Slide 1: Q4 & FY 2023 Investor Presentation
Q4 & FY 2023 Investor Presentation
Slide 2: Forward Looking Statement
Forward Looking Statement This document includes estimates, projections, and statements relating to our plans, commitments, objectives, and expectations that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act
Slide 3: Contents
Contents • Company Highlights • Financial Review • Appendix
Slide 4: Company Highlights
Company Highlights 4
Slide 5: 2023 Highlights
FINANCIAL HIGHLIGHTS 2023 Highlights (1) • Revenues of $4.0B, +12% (1) ◦ Crocs Brand revenues of $3.0B, +14% ▪ Broad based international growth with particular strength in Australia, China, South Korea, and UK (1) ▪ North America revenues +8% driven by DTC (1) (1) +13% and WHL +2% ◦ HEYDUDE Brand re
Slide 6: Diversified Sources of Growth
FINANCIAL HIGHLIGHTS Diversified Sources of Growth HEYDUDE International 24% 41% (1) Brand Geography SHARE OF BUSINESS Crocs North America 76% 59% Digital 38% DTC Digital WHL Channel 48% (2) Penetration 52% Physical 62% 1. Crocs Brand only 2. Digital sales include Crocs.com, heydude.com, third-party
Slide 7: Crocs Brand | 2023 Marketing Wins Were Broad Based
2023 HIGHLIGHTS Crocs Brand | 2023 Marketing Wins Were Broad Based 7
Slide 8: Crocs Brand | Three Product Pillars Grew Double Digits
2023 HIGHLIGHTS Crocs Brand |Three Product Pillars Grew Double Digits Clogs Sandals Jibbitz Revenue Growth vs PY (1) +12% +29% +17% 1. Revenue growth on a constant currency basis, which is a Non-GAAP Financial Measure. See further details in Appendix. 8
Slide 9: Established Global Footprint With Accelerating Traction
2023 HIGHLIGHTS Established Global Footprint With Accelerating Traction Crocs brand continues to resonate globally, with (1) international growing 23% Australia & China grew triple- (1) digits South Korea & UK grew (1) double-digits Tier 1 markets: China, India, Japan, South Korea, the U.S., and Wes
Slide 10: HEYDUDE Brand | Marketing Fueling Brand Awareness
2023 HIGHLIGHTS HEYDUDE Brand |Marketing Fueling Brand Awareness Chase Stokes Brand Ambassador (1) HEYDUDE BRAND AWARENESS GREW FROM 18% IN 1H 2023 TO 32% IN 2H 2023 1. Per Internal Brand Health Tracker Studies performed in April and September 2023. 10
Slide 11: HEYDUDE Brand | Holiday Product Successes
2023 HIGHLIGHTS HEYDUDE Brand |Holiday Product Successes Wally & Wendy Bradley Boot Ugly Christmas Sweater OUR PRODUCT WINS WERE ANCHORED AROUND OUR ICONS AND OUR BOOTS 11
Slide 12: HEYDUDE Brand | Distribution Strategy
2023 HIGHLIGHTS HEYDUDE Brand | Distribution Strategy Realign wholesale distribution with strategic partners, while rightsizing account base, and improving product segmentation Improve full-price selling on digital as we pull back price matching online Expand outlet retail strategy with plans to ope
Slide 13: Q4 2023 Highlights
Q4 HIGHLIGHTS Q4 2023 Highlights (1) • Revenues of $960M, +2% (1) ◦ Crocs Brand revenues of $732M, +10% ▪ Growth in all Tier 1 markets (1) ▪ North America revenues +3% (1) (1) ▪ DTC +12% and WHL +7% ◦ HEYDUDE Brand revenues of $228M (2) • Adjusted operating margin of 24.1% , (190) bps YoY (2) • Adju
Slide 14: Crocs Brand Highlights
FINANCIAL HIGHLIGHTS Crocs Brand Highlights Q4 2023 Revenues FY2023 Revenues $732M $3.0B (1) (1) +10% exceeding high-end of +14% exceeding high-end guidance +4% to +7% of guidance +12% to +13% Better-than-expected Holiday Broad based international growth with particular strength in Australia, China,
Slide 15: HEYDUDE Brand Highlights
FINANCIAL HIGHLIGHTS HEYDUDE Brand Highlights FY2023 Revenues Q4 2023 Revenues $228M $949M (1) (19)% exceeding high-end of +6% (1) in-line with high-end of guidance guidance (25%) to (20%) of +4% to +6% Drove brand awareness from 18% to 32% 54% of revenues from DTC Curtailed over 50% of non-strategi
Slide 16: Financial Review
Financial Review CROCS ine:
Slide 17: 2023 Financial Highlights
FINANCIAL HIGHLIGHTS 2023 Financial Highlights B/(W) ($M) 2023 vs. PY (1) Revenues 3,962 '+12% (2) Adjusted Gross Margin 56.5% +210 bp (2) Adjusted SG&A as % of Revenue 28.7% (200) bp +200 bp (2) Adjusted Operating Income 1,099 '+11% (2) Adjusted Operating Margin 27.7% — bp (2) Adjusted Diluted EPS
Slide 18: Q4 2023 Financial Highlights
FINANCIAL HIGHLIGHTS Q4 2023 Financial Highlights B/(W) ($M) Q4 vs. PY (1) Revenues $960 '+2% (2) Adjusted Gross Margin 55.7% +240 bp (2) Adjusted SG&A as % of Revenue 31.6% (430) bp 430 (2) Adjusted Operating Income $231 (6)% (2) Adjusted Operating Margin 24.1% (190) bp (2) Adjusted Diluted EPS $2.
Slide 19: 2023 Adjusted Gross Margins
FINANCIAL HIGHLIGHTS (1) 2023 Adjusted Gross Margins +350bps (180)bps +210bps 60.2% 56.7% 54.4% 56.5% (2) 48.0% 46.2% (2) 2022 2023 2022 2023 2022 2023 1. See reconciliation to GAAP equivalents in Appendix. 2. We acquired HEYDUDE on February 17, 2022 and, as a result, added the HEYDUDE Brand as a ne
Slide 20: Q4 Adjusted Gross Margins
FINANCIAL HIGHLIGHTS (1) Q4 Adjusted Gross Margins +340bps (170)bps +240bps 59.5% 56.1% 55.7% 53.3% 47.2% 45.5% Q4'22 Q4'23 Q4'22 Q4'23 Q4'22 Q4'23 1. See reconciliation to GAAP equivalents in Appendix. 20
Slide 21: 2023 Adjusted Operating Margins
FINANCIAL HIGHLIGHTS (1) 2023 Adjusted Operating Margins +310bps (620)bps Flat vs PY 36.1% 33.0% (2) 30.8% 27.7% 27.7% 24.6% (2) 2022 2023 2022 2023 2022 2023 1. See reconciliation to GAAP equivalents in Appendix. 2. We acquired HEYDUDE on February 17, 2022 and, as a result, added the HEYDUDE Brand
Slide 22: Q4 Adjusted Operating Margins
FINANCIAL HIGHLIGHTS (1) Q4 Adjusted Operating Margins +200bps (960)bps (190)bps 33.9% 31.9% 27.7% 26.0% 24.1% 18.1% Q4'22 Q4'23 Q4'22 Q4'23 Q4'22 Q4'23 1. See reconciliation to GAAP equivalents in Appendix. 22
Slide 23: Healthy Inventory Position Returning to 4x Turns
FINANCIAL HIGHLIGHTS Healthy Inventory Position Returning to 4x Turns Inventory Balance ($M) 18% YoY dec rease $472 $385 $169 $104 $303 $281 YE 2022 YE 2023 Crocs HEYDUDE 23
Slide 24: Capital Allocation
FINANCIAL HIGHLIGHTS Capital Allocation ◦ Committed to quickly (1) deleveraging - repaid Net Leverage Ratio $1.2B since the 2.1x acquisition 2.0x ▪ 2023 repayment $666M; $277M in Q4 1.7x ◦ We are in the range of 1.6x Net our long-term net Leverage: leverage target 1.0x - 1.5x 1.3x ◦ 2023 share repur
Slide 25: Capital Allocation Priorities
FINANCIAL HIGHLIGHTS Capital Allocation Priorities 25
Slide 26: Financial Outlook
Financial Outlook CROCS ine:
Slide 27: Near-Term Catalysts
FINANCIAL OUTLOOK Near-Term Catalysts • Strong franchise management for the Crocs’ brand augmented by new product introductions in 2024 (Street, height & new sandal franchise) • Global growth expected to be led by international markets, especially in APAC • Acute focus on account & channel segmentat
Slide 28: Long-Term Enterprise Priorities
FINANCIAL OUTLOOK Long-Term Enterprise Priorities Remain confident in Crocs as a $5B brand over time supported by clog, sandal, Jibbitz, digital and international growth Build HEYDUDE into a top global footwear brand as we improve segmentation and product differentiation, diversify our channels, and
Slide 29: 2024E Guidance
FINANCIAL OUTLOOK 2024E Guidance (numbers on reported basis, unless otherwise noted) Q1 2024 Full Year 2024 Total Revenue Growth (1.5)% to +0.5% +3% to 5% Revenue Growth '+6% to 8% '+4% to 6% Reported Revenue Growth (23)% to (20)% Flat To Slightly Up (2,3) Adjusted Operating Margin ~22% ~25% (2,3) A
Slide 30: Appendix
Appendix 30
Slide 31: Non-GAAP Reconciliation
APPENDIX Non-GAAP Reconciliation 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, a
Slide 32: Non-GAAP Reconciliation
APPENDIX Non-GAAP Reconciliation Non-GAAP Gross Profit and Gross Margin Reconciliation: Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 (in thousands) GAAP revenues $ 960,097 $ 945,162 $ 3,962,347 $ 3,554,985 GAAP gross profit $ 530,697 $ 496,323 $ 2,210,010 $ 1,860,282 (
Slide 33: Non-GAAP Reconciliation (Cont'd)
APPENDIX Non-GAAP Reconciliation (Cont'd) Non-GAAP Gross Margin Reconciliation by Brand: Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 GAAP Crocs Brand gross margin 59.4 % 55.3 % GAAP Crocs Brand gross margin 60.0 % 56.3 % Non-GAAP adjustments: Non-GAAP adjustments: (1)
Slide 34: Non-GAAP Reconciliation (Cont'd)
APPENDIX Non-GAAP Reconciliation (Cont'd) Non-GAAP selling, general and administrative expenses and selling, general and administrative expenses as a percent of revenues reconciliation: Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 (in thousands) GAAP revenues $ 960,097
Slide 35: Non-GAAP Reconciliation (Cont'd)
APPENDIX Non-GAAP Reconciliation (Cont'd) Non-GAAP selling, general and administrative expenses as a percent of revenues reconciliation by Brand: Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 GAAP Crocs Brand selling, general and administrative expenses as a percent of
Slide 36: Non-GAAP Reconciliation (Cont'd)
APPENDIX Non-GAAP Reconciliation (Cont'd) Non-GAAP Income from Operations and Operating Margin Reconciliation: Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 (in thousands) GAAP revenues $ 960,097 $ 945,162 $ 3,962,347 $ 3,554,985 GAAP income from operations $ 209,514 $
Slide 37: Non-GAAP Reconciliation (Cont'd)
APPENDIX Non-GAAP Reconciliation (Cont'd) Non-GAAP Operating Margin Reconciliation by Brand: Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 GAAP Crocs Brand operating margin 33.6 % 29.9 % 35.8 % 32.0 % (1) Non-GAAP costs of sales adjustments 0.1 % 0.8 % 0.2 % 0.4 % (2) N
Slide 38: Non-GAAP Reconciliation (Cont'd)
APPENDIX Non-GAAP Reconciliation (Cont'd) Non-GAAP Income Tax Expense (Benefit) and Effective Tax Rate Reconciliation: Year Ended Three Months Ended December 31, December 31, 2023 2022 2023 2022 (in thousands) GAAP income from operations $ 209,514 $ 220,052 $ 1,036,783 $ 850,756 GAAP income before i
Slide 39: Non-GAAP Reconciliation (Cont'd)
APPENDIX Non-GAAP Reconciliation (Cont'd) Non-GAAP Earnings Per Share Reconciliation: Year Ended Three Months Ended December 31, December 31, 2023 2022 2023 2022 (in thousands, except per share data) Numerator: GAAP net income $ 253,586 $ 137,735 $ 792,566 $ 540,159 (1) Non-GAAP gross profit adjustm
Slide 40: Non-GAAP Reconciliation (Cont'd)
APPENDIX Non-GAAP Reconciliation (Cont'd) Reconciliation of GAAP to Non-GAAP Financial Guidance: Full Year 2024: Approximately: Non-GAAP operating margin and operating income reconciliation: GAAP operating margin 25% (1) Non-GAAP adjustments, primarily related to investments to support growth less t
Slide 41: CROCS inc:
CROCS inc: