• 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.

SOURCE Crocs, Inc.

Originally published at https://www.prnewswire.com/news-releases/crocs-inc-reports-first-quarter-fiscal-2024-financial-results-302137602.html
Some images courtesy of https://pixabay.com

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