replace our revolving credit facilities on acceptable terms, or at all, when they mature, which could reduce our available liquidity. Our ability to borrow under our revolving credit facilities may be limited if the lenders believe there has been a material adverse change to our business. In addition, our revolving credit facility agreements contain a number of customary financial covenants and restrictions, which may limit our ability to engage in transactions that would otherwise be in our best interests, or otherwise respond to changing business and economic conditions, and may therefore have a material effect on our business. Failure to comply with any of these covenants could result in a default, allowing our lenders to accelerate the timing of payments, which could have a material adverse effect on our business, operations, financial condition, and liquidity. In addition, in some cases, a default under one revolving credit facility could result in a cross-default under other facilities. Certain of our revolving credit facility agreements bear interest at a rate that varies by currency. Any increases in interest rates applicable to our borrowings would increase our cost of borrowing, which would reduce our net income and liquidity." } ] }