Crocs, Inc. Reports First Quarter Fiscal 2024 Financial Results

Crocs, Inc. Reports First Quarter Fiscal 2024 Financial Results.

Highlights:

* 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- 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.

CROCS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOMEL: See full release at:

https://investors.crocs.com/news-and-events/press-releases/press-release-details/2024/Crocs-Inc.-Reports-First-Quarter-Fiscal-2024-Financial-Results/default.aspx

Investor Contact:

Erinn Murphy, Crocs, Inc.

[phone]

[e-mail]

PR Contact:

Melissa Layton, Crocs, Inc.

[phone]

[e-mail]

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