Deckers Outdoor Corp. (NYSE:DECK)

The analysis of the annual property, plant, and equipment data reveals several key trends and insights regarding asset composition, investment, and depreciation patterns over the six-year period ending in March 2023.

Land

The value of land remained remarkably stable, holding steady at approximately US$32,864 thousand throughout the period. This indicates no significant acquisition or disposal activity related to land assets.

Building

Building assets experienced a slight decline from US$38,945 thousand in 2018 to US$35,094 thousand in 2019, and then remained relatively flat with minor fluctuations, eventually increasing slightly to US$36,191 thousand by 2023. This suggests limited capital expenditure or disposals in this category with some possible minor improvements or revaluations in later years.

Machinery and Equipment

This category shows an overall upward trend, rising from US$141,255 thousand in 2018 to US$187,754 thousand in 2023. After a dip in 2020, the values recovered strongly, indicating continued investment in machinery and equipment, possibly reflecting growth or modernization efforts.

Furniture and Fixtures

Furniture and fixtures decreased from US$38,473 thousand in 2018 to US$35,024 thousand in 2020, followed by some fluctuations and a notable increase to US$39,538 thousand in 2023. This pattern suggests some asset retirements or write-offs earlier, with renewed investment or replacement in recent years.

Computer Software

There is a consistent and significant increase in computer software assets, rising from US$72,310 thousand in 2018 to US$115,349 thousand in 2023. This reflects ongoing investments in intangible assets related to technology, indicating a strategic focus on digital capabilities and software development.

Leasehold Improvements

Leasehold improvements showed relatively minor fluctuations but an overall increase from US$107,079 thousand to US$118,351 thousand over the period. This growth points to periodic investments in improving leased properties, maintaining or enhancing operational facilities.

Construction in Progress

This asset class began with no recorded value in 2018 but rose steadily until 2020, peaking at US$17,556 thousand, then declined before surging to US$54,140 thousand in 2023. The sharp increase in 2023 suggests substantial ongoing capital projects or asset expansions nearing completion.

Gross Property and Equipment

Gross property and equipment exhibit a steady upward trajectory from US$430,925 thousand in 2018 to US$584,187 thousand in 2023. This overall growth indicates consistent capital expenditures and asset acquisitions over the evaluated years.

Accumulated Depreciation and Amortization

Accumulated depreciation increased in magnitude from -US$210,763 thousand to -US$317,508 thousand, reflecting the wear and use of assets over time. The growing negative balance corresponds with the increase in gross assets and indicates systematic allocation of asset costs across their useful lives.

Property and Equipment, Net

Net property and equipment values show a decline from US$220,162 thousand in 2018 to a low of US$206,210 thousand in 2021, followed by a rebound to US$266,679 thousand in 2023. This recovery and increase in net value may result from substantial new investments, completed construction projects, or revaluation gains outpacing depreciation charges.

In summary, the data demonstrate stable land holdings and minor building value fluctuations, robust investments in machinery and equipment, and a marked emphasis on computer software and construction projects. The rising gross asset base combined with increasing accumulated depreciation results in moderately fluctuating net asset values, with a notable recovery in recent years. These trends collectively indicate an active asset management strategy with a focus on modernization and expansion.

Average Age Ratio

The average age ratio displays a generally upward trend from March 31, 2018, through March 31, 2021, increasing from 52.95% to 60.63%. This indicates that, over this period, the property, plant, and equipment assets have, on average, aged significantly, potentially reflecting slower asset turnover or reduced investment in new assets.

From March 31, 2021, to March 31, 2023, the ratio shows a slight decreasing trend, declining from 60.63% to 57.59%. This suggests a modest rejuvenation of the asset base or increased acquisition of new property, plant, and equipment, thereby reducing the average age ratio.

Despite the recent decline, the average age ratio at the end of the period remains higher than the figure recorded at the beginning, indicating that the assets overall have aged compared to the initial observation date.

These patterns suggest a phase of asset aging followed by some reinvestment or asset replacement activity towards the later years.

Gross Property and Equipment

Over the six-year period, the gross property and equipment showed a steady increase, rising from 430,925 thousand US dollars in 2018 to 584,187 thousand US dollars in 2023. This indicates consistent investment or acquisition of fixed assets by the company.

Accumulated Depreciation and Amortization

Accumulated depreciation and amortization also increased steadily, from 210,763 thousand US dollars in 2018 to 317,508 thousand US dollars in 2023. The growth in accumulated depreciation, although expected with increased assets, highlights the aging or usage of the company's property and equipment over time.

Land

The value of land remained essentially constant, fluctuating marginally around 32,864 thousand US dollars throughout the period. This suggests no significant purchases or disposals of land during these years.

Average Age Ratio

The average age ratio of property and equipment increased from 52.95% in 2018 to peak at 60.63% in 2021, indicating that on average, the asset base was getting older over this time frame. Following 2021, the ratio slightly declined to 57.59% in 2023, which may suggest some renewal or replacement of older assets in the more recent years.