• Second Quarter Revenues Increased 4% Over Last Year To $1,112 Million
  • Second Quarter Diluted EPS Up 11% to $3.77 and Adjusted Diluted EPS Up 12% to $4.01

BROOMFIELD, Colo., Aug. 1, 2024 /PRNewswire/ — Crocs, Inc. (NASDAQ: CROX), a world leader in innovative casual footwear for all, today announced its second quarter 2024 financial results.

“We reported record second quarter results on both the top and bottom line which exceeded our guidance on all Enterprise metrics,” said Andrew Rees, Chief Executive Officer. “Strength in the quarter was led by our Crocs Brand with exceptional growth internationally. As it relates to HEYDUDE, we are making improvements to support long-term brand health and are focused on driving brand heat by accelerating marketing in the second half of the year.”

Mr. Rees continued, “Based on the strength of our second quarter, we are lifting our operating margin and earnings per share outlook for the fiscal year while maintaining our revenue guidance. Our terrific cash flow generation provides us the flexibility to reinvest in our business, pay down debt and repurchase shares.”

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.

Second Quarter 2024 Operating Results (Compared to the Same Period Last Year)

  • Consolidated revenues were $1,112 million, an increase of 3.6%, or 4.8% on a constant currency basis. Direct-to-consumer (“DTC”) revenues grew 8.9%, or 10.0% on a constant currency basis. Wholesale revenues contracted 1.3%, flat on a constant currency basis.
  • Gross margin was 61.4% compared to 57.9%. Adjusted gross margin improved 330 basis points to 61.4% compared to 58.1%.
  • Selling, general, and administrative expenses (“SG&A”) of $356 million increased 17.6% from $303 million, and represented 32.0% of revenues. Adjusted SG&A of $356 million increased 19.4% from $298 million, and represented 32.0% of revenues.
  • Income from operations of $326 million increased 2.3% from $318 million, resulting in operating margin of 29.3%. Adjusted income from operations of $326 million increased 0.4% from $325 million, resulting in adjusted operating margin of 29.3%.
  • Diluted earnings per share of $3.77 increased 11.2% from $3.39. Adjusted diluted earnings per share of $4.01 increased 11.7% from $3.59.
  • During the quarter, we repaid $200 million of debt. We repurchased approximately 1.2 million shares for $175 million, and at quarter end, $700 million of share repurchase authorization remained available for future repurchases.

Second Quarter 2024 Brand Summary

  • Crocs Brand: Revenues increased 9.7% to $914 million, or 11.2% on a constant currency basis.
    • Channel
      • DTC revenues increased 12.5% to $479 million, or 13.8% on a constant currency basis.
      • Wholesale revenues increased 6.9% to $435 million, or 8.6% on a constant currency basis.
    • Geography
      • North America revenues increased 3.0% to $489 million, or 3.2% on a constant currency basis.
      • International revenues increased 18.7% to $425 million, or 22.0% on a constant currency basis.
  • HEYDUDE Brand: Revenues decreased 17.5% to $198 million.
    • Channel
      • DTC revenues decreased 7.6% to $84 million.
      • Wholesale revenues decreased 23.5% to $114 million.

 Balance Sheet and Cash Flow (June 30, 2024 as compared to June 30, 2023)

  • Cash and cash equivalents were $168 million compared to $166 million.
  • Inventories were $377 million compared to $436 million.
  • Total borrowings were $1,530 million compared to $2,027 million.
  • Capital expenditures were $33 million compared to $52 million.

Financial Outlook

Third Quarter 2024

With respect to the third quarter of 2024, we expect:

  • Revenues to be down 1.5% to up 0.5% compared to third quarter 2023, at currency rates as of the end of the last reported period.
    • Crocs Brand to grow 3% to 5% compared to third quarter 2023.
    • HEYDUDE Brand to be down 16% to 14% compared to third quarter 2023.
  • Adjusted operating margin of approximately 24.5%.
  • Adjusted diluted earnings per share of $2.95 to $3.10.

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 grow approximately 7% to 9%.
    • Revenues for the HEYDUDE Brand to be down approximately 10% to 8%.
  • Adjusted operating margin of more than 25% compared to prior guidance 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 $12.45 to $12.90 compared to prior guidance of $12.25 to $12.73. Adjusted diluted earnings per share guidance does not assume any impact from potential future share repurchases.
  • Capital expenditures of $100 million to $110 million compared to prior guidance of $120 million to $130 million.

Conference Call Information

A conference call to discuss second quarter 2024 results is scheduled for today, Thursday, August 1, 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 August 1, 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 third 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 August 1, 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 June 30,

Six Months Ended June 30,

2024

2023

2024

2023

Revenues

$                1,111,502

$                1,072,367

$                2,050,135

$                1,956,533

Cost of sales

429,586

451,060

846,142

858,856

Gross profit

681,916

621,307

1,203,993

1,097,677

Selling, general and administrative expenses

356,178

302,818

651,826

544,260

Income from operations

325,738

318,489

552,167

553,417

Foreign currency gains (losses), net

(1,323)

551

(3,596)

148

Interest income

1,126

548

1,542

719

Interest expense

(29,161)

(43,063)

(59,724)

(85,700)

Other income, net

45

717

65

424

Income before income taxes

296,425

277,242

490,454

469,008

Income tax expense

67,518

64,830

109,093

107,053

Net income

$                   228,907

$                   212,412

$                   381,361

$                   361,955

Net income per common share:






Basic

$                          3.79

$                          3.42

$                          6.31

$                          5.84

Diluted

$                          3.77

$                          3.39

$                          6.26

$                          5.78

Weighted average common shares outstanding:






Basic

60,320

62,037

60,442

61,937

Diluted

60,766

62,603

60,910

62,616

CROCS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and par value amounts)


June 30,
2024

December 31,
2023

ASSETS


Current assets:


Cash and cash equivalents

$          167,734

$          149,288

Restricted cash – current

2

2

Accounts receivable, net of allowances of $34,899 and $27,591, respectively

420,199

305,747

Inventories

376,599

385,054

Income taxes receivable

2,502

4,413

Other receivables

20,282

21,071

Prepaid expenses and other assets

39,586

45,129

Total current assets

1,026,904

910,704

Property and equipment, net of accumulated depreciation of $133,215 and $120,510, respectively

244,067

238,315

Intangible assets, net of accumulated amortization of $150,026 and $138,611, respectively

1,785,303

1,792,562

Goodwill

711,542

711,588

Deferred tax assets, net

640,587

667,972

Restricted cash

3,292

3,807

Right-of-use assets

292,089

287,440

Other assets

16,014

31,446

Total assets

$       4,719,798

$       4,643,834

LIABILITIES AND STOCKHOLDERS’ EQUITY


Current liabilities:


Accounts payable

$          244,853

$          260,978

Accrued expenses and other liabilities

285,095

285,771

Income taxes payable

92,550

65,952

Current borrowings

—

23,328

Current operating lease liabilities

63,918

62,267

Total current liabilities

686,416

698,296

Deferred tax liabilities, net

12,841

12,912

Long-term income taxes payable

557,581

565,171

Long-term borrowings

1,529,566

1,640,996

Long-term operating lease liabilities

277,112

269,769

Other liabilities

3,071

2,767

Total liabilities

3,066,587

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, 59.6 million and 60.5 million outstanding, respectively

110

110

Treasury stock, at cost, 50.8 million and 49.6 million shares, respectively

(2,071,289)

(1,888,869)

Additional paid-in capital

844,595

826,685

Retained earnings

2,993,126

2,611,765

Accumulated other comprehensive loss

(113,331)

(95,768)

Total stockholders’ equity

1,653,211

1,453,923

Total liabilities and stockholders’ equity

$       4,719,798

$       4,643,834




CROCS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)


Six Months Ended June 30,

2024

2023

Cash flows from operating activities:


Net income

$                    381,361

$                 361,955

Adjustments to reconcile net income to net cash provided by operating activities:


Depreciation and amortization

33,705

25,780

Operating lease cost

40,654

36,592

Share-based compensation

17,744

15,852

Asset impairment

24,081

—

Other non-cash items

18,517

769

Changes in operating assets and liabilities, net of acquired assets and assumed liabilities:


Accounts receivable

(119,159)

(113,838)

Inventories

5,172

34,884

Prepaid expenses and other assets

2,247

(32,413)

Accounts payable, accrued expenses and other liabilities

(19,034)

27,819

Right-of-use assets and operating lease liabilities

(42,069)

(35,176)

Income taxes

30,443

8,389

Cash provided by operating activities

373,662

330,613

Cash flows from investing activities:


Purchases of property, equipment, and software

(32,806)

(51,645)

Cash used in investing activities

(32,806)

(51,645)

Cash flows from financing activities:


Proceeds from borrowings

78,156

214,634

Repayments of borrowings

(216,405)

(513,703)

Deferred debt issuance costs

(1,173)

(612)

Repurchases of common stock

(175,011)

—

Repurchases of common stock for tax withholding

(5,913)

(11,636)

Other

168

—

Cash used in financing activities

(320,178)

(311,317)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

(2,747)

7,049

Net change in cash, cash equivalents, and restricted cash

17,931

(25,300)

Cash, cash equivalents, and restricted cash—beginning of period

153,097

194,885

Cash, cash equivalents, and restricted cash—end of period

$                    171,028

$                 169,585

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 income from operations,” “Non-GAAP operating margin,” “Non-GAAP operating margin by brand,” “Non-GAAP income before income taxes,” “Non-GAAP income tax expense,” “Non-GAAP effective tax rate,” “Non-GAAP net income,” and “Non-GAAP basic and diluted net income per common share,” 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,” and “Non-GAAP diluted earnings per share.” 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.

For the three and six months ended June 30, 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 June 30,

Six Months Ended June 30,

2024

2023

2024

2023

(in thousands)

GAAP revenues

$            1,111,502

$            1,072,367

$                2,050,135

$            1,956,533








GAAP gross profit

$               681,916

$               621,307

$              1,203,993

$            1,097,677

Distribution centers (1)

—

1,586

3,242

4,867

Non-GAAP gross profit

$               681,916

$               622,893

$              1,207,235

$            1,102,544








GAAP gross margin

61.4 %

57.9 %

58.7 %

56.1 %

Non-GAAP gross margin

61.4 %

58.1 %

58.9 %

56.4 %


(1)

During the six months ended June 30, 2024, adjustments primarily relate to costs to transition to our new HEYDUDE distribution center in Las Vegas, Nevada. During the three and six months ended June 30, 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 June 30,

2024

2023

GAAP Crocs Brand gross margin

64.1 %

61.9 %

Non-GAAP adjustments:


Distribution centers (1)

— %

0.1 %

Non-GAAP Crocs Brand gross margin

64.1 %

62.0 %


(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 June 30,

2024

2023

GAAP HEYDUDE Brand gross margin

49.1 %

47.1 %

Non-GAAP adjustments:


Distribution centers

— %

less than 0.1%

Non-GAAP HEYDUDE Brand gross margin

49.1 %

47.1 %

Non-GAAP selling, general and administrative reconciliation:


Three Months Ended June 30,

Six Months Ended June 30,

2024

2023

2024

2023

(in thousands)

GAAP revenues

$            1,111,502

$            1,072,367

$            2,050,135

$            1,956,533








GAAP selling, general and administrative expenses

$               356,178

$               302,818

$               651,826

$               544,260

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

—

(130)

—

(1,416)

Duplicate headquarters rent (3)

—

(1,126)

—

(2,193)

Other (4)

—

(3,248)

—

(5,608)

Total adjustments

—

(4,504)

(25,105)

(13,336)

Non-GAAP selling, general and administrative expenses (5)

$               356,178

$               298,314

$               626,721

$               530,924








GAAP selling, general and administrative expenses as a percent of revenues

32.0 %

28.2 %

31.8 %

27.8 %

Non-GAAP selling, general and administrative expenses as a percent of revenues

32.0 %

27.8 %

30.6 %

27.1 %


(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 June 30,

Six Months Ended June 30,

2024

2023

2024

2023

(in thousands)

GAAP revenues

$           1,111,502

$           1,072,367

$           2,050,135

$           1,956,533








GAAP income from operations

$              325,738

$              318,489

$              552,167

$              553,417

Non-GAAP gross profit adjustments (1)

—

1,586

3,242

4,867

Non-GAAP selling, general and administrative expenses adjustments (2)

—

4,504

25,105

13,336

Non-GAAP income from operations

$              325,738

$              324,579

$              580,514

$              571,620








GAAP operating margin

29.3 %

29.7 %

26.9 %

28.3 %

Non-GAAP operating margin

29.3 %

30.3 %

28.3 %

29.2 %


(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 June 30,

Six Months Ended June 30,

2024

2023

2024

2023

(in thousands)

GAAP income from operations

$              325,738

$              318,489

$              552,167

$              553,417

GAAP income before income taxes

296,425

277,242

490,454

469,008








Non-GAAP income from operations (1)

$              325,738

$              324,579

$              580,514

$              571,620

GAAP non-operating income (expenses):






Foreign currency gains (losses), net

(1,323)

551

(3,596)

148

Interest income

1,126

548

1,542

719

Interest expense

(29,161)

(43,063)

(59,724)

(85,700)

Other income, net

45

717

65

424

Non-GAAP income before income taxes

$              296,425

$              283,332

$              518,801

$              487,211








GAAP income tax expense

$                67,518

$                64,830

$              109,093

$              107,053

Tax effect of non-GAAP operating adjustments

—

1,544

7,141

4,614

Impact of intra-entity IP transfers (2)

(14,729)

(7,695)

(25,167)

(12,516)

Non-GAAP income tax expense

$                52,789

$                58,679

$                91,067

$                99,151








GAAP effective income tax rate

22.8 %

23.4 %

22.2 %

22.8 %

Non-GAAP effective income tax rate

17.8 %

20.7 %

17.6 %

20.4 %


(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 June 30,

Six Months Ended June 30,

2024

2023

2024

2023

(in thousands, except per share data)

Numerator:






GAAP net income

$                   228,907

$                   212,412

$                   381,361

$                   361,955

Non-GAAP gross profit adjustments (1)

—

1,586

3,242

4,867

Non-GAAP selling, general and administrative expenses adjustments (2)

—

4,504

25,105

13,336

Tax effect of non-GAAP adjustments

14,729

6,151

18,026

7,902

Non-GAAP net income

$                   243,636

$                   224,653

$                   427,734

$                   388,060

Denominator:






GAAP weighted average common shares outstanding – basic

60,320

62,037

60,442

61,937

Plus: GAAP dilutive effect of stock options and unvested restricted stock units

446

566

468

679

GAAP weighted average common shares outstanding – diluted

60,766

62,603

60,910

62,616








GAAP net income per common share:






Basic

$                          3.79

$                          3.42

$                          6.31

$                          5.84

Diluted

$                          3.77

$                          3.39

$                          6.26

$                          5.78








Non-GAAP net income per common share:






Basic

$                          4.04

$                          3.62

$                          7.08

$                          6.27

Diluted

$                          4.01

$                          3.59

$                          7.02

$                          6.20


(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

Over 24%

Non-GAAP adjustments, primarily related to IT system impairments (1)

1 %

Non-GAAP operating margin

Over 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

$11.66 to $12.11

Non-GAAP adjustments, primarily related to IT system impairments and amortization of intellectual property (1)(2)

$0.79

Non-GAAP diluted earnings per share

$12.45 to $12.90


(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 third quarter of 2024.

CROCS, INC. AND SUBSIDIARIES

REVENUES BY SEGMENT, CHANNEL, and GEOGRAPHY

(UNAUDITED)


Three Months Ended June 30,

Six Months Ended June 30,

% Change

Constant Currency

% Change (1)



Favorable (Unfavorable)

2024

2023

2024

2023

Q2 2024-2023

YTD 2024-2023

Q2 2024-2023

YTD 2024-2023

($ in thousands)

Crocs Brand:














North America:














Wholesale

$  173,987

$  181,085

$  354,325

$  353,140

(3.9) %

0.3 %

(3.8) %

0.3 %

Direct-to-consumer

314,728

293,473

517,304

472,727

7.2 %

9.4 %

7.4 %

9.5 %

Total North America (2)

488,715

474,558

871,629

825,867

3.0 %

5.5 %

3.2 %

5.6 %

International:














Wholesale

261,294

226,257

542,959

464,765

15.5 %

16.8 %

18.5 %

19.4 %

Direct-to-consumer

163,980

132,135

243,218

191,096

24.1 %

27.3 %

27.9 %

30.8 %

Total International

425,274

358,392

786,177

655,861

18.7 %

19.9 %

22.0 %

22.8 %

Total Crocs Brand

$  913,989

$  832,950

$  1,657,806

$  1,481,728

9.7 %

11.9 %

11.2 %

13.2 %
















Crocs Brand:














Wholesale

$  435,281

$  407,342

$  897,284

$  817,905

6.9 %

9.7 %

8.6 %

11.2 %

Direct-to-consumer

478,708

425,608

760,522

663,823

12.5 %

14.6 %

13.8 %

15.7 %

Total Crocs Brand

913,989

832,950

1,657,806

1,481,728

9.7 %

11.9 %

11.2 %

13.2 %

HEYDUDE Brand:














Wholesale

113,829

148,825

248,582

316,688

(23.5) %

(21.5) %

(23.5) %

(21.5) %

Direct-to-consumer

83,684

90,592

143,747

158,117

(7.6) %

(9.1) %

(7.5) %

(9.0) %

Total HEYDUDE Brand (3)

197,513

239,417

392,329

474,805

(17.5) %

(17.4) %

(17.4) %

(17.4) %

Total consolidated revenues

$  1,111,502

$  1,072,367

$  2,050,135

$  1,956,533

3.6 %

4.8 %

4.8 %

5.8 %


(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 June 30,

Six Months Ended June 30,

2024

2023

2024

2023

Direct-to-consumer comparable sales: (2)






Crocs Brand

11.7 %

19.5 %

13.2 %

20.5 %

HEYDUDE Brand

(17.5) %

20.2 %

(17.7) %

24.7 %


(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.

  

SOURCE Crocs, Inc.

Originally published at https://www.prnewswire.com/news-releases/crocs-inc-reports-record-second-quarter-revenues-and-raises-full-year-2024-earnings-per-share-outlook-302211854.html
Some images courtesy of https://pixabay.com

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