“We recently negotiated fall 2013 product costs and based upon the decreases in our product costs for Fall 2013, together with the adverse effect of our price increases, we made the decision to adjust our domestic pricing in mid-September on select Classic styles, retroactive to all orders shipped since July 1,” continued Mr. Martinez. “To support our loyal retailers and consumers during this challenging sales environment we made the strategic decision to pass along a portion of the upcoming savings immediately. We believe this is in the best interests of the brand and will help drive sell-through during the holiday season. ”

Division Summary

UGG Brand

UGG brand net sales for the third quarter decreased 11.6% to $332.8 million compared to $376.7 million for the same period last year. The decrease in sales was driven by lower domestic and international wholesale sales and a decline in same store sales, partially offset by an increase in sales from new retail store openings and an increase in global eCommerce sales.

Teva Brand

Teva brand net sales for the third quarter increased 22.1% to $17.9 million compared to $14.7 million for the same period last year. The sales increase was driven primarily by an increase in international distributor sales, higher international wholesale sales from the brand’s launch in Japan and higher domestic sales.

Sanuk Brand

Sanuk brand net sales for the third quarter increased 17.6% to $18.3 million compared to $15.6 million for the same period last year. The increase in sales was primarily attributable to higher domestic wholesale and eCommerce sales.

Other Brands

Combined net sales of the Company’s other brands decreased 1.1% to $7.3 million for the third quarter compared to $7.4 million for the same period last year.

Retail Stores

Sales for the retail store business, which are included in the brand sales numbers above, increased 12.8% to $39.1 million for the third quarter compared to $34.7 million for the same period last year. This increase was driven by 29 new stores opened after the third quarter of 2011, partially offset by a same store sales decrease of 13.1% for the thirteen weeks ending September 30, 2012 compared to the thirteen weeks ending October 2, 2011.

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