Slide 1: Investor Presentation July 2020
INVESTOR PRESENTATION July 2020
Slide 2: Forward-Looking Statement
Some information provided in this document will be forward-looking, and accordingly, is subject to the Safe Harbor FORWARD-LOOKING provisions of the federal securities law. These statements include, but are not limited to, statements regarding potential impacts to our business related to the COVID-1
Slide 3: Content
• Our Vision & Values CONTENT • Global Business Update • Positioned for Global Growth • Financial Results • Appendix 3
Slide 4: Our Vision: Everyone comfortable in their own shoes
Our Vision Everyone comfortable in their own shoes 4
Slide 5: Our Values
Our Values The Path We Choose to Walk DELIGHTFULLY PEOPLE-PURPOSED INHERENT DEMOCRATIC DESIGN SIMPLICITY We celebrate one-of-a-kinds We think people-first at every We know smart doesn’t have to and stand together with all step. We design for everything mean complicated. So we keep different kinds. y
Slide 6: Global Business Update
GLOBAL BUSINESS UPDATE “ Amidst unprecedented market conditions globally, we delivered exceptional performance in our Americas and e- commerce businesses and increased profit despite a very challenging environment. Our performance demonstrates the strength of the Crocs brand and underscores the work
Slide 7: Q2 Highlights
GLOBAL BUSINESS UPDATE Q2 Highlights • Revenue declined 6.0%* vs. PY − Americas grew 1.2%* − Four of five key markets grew – US, Korea, China, Germany • Strong e-commerce revenue +67.7% − Americas triple-digit growth − Asia, EMEA double-digit growth • Improved adjusted operating margin by 800bps to
Slide 8: Completed Defensive Measures of Our COVID-19 Playbook
GLOBAL BUSINESS UPDATE Completed Defensive Measures of Our COVID-19 Playbook DEFENSE OFFENSE Lower expenses Four key product pillars Reduce working capital Powerful social & digital marketing Defer capital expenditures Digital-led route to market Maximize liquidity Largest growth opportunity in Asia
Slide 9: Fueled Brand Recognition in Asia
GLOBAL BUSINESS UPDATE Fueled Brand Recognition in Asia • Q2 Revenue in both Korea and China grew vs. PY, aided by: − All-Star event with Yang Mi and Tmall in China − Live stream event with Kim Se-Jeong in Korea − First energy store launched in HKRI Taikoo Hui 9
Slide 10: Continued Strength in E-Commerce
GLOBAL BUSINESS UPDATE Continued Strength in E-Commerce E-commerce Q2 Revenue Growth • We saw accelerated consumer adoption of digital commerce throughout the COVID-19 pandemic 102.2% • Strong growth of 67.7% in own e-commerce channel, benefitting from: - Strong brand heat 67.7% - Fewer discounts/pr
Slide 11: Concluded 'Free Pair for Healthcare'
GLOBAL BUSINESS UPDATE Concluded ‘Free Pair for Healthcare’ 45 days 860K+ pairs donated globally $40M retail value of donations $10M non-recurring expense in 2020 11
Slide 12: Positioned for Global Growth
POSITIONED FOR GLOBAL GROWTH Four Key Powerful Social & Digital-Led Largest Long-Term Product Pillars Digital Marketing Route to Market Growth Opportunity in Asia Clogs: Innovate & grow clog Digital and social focus globally E-commerce: Double-digit plus Asia: Largest long-term growth relevance grow
Slide 13: Innovate and Grow Clog Relevance
POSITIONED FOR GLOBAL GROWTH Innovate and Grow Clog Relevance • $5B global category that has outpaced casual footwear growth* − Crocs is market leader with $1B or ~20% share − Crocs opportunity is to grow the category • Crocs clog revenues +10% in Q2 2020 or 68% of footwear sales vs. 56% in Q2 2019
Slide 14: Significant Long-Term Growth Potential in Sandals
POSITIONED FOR GLOBAL GROWTH Significant Long-Term Growth Potential in Sandals • $30B global category growing ~4% p.a. − Fragmented market with no clear leader − Crocs opportunity is to grow our share • Consistent track record of growth ‒ 22% of footwear sales in Q2 2020 ‒ Pre-COVID, three consecuti
Slide 15: Capitalize on Personalization Trend with Jibbitz Charms
POSITIONED FOR GLOBAL GROWTH Capitalize on Personalization Trend with JibbitzTM Charms • Personalization is a global megatrend • Optimistic story-telling and personalization will be even more critical post COVID-19 • Drives relevance for the Crocs brand • Offers newness and inspiration at a compelli
Slide 16: Invest in Visible Comfort Technology
POSITIONED FOR GLOBAL GROWTH Invest in Visible Comfort Technology • LiteRide™ comfort franchise features lightweight, foam footbeds • Leveraged across collections, including Brooklyn sandals and Crocs at Work™ • Top 5 franchise for Crocs 16
Slide 17: Powerful Social & Digital Marketing
POSITIONED FOR GLOBAL GROWTH Powerful Social & Digital Marketing • Evolve “Come As You Are” • Heighten clog relevance and sandal awareness • Expand digital reach and engagement in top 5 markets* • Drive further brand heat and relevance with collaborations • Improve social engagement through locally
Slide 18: Select Q2 2020 Collaborations
POSITIONED FOR GLOBAL GROWTH Select Q2 2020 Collaborations With innovative and collaborative partnerships across the street fashion, high fashion, music and lifestyle categories, each of our collaborations is inherently unique and distinctive in design. 18
Slide 19: Digital-Led Route to Market
POSITIONED FOR GLOBAL GROWTH Digital-Led Route to Market Digital Non-digital 56.1% 43.9% Digital E-commerce Wholesale Retail Third-party e-tailers Distributors, multi- Company-operated full-price Crocs.com marketplaces (e.g., Amazon, brand, and brick-and- retail and outlet stores, (e.g., eBay) Zappo
Slide 20: Largest Long-Term Growth Opportunity in Asia
POSITIONED FOR GLOBAL GROWTH Largest Long-Term Growth Opportunity in Asia Asia: greatest opportunity long-term • Increase brand recognition and drive clog relevance in China with Tier 1 celebrity, Yang Mi • Multichannel growth in South Korea and Japan • Strong e-commerce growth supported by particip
Slide 21: Prudent Investments to Support Our Long-Term Growth
POSITIONED FOR GLOBAL GROWTH Prudent Investments to Support Our Long-Term Growth US Distribution Center EMEA Distribution Center Global Headquarters • Relocated from Los Angeles, California to • Relocating from Rotterdam to Dordrecht, • Relocated from Niwot to Broomfield, CO in Dayton, Ohio in 4Q 20
Slide 22: Q2 Financial Results
FINANCIAL RESULTS Q2 Financial Results Q2 vs. PY Revenue $331.5 (6.0%)* Gross Margin 54.3% +150 bp Adj. Gross Margin 55.2% +160 bp Adj. SG&A as % of Revenue 33.0% +640 bp Adj. Operating Margin 22.3% +800 bp Diluted EPS $0.83 +51% Adj. Diluted EPS $1.01 +71% * Revenue growth on a constant currency ba
Slide 23: YTD Financial Results
FINANCIAL RESULTS FINANCIAL RESULTS YTD Financial Results Q2 YTD vs. PY Revenue $612.7 (4.7%)* Gross Margin 51.3% +130 bp Adj. Gross Margin 51.9% +130 bp Adj. SG&A as % of Revenue 35.6% +190 bp Adj. Operating Margin 16.3% +330 bp Diluted EPS $0.99 +14% Adj. Diluted EPS $1.22 +30% * Revenue growth on
Slide 24: FY2020 Color
FINANCIAL RESULTS FY2020 Color Excluding the impact of any future shutdowns in major markets: • Second half revenue will be approximately flat to PY • Normalized tax rate of ~17%, though 2020 tax rate of 11% as we anticipate utilizing deferred tax assets • Inventory constrained for H2 • Capital expe
Slide 25: Appendix
APPENDIX 25
Slide 26: Rock the Crocs
ROCK THE CROCS Justin Bieber Ariana Grande Miley Cyrus Pharrell Williams Whoopie Goldberg Frankie Delgado Source: Google images. 26 Note: None of the above images were sponsored by Crocs.
Slide 27: Rock the Crocs
ROCK THE CROCS Kim Kardashian Gwen Stefani Yetur Gross-Matos Adam Sandler Nicole Byers Source: Google images. 27 Note: None of the above images were sponsored by Crocs.
Slide 28: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Non-GAAP cost of sales, gross profit, and gross margin reconciliation: Non-GAAP selling, general and administrative expenses reconciliation: Three Months Ended June 30, Six Months Ended June 30, Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 2020 20
Slide 29: Non-GAAP Reconciliation (cont'd)
NON-GAAP RECONCILIATION (cont’d) Non-GAAP income from operations and operating margin reconciliation: Non-GAAP earnings per share reconciliation: Three Months Ended June 30, Six Months Ended June 30, Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 2020 2019 2020 2019 (in th
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