Deckers Outdoor (NASDAQ:DECK) today announced record financial results for the fourth quarter and fiscal year ended Dec. 31, 2003. Net sales and net earnings for the quarter increased 39% and 81%, respectively. For the full year, sales increased 22% to $121 million, and net earnings rose 465% to $9.2 million.

The growth was driven in large part by sales of the company's UGG product line of sheepskin boots. Sales of UGGs in 2003 jumped 55% over the previous year to $37 million, and the visibility of the brand has increased significantly. Most notably, Footwear News named UGG the 2003 Brand of the Year, and the boots can be found on the feet of everyone from Jessica Simpson to Oprah Winfrey.

Deckers' two other brands -- Teva and Simple -- grew more modestly. Excluding UGG, yearly sales grew 12% to $84 million.

The market is enthralled with Deckers. The stock is up 439% over the past year and currently trades at lofty multiples -- a forward P/E of 20 (based on the higher earnings-per-share guidance released today) and a price-to-sales ratio of 2.1. That is significantly pricier than industry leaders Nike (NYSE:NKE), Reebok (NYSE:RBK), and Timberland (NYSE:TBL), which trade at price-to-sales ratios of 1.7, 0.7, and 1.6, respectively.

There is no doubt that the UGG brand is very hot. But its position is vulnerable to the whims of the customer and to imitation from competition. On the earnings call, the company itself noted that there were 38 "knockoffs" of UGG boots at a recent trade show. In addition, the Financial Times recently reported that Australian manufacturers of sheepskin boots are challenging the UGG trademark in court.

For Foolish investors with a long-term investment horizon, the key question is whether Deckers has a sustainable competitive advantage that justifies its valuation. Or as Warren Buffett, chairman of Berkshire Hathaway (NYSE:BRK.A), has eloquently phrased it, investors should differentiate between companies that sell "pet rocks or hula hoops" and those that sell "Monopoly or Barbie."

To me, Deckers looks a lot more like a company selling "pet rocks" than one selling "Barbie." While the stock may still be attractive to speculators at its current price, long-term investors should steer clear.

Do you think Deckers has staying power? Let Fools know on the Deckers discussion board.

When he's not in the mountains hiking, biking, or skiing, Motley Fool contributor Salim Haji writes about stocks from his home in Denver, Colo. He owns shares of Berkshire Hathaway, but no others mentioned here.