- First Quarter Revenue Increased 6% Over Last Year To
A Record $939 Million
- First Quarter Diluted EPS Up 5% to $2.50 and Adjusted Diluted EPS Up 16% to
$3.02
- Fiscal Year 2024 Adjusted Diluted Earnings Per Share
Guidance Raised, Led By Strength of Crocs Brand
BROOMFIELD, Colo., May 7, 2024
/PRNewswire/ -- Crocs, Inc. (NASDAQ: CROX), a world leader in
innovative casual footwear for all, today announced its first
quarter 2024 financial results.
"We delivered an exceptional first quarter, led by mid-teens
growth of our Crocs Brand, driven by robust consumer demand both in
North America and in international
markets." said Andrew Rees, Chief
Executive Officer. "Our record revenue, industry-leading gross
margins and the power of our diversified business enabled us to
raise our full-year adjusted diluted earnings per share
outlook."
Mr. Rees continued, "As we continue to prioritize brand health
in the North American market for HEYDUDE, and considering what we
are seeing quarter-to-date, we are reducing our revenue
expectations for the brand for the balance of the year. We are
confident in the long-term opportunity for the HEYDUDE brand and
are excited to welcome a new HEYDUDE President to fully unlock its
future potential."
Amounts referred to as "Adjusted" or "Non-GAAP" are Non-GAAP
measures and include adjustments that are described under the
heading "Reconciliation of GAAP Measures to Non-GAAP Measures." A
reconciliation of these amounts to their GAAP counterparts are
contained in the schedules below.
First Quarter 2024 Operating Results (Compared to
the Same Period Last Year)
- Consolidated revenues were $939
million, an increase of 6.2%, or 6.9% on a constant currency
basis. Direct-to-consumer ("DTC") revenues grew 11.8%, or 12.3% on
a constant currency basis. Wholesale revenues grew 3.2%, or 4.1% on
a constant currency basis.
- Gross margin was 55.6% compared to 53.9%. Adjusted gross
margin improved 180 basis points to 56.0% compared to 54.2%.
- Selling, general, and administrative expenses
("SG&A") of $296 million
increased 22.5% from $241 million,
and represented 31.5% of revenues. Adjusted SG&A of
$271 million increased 16.3% from
$233 million, and represented 28.8%
of revenues.
- Income from operations of $226
million decreased 3.6% from $235
million, resulting in operating margin of 24.1%. Adjusted
income from operations of $255
million increased 3.1% from $247
million, resulting in adjusted operating margin of
27.1%.
- Diluted earnings per share of $2.50 increased 4.6% from $2.39. Adjusted diluted earnings per share of
$3.02 increased 15.7% from
$2.61.
First Quarter 2024 Brand Summary
- Crocs Brand: Revenues increased 14.6% to $744 million, or 15.6% on a constant currency
basis.
- Channel
- DTC revenues increased 18.3% to $282
million, or 19.0% on a constant currency basis.
- Wholesale revenues increased 12.5% to $462 million, or 13.8% on a constant currency
basis.
- Geography
- North America revenues
increased 9.0% to $383 million, or
9.0% on a constant currency basis.
- International revenues increased 21.3% to $361 million, or 23.6% on a constant currency
basis.
- HEYDUDE Brand: Revenues decreased 17.2% to $195 million.
- Channel
- DTC revenues decreased 11.0% to $60
million.
- Wholesale revenues decreased 19.7% to $135 million.
Balance Sheet and Cash Flow (March 31,
2024 as compared to March 31,
2023)
- Cash and cash equivalents were $159 million compared to $126 million.
- Inventories were $392
million compared to $476
million.
- Total borrowings were $1,727
million compared to $2,283
million.
- Capital expenditures were $16
million compared to $28
million.
Financial Outlook
Second Quarter 2024
With respect to the second quarter of 2024, we expect:
- Revenues to be up 1% to 3% compared to second quarter 2023, at
currency rates as of the end of the last reported period.
- Crocs Brand to grow 7% to 9% compared to second quarter
2023.
- HEYDUDE Brand to contract (19%) to (17%) compared to second
quarter 2023.
- Adjusted operating margin of approximately 26.5%.
- Adjusted diluted earnings per share of $3.40 to $3.55.
Full Year 2024
With respect to 2024, we expect:
- Revenue growth of 3% to 5% compared to 2023, at currency rates
as of the end of the last reported period.
- Revenues for the Crocs Brand to now grow approximately 7%
to 9%.
- Revenues for the HEYDUDE Brand to now contract (10%) to
(8%).
- Adjusted operating margin of approximately 25%.
- Non-GAAP adjustments of approximately $28 million related to the implementation of a
new enterprise resource planning ("ERP") system for HEYDUDE, and
costs to transition to our new HEYDUDE distribution center in
Las Vegas, Nevada.
- Combined GAAP tax rate of approximately 21.5% and non-GAAP
effective tax rate of approximately 18.0%.
- Adjusted diluted earnings per share of $12.25 to $12.73.
Adjusted diluted earnings per share guidance does not assume any
impact from potential future share repurchases. As of March 31, 2024, the Company had $875 million remaining on its current share
repurchase authorization.
- Capital expenditures of approximately $120 million to $130
million.
Conference Call Information
A conference call to discuss first quarter 2024 results is
scheduled for today, Tuesday, May 7, 2024, at 8:30 am ET. To receive conference call details,
please register at the Investor Relations section of the Crocs
website, investors.crocs.com. The webcast will also be available
live and on replay through May 7, 2025 at this site.
About Crocs, Inc.:
Crocs, Inc. (Nasdaq: CROX), headquartered in Broomfield, Colorado, is a world leader in
innovative casual footwear for all, combining comfort and style
with a value that consumers know and love. The Company's brands
include Crocs and HEYDUDE, and its products are sold in more than
80 countries through wholesale and direct-to-consumer channels. For
more information on Crocs, Inc. visit investors.crocs.com. To learn
more about our brands, visit www.crocs.com or www.heydude.com.
Individuals can also visit
https://investors.crocs.com/news-and-events/ and follow both Crocs
and HEYDUDE on their social platforms.
Forward Looking Statements
This press release includes estimates, projections, and
statements relating to our business plans, commitments, objectives,
and expected operating results that are "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended.
These statements include, but are not limited to, statements
regarding potential impacts to our business related to cost
inflation, our financial condition, brand and liquidity outlook,
and expectations regarding our future financial results, share
repurchases, our strategy, plans, objectives, expectations
(financial or otherwise) and intentions, future financial results
and growth potential, statements regarding second quarter and full
year 2024 financial outlook and future profitability, cash flows,
and brand strength, anticipated product portfolio and our ability
to deliver sustained, highly profitable growth and create
significant shareholder value. These statements involve known and
unknown risks, uncertainties, and other factors, which may cause
our actual results, performance, or achievements to be materially
different from any future results, performances, or achievements
expressed or implied by the forward-looking statements. These risks
and uncertainties include, but are not limited to, the following:
cost inflation; current global financial conditions; the effect of
competition in our industry; our ability to effectively manage our
future growth or declines in revenues; changing consumer
preferences; our ability to maintain and expand revenues and gross
margin; our ability to accurately forecast consumer demand for our
products; our ability to successfully implement our strategic
plans; our ability to develop and sell new products; our ability to
obtain and protect intellectual property rights; the effect of
potential adverse currency exchange rate fluctuations and other
international operating risks; and other factors described in our
most recent Annual Report on Form 10-K under the heading "Risk
Factors" and our subsequent filings with the Securities and
Exchange Commission. Readers are encouraged to review that section
and all other disclosures appearing in our filings with the
Securities and Exchange Commission.
All information in this document speaks only as of May 7,
2024. We do not undertake any obligation to update publicly any
forward-looking statements, whether as a result of the receipt of
new information, future events, or otherwise, except as required by
applicable law.
Category:Investors
CROCS, INC. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(in thousands,
except per share data)
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Revenues
|
$
938,633
|
|
$
884,166
|
Cost of
sales
|
416,556
|
|
407,796
|
Gross profit
|
522,077
|
|
476,370
|
Selling, general and
administrative expenses
|
295,648
|
|
241,442
|
Income from
operations
|
226,429
|
|
234,928
|
Foreign currency
losses, net
|
(2,273)
|
|
(403)
|
Interest
income
|
416
|
|
171
|
Interest
expense
|
(30,563)
|
|
(42,637)
|
Other income (expense),
net
|
20
|
|
(293)
|
Income before income
taxes
|
194,029
|
|
191,766
|
Income tax
expense
|
41,575
|
|
42,223
|
Net income
|
$
152,454
|
|
$
149,543
|
Net income per common
share:
|
|
|
|
Basic
|
$
2.52
|
|
$
2.42
|
Diluted
|
$
2.50
|
|
$
2.39
|
Weighted average common
shares outstanding:
|
|
|
|
Basic
|
60,564
|
|
61,836
|
Diluted
|
61,054
|
|
62,629
|
CROCS, INC. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands,
except share and par value amounts)
|
|
|
March 31,
2024
|
|
December 31,
2023
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
159,286
|
|
$
149,288
|
Restricted cash -
current
|
2
|
|
2
|
Accounts receivable,
net of allowances of $28,463 and $27,591, respectively
|
481,521
|
|
305,747
|
Inventories
|
391,953
|
|
385,054
|
Income taxes
receivable
|
2,972
|
|
4,413
|
Other
receivables
|
26,352
|
|
21,071
|
Prepaid expenses and
other assets
|
44,313
|
|
45,129
|
Total current
assets
|
1,106,399
|
|
910,704
|
Property and equipment,
net of accumulated depreciation of $129,109 and $120,510,
respectively
|
242,859
|
|
238,315
|
Intangible assets, net
of accumulated amortization of $144,384 and $138,611,
respectively
|
1,787,600
|
|
1,792,562
|
Goodwill
|
711,553
|
|
711,588
|
Deferred tax assets,
net
|
647,748
|
|
667,972
|
Restricted
cash
|
3,734
|
|
3,807
|
Right-of-use
assets
|
280,182
|
|
287,440
|
Other assets
|
15,530
|
|
31,446
|
Total
assets
|
$
4,795,605
|
|
$
4,643,834
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
236,289
|
|
$
260,978
|
Accrued expenses and
other liabilities
|
247,268
|
|
285,771
|
Income taxes
payable
|
82,247
|
|
65,952
|
Current
borrowings
|
—
|
|
23,328
|
Current operating lease
liabilities
|
62,757
|
|
62,267
|
Total current
liabilities
|
628,561
|
|
698,296
|
Deferred tax
liabilities, net
|
12,874
|
|
12,912
|
Long-term income taxes
payable
|
558,913
|
|
565,171
|
Long-term
borrowings
|
1,727,153
|
|
1,640,996
|
Long-term operating
lease liabilities
|
267,785
|
|
269,769
|
Other
liabilities
|
3,264
|
|
2,767
|
Total
liabilities
|
3,198,550
|
|
3,189,911
|
Commitments and
contingencies
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock, par
value $0.001 per share, 250.0 million shares authorized, 110.3
million
and 110.1 million issued, 60.7 million and 60.5 million
outstanding, respectively
|
110
|
|
110
|
Treasury stock, at
cost, 49.6 million and 49.6 million shares,
respectively
|
(1,894,782)
|
|
(1,888,869)
|
Additional paid-in
capital
|
834,433
|
|
826,685
|
Retained
earnings
|
2,764,219
|
|
2,611,765
|
Accumulated other
comprehensive loss
|
(106,925)
|
|
(95,768)
|
Total stockholders'
equity
|
1,597,055
|
|
1,453,923
|
Total liabilities and
stockholders' equity
|
$
4,795,605
|
|
$
4,643,834
|
|
|
|
|
CROCS, INC. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in
thousands)
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
152,454
|
|
$
149,543
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
16,161
|
|
13,136
|
Operating lease
cost
|
20,244
|
|
18,199
|
Share-based
compensation
|
7,582
|
|
7,464
|
Asset
impairment
|
24,081
|
|
—
|
Other non-cash
items
|
11,950
|
|
383
|
Changes in operating
assets and liabilities, net of acquired assets and assumed
liabilities:
|
|
|
|
Accounts
receivable
|
(179,899)
|
|
(122,144)
|
Inventories
|
(8,309)
|
|
(5,220)
|
Prepaid expenses and
other assets
|
(7,843)
|
|
(35,859)
|
Accounts payable,
accrued expenses and other liabilities
|
(62,563)
|
|
(31,824)
|
Right-of-use assets
and operating lease liabilities
|
(20,265)
|
|
(17,421)
|
Income
taxes
|
18,833
|
|
33,674
|
Cash provided by (used
in) operating activities
|
(27,574)
|
|
9,931
|
Cash flows from
investing activities:
|
|
|
|
Purchases of property,
equipment, and software
|
(15,750)
|
|
(27,581)
|
Cash used in investing
activities
|
(15,750)
|
|
(27,581)
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
borrowings
|
78,156
|
|
214,634
|
Repayments of
borrowings
|
(16,405)
|
|
(256,000)
|
Deferred debt issuance
costs
|
(1,173)
|
|
(545)
|
Repurchases of common
stock for tax withholding
|
(5,913)
|
|
(10,395)
|
Other
|
166
|
|
—
|
Cash provided by (used
in) financing activities
|
54,831
|
|
(52,306)
|
Effect of exchange
rate changes on cash, cash equivalents, and restricted
cash
|
(1,582)
|
|
4,000
|
Net change in cash,
cash equivalents, and restricted cash
|
9,925
|
|
(65,956)
|
Cash, cash
equivalents, and restricted cash—beginning of period
|
153,097
|
|
194,885
|
Cash, cash
equivalents, and restricted cash—end of period
|
$
163,022
|
|
$
128,929
|
CROCS, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP MEASURES TO NON-GAAP
MEASURES
In addition to financial measures presented on the basis of
accounting principles generally accepted in the United States of America ("GAAP"), we
present "Non-GAAP gross profit," "Non-GAAP gross margin," "Non-GAAP
gross margin by brand," "Non-GAAP selling, general, and
administrative expenses," "Non-GAAP selling, general and
administrative expenses as a percent of revenues," "Non-GAAP
selling,general and administrative expenses as a percent of
revenues by brand," "Non-GAAP income from operations," "Non-GAAP
operating margin," "Non-GAAP operating margin by brand," "Non-GAAP
tax rate," "Non-GAAP diluted net income per common share,"
"Non-GAAP income before income taxes," "Non-GAAP income tax
expense," "Non-GAAP effective tax rate," "Non-GAAP net income,"
"Non-GAAP basic and diluted net income per common share," and "net
leverage" which are non-GAAP financial measures. We also present
future period guidance for "Non-GAAP operating margin," "Non-GAAP
income from operations," "Non-GAAP effective tax rate," "Non-GAAP
diluted earnings per share," and "net leverage." Non-GAAP results
exclude the impact of items that management believes affect the
comparability or underlying business trends in our condensed
consolidated financial statements in the periods presented.
We also present certain information related to our current
period results of operations through "constant currency," which is
a non-GAAP financial measure and should be viewed as a supplement
to our results of operations and presentation of reportable
segments under GAAP. Constant currency represents current period
results that have been retranslated using exchange rates used in
the prior year comparative period to enhance the visibility of the
underlying business trends excluding the impact of foreign currency
exchange rate fluctuations.
Management uses non-GAAP results to assist in comparing business
trends from period to period on a consistent basis in
communications with the board of directors, stockholders, analysts,
and investors concerning our financial performance. We believe that
these non-GAAP measures, in addition to corresponding GAAP
measures, are useful to investors and other users of our condensed
consolidated financial statements as an additional tool for
evaluating operating performance and trends by providing meaningful
information about operations compared to our peers by excluding the
impacts of various differences.
Management believes Non-GAAP gross profit, Non-GAAP gross
margin, and Non-GAAP gross margin by brand are useful performance
measures for investors because they provide investors with a means
of comparing these measures between periods without the impact of
certain expenses that we believe are not indicative of our routine
cost of sales. Our routine cost of sales includes core product
costs and distribution expenses primarily related to receiving,
inspecting, warehousing, and packaging product and transportation
costs associated with delivering products from distribution
centers. Costs not indicative of our routine cost of sales may or
may not be recurring in nature and include costs to expand and
transition to new distribution centers.
Management believes Non-GAAP selling, general and administrative
expenses and Non-GAAP selling, general and administrative expenses
as a percent of revenues are useful performance measures for
investors because they provide a more meaningful comparison to
prior periods and may be indicative of the level of such expenses
to be incurred in future periods. These measures exclude the impact
of certain expenses not related to our normal operations, such as
costs related to the integration of HEYDUDE and other costs that
are expected to be non-recurring in nature.
Non-GAAP income from operations, Non-GAAP operating margin, and
Non-GAAP operating margin by brand reflect the impact of Non-GAAP
gross profit and Non-GAAP selling, general, and administrative
expenses, as discussed above. We believe these are useful
performance measures for investors because they provide a useful
basis to compare performance in the period to prior periods.
Non-GAAP income before income taxes reflects the impact of
Non-GAAP income from operations, as discussed above. We believe
this is a useful performance measure for investors because it
provides a useful basis to compare performance in the period to
prior periods.
Management believes Non-GAAP income tax expense is a useful
performance measure for investors because it provides a basis to
compare our tax rates to historical tax rates, and because the
adjustment is necessary in order to calculate Non-GAAP net
income.
Management believes Non-GAAP effective tax rate is a useful
performance measure for investors because it provides an ongoing
effective tax rate that they can use for historical comparisons and
forecasting.
Management believes Non-GAAP net income is a useful performance
measure for investors because it focuses on underlying operating
results and trends and improves the comparability of our results to
prior periods. This measure reflects the impact of Non-GAAP gross
profit, Non-GAAP selling, general, and administrative expenses, and
Non-GAAP income tax expense, as described above.
Management believes Non-GAAP basic and diluted net income per
common share are useful performance measures for investors because
they focus on underlying operating results and trends and improve
the comparability of our results to prior periods. These measures
reflect the impact of Non-GAAP gross profit, Non-GAAP selling,
general, and administrative expenses, and Non-GAAP income tax
expense, as described above.
Management believes net leverage is a useful performance measure
for investors because it allows for a direct comparison of this
measure between periods and is reflective of outstanding borrowings
after using all available cash and cash equivalents to reduce
borrowings.
For the three months ended March 31,
2024, management believes it is helpful to evaluate our
results excluding the impacts of various adjustments relating to
special or non-recurring items. Investors should not consider these
non-GAAP measures in isolation from, or as a substitute for,
financial information prepared in accordance with GAAP.
CROCS, INC. AND
SUBSIDIARIES
RECONCILIATION OF
GAAP MEASURES TO NON-GAAP MEASURES
(UNAUDITED)
|
Non-GAAP gross
profit and gross margin reconciliation:
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
|
(in
thousands)
|
GAAP
revenues
|
$
938,633
|
|
$
884,166
|
|
|
|
|
GAAP gross
profit
|
$
522,077
|
|
$
476,370
|
Distribution centers
(1)
|
3,242
|
|
3,281
|
Non-GAAP gross
profit
|
$
525,319
|
|
$
479,651
|
|
|
|
|
GAAP gross
margin
|
55.6 %
|
|
53.9 %
|
Non-GAAP gross
margin
|
56.0 %
|
|
54.2 %
|
|
|
(1)
|
During the three months
ended March 31, 2024, adjustments primarily relate to costs to
transition to our new HEYDUDE distribution center in Las Vegas,
Nevada. During the three months ended March 31, 2023, adjustments
represent expenses, including expansion costs and duplicate rent
costs, related to our distribution centers in Dayton, Ohio and Las
Vegas, Nevada.
|
Non-GAAP gross
margin reconciliation by brand:
Crocs
Brand:
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
GAAP Crocs Brand gross
margin
|
58.1 %
|
|
55.8 %
|
Non-GAAP
adjustments:
|
|
|
|
Distribution centers
(1)
|
— %
|
|
0.5 %
|
Non-GAAP Crocs Brand
gross margin
|
58.1 %
|
|
56.3 %
|
|
|
(1)
|
Represents prior
year expenses, including expansion costs and duplicate rent costs,
primarily related to our distribution centers in Dayton,
Ohio.
|
HEYDUDE
Brand:
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
GAAP HEYDUDE Brand
gross margin
|
46.2 %
|
|
49.6 %
|
Non-GAAP
adjustments:
|
|
|
|
Distribution centers
(1)
|
1.6 %
|
|
— %
|
Non-GAAP HEYDUDE Brand
gross margin
|
47.8 %
|
|
49.6 %
|
|
|
(1)
|
Represents transition
costs to our new distribution center in Las Vegas,
Nevada.
|
Non-GAAP selling,
general and administrative reconciliation:
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
|
(in
thousands)
|
GAAP
revenues
|
$
938,633
|
|
$
884,166
|
|
|
|
|
GAAP selling, general
and administrative expenses
|
$
295,648
|
|
$
241,442
|
Impairment related to
information technology systems (1)
|
(18,172)
|
|
—
|
Impairment related to
distribution centers (2)
|
(6,933)
|
|
—
|
Information technology
project discontinuation
|
—
|
|
(4,119)
|
HEYDUDE integration
costs
|
—
|
|
(1,286)
|
Duplicate headquarters
rent (3)
|
—
|
|
(1,067)
|
Other
(4)
|
—
|
|
(2,360)
|
Total
adjustments
|
(25,105)
|
|
(8,832)
|
Non-GAAP selling,
general and administrative expenses (5)
|
$
270,543
|
|
$
232,610
|
|
|
|
|
GAAP selling, general
and administrative expenses as a percent of revenues
|
31.5 %
|
|
27.3 %
|
Non-GAAP selling,
general and administrative expenses as a percent of
revenues
|
28.8 %
|
|
26.3 %
|
|
|
(1)
|
Represents an
impairment of information technology systems related to the HEYDUDE
integration.
|
(2)
|
Primarily represents an
impairment of the right-of-use assets for our former HEYDUDE Brand
warehouses in Las Vegas, Nevada associated with our move to our new
distribution center and an impairment of the right-of-use asset for
our former Crocs Brand warehouse in Oudenbosch, the
Netherlands.
|
(3)
|
Represents duplicate
rent costs associated with our move to a new
headquarters.
|
(4)
|
Includes various
restructuring costs, as well as costs associated with the
implementation of a new enterprise resource planning
system.
|
(5)
|
Non-GAAP selling,
general and administrative expenses are presented gross of
tax.
|
Non-GAAP income from
operations and operating margin reconciliation:
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
|
(in
thousands)
|
GAAP
revenues
|
$
938,633
|
|
$
884,166
|
|
|
|
|
GAAP income from
operations
|
$
226,429
|
|
$
234,928
|
Non-GAAP gross profit
adjustments (1)
|
3,242
|
|
3,281
|
Non-GAAP selling,
general and administrative expenses adjustments
(2)
|
25,105
|
|
8,832
|
Non-GAAP income
from operations
|
$
254,776
|
|
$
247,041
|
|
|
|
|
GAAP operating
margin
|
24.1 %
|
|
26.6 %
|
Non-GAAP operating
margin
|
27.1 %
|
|
27.9 %
|
|
|
(1)
|
See 'Non-GAAP gross
profit and gross margin reconciliation' above for more
details.
|
(2)
|
See 'Non-GAAP selling,
general and administrative expenses and selling, general and
administrative expenses as a percent of revenues reconciliation'
above for more details.
|
Non-GAAP income tax
expense (benefit) and effective tax rate
reconciliation:
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
|
(in
thousands)
|
GAAP income from
operations
|
$
226,429
|
|
$
234,928
|
GAAP income before
income taxes
|
194,029
|
|
191,766
|
|
|
|
|
Non-GAAP income from
operations (1)
|
$
254,776
|
|
$
247,041
|
GAAP non-operating
income (expenses):
|
|
|
|
Foreign currency
losses, net
|
(2,273)
|
|
(403)
|
Interest
income
|
416
|
|
171
|
Interest
expense
|
(30,563)
|
|
(42,637)
|
Other income
(expense), net
|
20
|
|
(293)
|
Non-GAAP income before
income taxes
|
$
222,376
|
|
$
203,879
|
|
|
|
|
GAAP income tax
expense
|
$
41,575
|
|
$
42,223
|
Tax effect of non-GAAP
operating adjustments
|
7,141
|
|
3,070
|
Impact of intra-entity
IP transfers (2)
|
(10,438)
|
|
(4,821)
|
Non-GAAP income tax
expense
|
$
38,278
|
|
$
40,472
|
|
|
|
|
GAAP effective income
tax rate
|
21.4 %
|
|
22.0 %
|
Non-GAAP effective
income tax rate
|
17.2 %
|
|
19.9 %
|
|
|
(1)
|
See 'Non-GAAP income
from operations and operating margin reconciliation' above for more
details.
|
(2)
|
In the fourth quarter
of 2023, and previously in 2021 and 2020, we made changes to our
international legal structure, including an intra-entity transfer
of certain intellectual property rights, primarily to align with
current and future international operations. The transfers resulted
in a step-up in the tax basis of intellectual property rights and
correlated increases in foreign deferred tax assets based on the
fair value of the transferred intellectual property rights. This
adjustment represents the current period impact of these
transfers.
|
Non-GAAP net income
per share reconciliation:
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
|
(in thousands,
except per share data)
|
Numerator:
|
|
|
|
GAAP net
income
|
$
152,454
|
|
$
149,543
|
Non-GAAP gross profit
adjustments (1)
|
3,242
|
|
3,281
|
Non-GAAP selling,
general and administrative expenses adjustments
(2)
|
25,105
|
|
8,832
|
Tax effect of non-GAAP
adjustments
|
3,297
|
|
1,751
|
Non-GAAP net
income
|
$
184,098
|
|
$
163,407
|
Denominator:
|
|
|
|
GAAP weighted average
common shares outstanding - basic
|
60,564
|
|
61,836
|
Plus: GAAP dilutive
effect of stock options and unvested restricted stock
units
|
490
|
|
793
|
GAAP weighted average
common shares outstanding - diluted
|
61,054
|
|
62,629
|
|
|
|
|
GAAP net income per
common share:
|
|
|
|
Basic
|
$
2.52
|
|
$
2.42
|
Diluted
|
$
2.50
|
|
$
2.39
|
|
|
|
|
Non-GAAP net income per
common share:
|
|
|
|
Basic
|
$
3.04
|
|
$
2.64
|
Diluted
|
$
3.02
|
|
$
2.61
|
|
|
(1)
|
See 'Non-GAAP gross
profit and gross margin reconciliation' above for more
information.
|
(2)
|
See 'Non-GAAP selling,
general and administrative expenses and selling, general and
administrative expenses as a percent of revenues reconciliation'
above for more information.
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL GUIDANCE
|
|
Full Year
2024:
|
|
|
Approximately:
|
Non-GAAP operating
margin and operating income reconciliation:
|
|
GAAP operating
margin
|
24 %
|
Non-GAAP adjustments,
primarily related to IT system impairments
(1)
|
1 %
|
Non-GAAP operating
margin
|
25 %
|
Non-GAAP effective
tax rate reconciliation:
|
|
GAAP effective tax
rate
|
21.5 %
|
Non-GAAP adjustments,
primarily related to amortization of intellectual property
(1)(2)
|
(3.5) %
|
Non-GAAP effective tax
rate
|
18.0 %
|
Non-GAAP diluted
earnings per share reconciliation:
|
|
GAAP diluted earnings
per share
|
$11.47
to $11.95
|
Non-GAAP adjustments,
primarily related to IT system impairments and amortization of
intellectual property (1)(2)
|
$0.78
|
Non-GAAP diluted
earnings per share
|
$12.25
to $12.73
|
|
|
(1)
|
For the full year 2024,
we expect to incur approximately $28 million in costs primarily for
an impairment of information technology systems related to the
HEYDUDE integration and costs to transition to our new HEYDUDE
distribution center in Las Vegas, Nevada.
|
(2)
|
In the fourth quarter
of 2023, and previously in 2021 and 2020, we made changes to our
international legal structure, including an intra-entity transfer
of certain intellectual property rights, primarily to align with
current and future international operations. The transfers resulted
in a step-up in the tax basis of intellectual property rights and
correlated increases in foreign deferred tax assets based on the
fair value of the transferred intellectual property rights. This
adjustment represents the current period impact of these
transfers.
|
Non-GAAP Financial Guidance
Our forward-looking guidance for consolidated "adjusted
operating margin," and "adjusted diluted earnings per share"
represents non-GAAP financial measures that exclude or otherwise
have been adjusted for special items from our U.S. GAAP financial
statements. We consider these items to be necessary adjustments for
purposes of evaluating our ongoing business performance and are
often considered non-recurring. Such adjustments are subjective and
involve significant management judgment.
While we are able to estimate full year non-GAAP adjustments, we
are unable to reconcile forward-looking adjusted measures to their
nearest U.S. GAAP measure quarter-by-quarter because we are unable
to predict the timing of these adjustments with a reasonable degree
of certainty. By their very nature, special and other non-core
items are difficult to anticipate with precision because they are
generally associated with unexpected and unplanned events that
impact our company and its financial results. Therefore, we are
unable to provide a reconciliation of these measures for the
guidance related to the second quarter of 2024.
CROCS, INC. AND
SUBSIDIARIES
REVENUES BY SEGMENT,
CHANNEL, and GEOGRAPHY
(UNAUDITED)
|
|
|
Three Months Ended
March 31,
|
|
%
Change
|
|
Constant Currency
%
Change (1)
|
|
|
Favorable
(Unfavorable)
|
|
2024
|
|
2023
|
|
Q1 2024-2023
|
|
Q1 2024-2023
|
|
($
in thousands)
|
Crocs Brand:
|
|
|
|
|
|
|
|
North
America:
|
|
|
|
|
|
|
|
Wholesale
|
$
180,337
|
|
$
172,055
|
|
4.8 %
|
|
4.8 %
|
Direct-to-consumer
|
202,576
|
|
179,254
|
|
13.0 %
|
|
13.0 %
|
Total North America
(2)
|
382,913
|
|
351,309
|
|
9.0 %
|
|
9.0 %
|
International:
|
|
|
|
|
|
|
|
Wholesale
|
281,665
|
|
238,508
|
|
18.1 %
|
|
20.3 %
|
Direct-to-consumer
|
79,238
|
|
58,961
|
|
34.4 %
|
|
37.2 %
|
Total
International
|
360,903
|
|
297,469
|
|
21.3 %
|
|
23.6 %
|
Total Crocs
Brand
|
$
743,816
|
|
$
648,778
|
|
14.6 %
|
|
15.6 %
|
|
|
|
|
|
|
|
|
Crocs Brand:
|
|
|
|
|
|
|
|
Wholesale
|
$
462,002
|
|
$
410,563
|
|
12.5 %
|
|
13.8 %
|
Direct-to-consumer
|
281,814
|
|
238,215
|
|
18.3 %
|
|
19.0 %
|
Total Crocs
Brand
|
743,816
|
|
648,778
|
|
14.6 %
|
|
15.6 %
|
HEYDUDE
Brand:
|
|
|
|
|
|
|
|
Wholesale
|
134,753
|
|
167,863
|
|
(19.7) %
|
|
(19.8) %
|
Direct-to-consumer
|
60,064
|
|
67,525
|
|
(11.0) %
|
|
(11.0) %
|
Total HEYDUDE Brand
(3)
|
194,817
|
|
235,388
|
|
(17.2) %
|
|
(17.3) %
|
Total consolidated
revenues
|
$
938,633
|
|
$
884,166
|
|
6.2 %
|
|
6.9 %
|
|
|
(1)
|
Reflects year over year
change as if the current period results were in constant currency,
which is a non-GAAP financial measure. See 'Reconciliation of GAAP
Measures to Non-GAAP Measures' above for more
information.
|
(2)
|
North America includes
the United States and Canada.
|
(3)
|
The vast majority of
HEYDUDE Brand revenues are derived from North America.
|
CROCS, INC. AND
SUBSIDIARIES
DIRECT-TO-CONSUMER
COMPARABLE SALES
(UNAUDITED)
|
Direct-to-consumer
("DTC") comparable sales were as follows:
|
|
|
Constant Currency
(1)
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Direct-to-consumer
comparable sales: (2)
|
|
|
|
Crocs Brand
|
14.7 %
|
|
19.2 %
|
HEYDUDE
Brand
|
(18.4) %
|
|
40.6 %
|
|
|
(1)
|
Reflects period over
period change on a constant currency basis, which is a non-GAAP
financial measure. See "Use of Non-GAAP Financial Measures" for
more information.
|
(2)
|
Comparable store
status, as included in the DTC comparable sales figures above, is
determined on a monthly basis. Comparable store sales include the
revenues of stores that have been in operation for more than twelve
months. Stores in which selling square footage has changed more
than 15% as a result of a remodel, expansion, or reduction are
excluded until the thirteenth month in which they have comparable
prior year sales. Temporarily closed stores are excluded from the
comparable store sales calculation during the month of closure and
in the same month in the following year. Location closures in
excess of three months are excluded until the thirteenth month post
re-opening. E-commerce comparable revenues are based on same site
sales period over period. E-commerce sites that are temporarily
offline or unable to transact or fulfill orders ("site disruption")
are excluded from the comparable sales calculation during the month
of site disruption and in the same month in the following year.
E-commerce site disruptions in excess of three months are excluded
until the thirteenth month after the site has re-opened.
Additionally, comparable sales do not include leap days in leap
years.
|
|
Investor
Contact:
|
Erinn Murphy, Crocs,
Inc.
|
|
|
(303)
848-7005
|
|
|
emurphy@crocs.com
|
|
|
|
|
PR
Contact:
|
Melissa Layton, Crocs,
Inc.
|
|
|
(303)
848-7885
|
|
|
mlayton@crocs.com
|
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SOURCE Crocs, Inc.