Slide 1: Investor Presentation
Investor Presentation February 2023
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 C◦ BUSINESS & FINANCIAL HIGHLIGHTS O N◦ UPDATE ON SELECT GROWTH DRIVERS T E◦ BRAND PERFORMANCE N ◦ FINANCIAL OUTLOOK T S ◦ APPENDIX 3
Slide 4: Everyone Comfortable In Their Own Shoes
OUR VISION Everyone Comfortable In Their Own Shoes 4
Slide 5: The Path We Choose To Walk
OUR VALUES THE PATH WE CHOOSE TO WALK INHERENT DELIGHTFULLY PEOPLE-PURPOSED SIMPLICITY DEMOCRATIC DESIGN We know smart doesn’t have to We celebrate one-of-a-kinds We think people-first at every mean complicated. So we keep and stand together with all step. We design for everything things simple, lig
Slide 6: Crocs Inc. Is a Proven Growth Company
OUR STORY CROCS INC. IS A PROVEN GROWTH COMPANY Entrepreneurial Phase Overextension Transformation & Brand Re-ignition Profitable Growth 2002 - 2006 2008 to 2013 2014 to 2017 2018 to Present • Classic clog is born • Over diversified product • Announced intention to refine strategy and earnings growt
Slide 7: Market Leading Shareholder Returns
OUR RESULTS MARKET LEADING SHAREHOLDER RETURNS VALUE OF $100 INVESTED DECEMBER 31, 2017 Crocs, Inc. Dow Jones US Footwear Index Nasdaq Composite Index S&P 500 $1,200 $1,000 $800 $600 $400 $200 $- DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2017 2018 2019 2020 2021 2
Slide 8: Business & Financial Highlights
BUSINESS & FINANCIAL HIGHLIGHTS
Slide 9: CEO Quote: Business & Financial Highlights
BUSINESS & FINANCIAL HIGHLIGHTS " Consumer demand for the Crocs and HEYDUDE brands has been exceptional, fueling record 2022 revenues for both brands at a combined $3.6 billion and top-tier adjusted operating margin of 28%. We anticipate another record year in 2023 with growth expected to be led by
Slide 10: Q4 2022 Revenue Growth Summary
BUSINESS & FINANCIAL HIGHLIGHTS Q4 2022 REVENUE GROWTH SUMMARY $945M $666M $279M Crocs, Inc. Crocs Brand HEYDUDE Brand +61% / 65% CC(1) +14% / 17% CC(1) +34% +23% 19% 45% Crocs Brand Digital Crocs Brand DTC Digital Penetration(3) Sales CC Growth(1,3) Comp Growth(2) 1. Revenue growth on a constant cu
Slide 11: Q4 2022 Financial Results Highlights
BUSINESS & FINANCIAL HIGHLIGHTS FINANCIAL RESULTSHIGHLIGHTS Q4 2022 FINANCIAL B/(W) vs. Q4 PY Revenues ($M) $945.2 65%(1) Gross Margin 52.5% (1,090) bp Adjusted Gross Margin(2) 53.3% (1,040) bp Adjusted SG&A as % of 27.3% 780 bp Revenue(2) Operating Margin 23.3% (400) bp Adjusted Operating Margin(2)
Slide 12: 2022 Revenue Growth Summary
BUSINESS & FINANCIAL HIGHLIGHTS 2022 REVENUE GROWTH SUMMARY (2) $3.55B $2.66B $896M / $986M PF Crocs, Inc. Crocs Brand HEYDUDE Brand +54% / 58% CC(1) +15% / 19% CC(1) +54% / +70% PF(1) +22% 15% 38% Crocs Brand Digital Crocs Brand DTC Digital Penetration(4) Sales CC Growth(1,4) Comp Growth(3) 1. Reve
Slide 13: FY2022 Revenue Breakdown
BUSINESS & FINANCIAL HIGHLIGHTS FY2022 REVENUE BREAKDOWN Product Brand Penetration Digital Geography(1) Channel Penetration(2) 1. Geography is for Crocs Brand only. 13 13 2. Digital sales include Crocs.com, heydude.com, third-party market places (e.g. Tmall), and e-tailers (e.g. Amazon, Zappos, Zala
Slide 14: 2022 Financial Highlights
BUSINESS & FINANCIAL HIGHLIGHTS 2022 FINANCIAL HIGHLIGHTS B/(W) vs. 2022 PY Revenues ($B) $3.55 +58%(1) Gross Margin 52.3% (910) bp Adjusted Gross Margin(2) 54.4% (720) bp Adjusted SG&A as % of 26.7% 490 bp Revenue(2) Operating Margin 23.9% (560) bp Adjusted Operating Margin(2) 27.7% (240) bp Dilute
Slide 15: Update on Select Growth Drivers
UPDATE ON SELECT GROWTH DRIVERS
Slide 16: Importance of Sandals to the Crocs Brand
GROWTH DRIVERS IMPORTANCE OF SANDALS TO THE CROCS BRAND • $30B global footwear category • Our molded technologies, accessible price points, and strong go-to-market should allow us to compete effectively • Additional entry point for the Crocs Brand • High purchase frequency • Crocs Brand sandal consi
Slide 17: Expect Strong Sandal Growth in 2023
GROWTH DRIVERS EXPECT STRONG SANDAL GROWTH IN 2023 We expect strong sandal growth for the Crocs Brand in 2023 due to: • Planned newness, such as: ◦ Additional height ~$400M ◦ New uppers in popular Brooklyn style ◦ New Mellow flip ~$310M • Significant increase in sandal-specific marketing • Strong br
Slide 18: Focus on Key Categories to Drive Growth
GROWTH DRIVERS FOCUS ON 4 KEY CATEGORIES TO DRIVE GROWTH Broad-reaching, iconic Trend-driven with extended Culturally relevant, rooted in Functional design leveraging franchises with opening price price points and shorter street style and innovation with Crocs brand heritage with points, personaliza
Slide 19: Growing Crocs Brand Momentum Internationally
GROWTH DRIVERS GROWING CROCS BRAND MOMENTUM INTERNATIONALLY Asia Pacific Revenues ($M) EMEALA Revenues ($M) FY20 FY21 FY22 FY20 FY21 FY22 CC GROWTH (1) +22% +47% +46% +47% EIGHT CONSECUTIVE QUARTERS OF DOUBLE-DIGIT INTERNATIONAL REVENUE GROWTH 19 1. Revenue growth on a constant currency basis, which
Slide 20: Crocs Product & Marketing Innovation
GROWTH DRIVERS CROCS PRODUCT & MARKETING INNOVATION In 2023 we expect: • Record new product introductions • Strong pipeline of 60+ global brand partnerships across a healthy mix of celebrities, mega brands and licenses – of which ~25% will be regionally led • Invest a record amount of marketing – ov
Slide 21: HEYDUDE Progress
GROWTH DRIVERS HEYDUDE PROGRESS • Grew revenue 70% to $986M(1) by expanding distribution in the US with large, important wholesale partners • Staffed the entire leadership team and hired over 150 roles • Stabilized and expanded the manufacturing footprint • Developed a business systems roadmap • Exp
Slide 22: Brand Performance
BRAND PERFORMANCE
Slide 23: Crocs Brand Q4 Highlights
BRAND PERFORMANCE CROCS BRAND Q4 HIGHLIGHTS • Revenues +17% CC vs. PY (1) • North America DTC comparable sales +13% (1) • EMEALA +76% CC vs. PY (1) • Asia Pacific +75% CC vs. PY (1) • Celebrated 20 Years of Crocs Fandom in Croctober with giveaways, product launches, and a Croc Day Party in the Metav
Slide 24: Crocs Brand Q4 Revenue Growth
BRAND PERFORMANCE CROCS BRAND Q4 REVENUE GROWTH +0.3% +59% / 75% CC(1) +60% / 76% CC(1) Geography North America Asia Pacific EMEALA +22% +19% +13% Channel Digital Sales DTC Wholesale CC Growth(1) CC Growth(1,2) Comparable Growth(3) 1. Revenue growth on a constant currency basis, which is a Non-GAAP
Slide 25: Crocs Brand Q4 Revenue Breakdown
BRAND PERFORMANCE CROCS BRAND Q4 REVENUE BREAKDOWN Digital Geography Channel Penetration(1) 1. Digital sales include Crocs.com, third-party market places (e.g. Tmall), and e-tailers (e.g. Amazon, Zappos, Zalando) 25
Slide 26: Crocs Brand FY Highlights
BRAND PERFORMANCE CROCS BRAND FY HIGHLIGHTS • Revenues +19% CC vs. PY (1) ◦ North America DTC comparable sales +12% (1) ◦ EMEALA +47% CC vs. PY (1) ◦ Asia Pacific +47% CC vs. PY (1) • Launched innovative digital marketing campaigns with several collaborators, like Karol G, Spotify, and many others •
Slide 27: Crocs Brand FY Revenue Growth
BRAND PERFORMANCE CROCS BRAND FY REVENUE GROWTH +6% +35% / 47% CC(1) +32% / 47% CC(1) Geography North America Asia Pacific EMEALA +22% +15% +23% Channel Digital Sales DTC Wholesale CC Growth(1) CC Growth(1,2) Comparable Growth(3) 1. Revenue growth on a constant currency basis, which is a Non-GAAP Fi
Slide 28: Crocs Brand FY Revenue Breakdown
BRAND PERFORMANCE CROCS BRAND FY REVENUE BREAKDOWN Digital Geography Channel Penetration(1) 1. Digital sales include Crocs.com, third-party market places (e.g. Tmall), and e-tailers (e.g. Amazon, Zappos, Zalando) 28
Slide 29: HEYDUDE Brand Q4 Highlights
BRAND PERFORMANCE HEYDUDE BRAND Q4 HIGHLIGHTS • Q4 Revenues of $279M exceeded our initial guidance ◦ Revenue growth of +34% vs PY • Brand awareness +53% from Q2 to Q4(3) • Impacted by investment in media spending as well as strong traction in the family channel, where we are now a top 5 brand • Over
Slide 30: HEYDUDE Brand FY Highlights
BRAND PERFORMANCE HEYDUDE BRAND FY HIGHLIGHTS • FY Revenues of $896M exceeded previous guidance ◦ Revenue growth of +54% vs PY • Introduced an updated brand identity and launched new HEYDUDE brand campaign • Brand began rollout of influencer strategy with a portfolio of partners • Continuing to expa
Slide 31: Financial Outlook
FINANCIAL OUTLOOK
Slide 32: 2023E Guidance
FINANCIAL OUTLOOK 2023E GUIDANCE (numbers on reported basis, unless otherwise noted) Q1 2023E FY 2023E Total Revenues 27% to 30% 10% to 13%(1,2) Double-digit growth 6% to 8%; 9% to 11% CC(1) Mid-20% growth on a reported basis Adjusted Operating Margin(3) 24% to 25% ~26% Adjusted One Time Costs(4) ~
Slide 33: Capital Allocation Priorities
FINANCIAL OUTLOOK CAPITAL ALLOCATION PRIORITIES Deleverage to <2.0x Gross Balance Business Leverage by Deleveraging and Investment Share Repurchase Mid-2023 Invest to support long-term, Committed to working towards Long-term target of 1.0-1.5x profitable growth deleveraging quickly net leverage 33
Slide 34: Deleveraging Remains on Track
FINANCIAL OUTLOOK DELEVERAGING REMAINS ON TRACK Gross Debt / Adjusted EBITDA Outlook(1) ◦ Committed to quickly deleveraging and 3.1x targeting to be below 2.0x gross leverage by 2.25x mid-year 2023 ≤ 2.0x ◦ Share repurchases on hold until gross leverage is <2.0x, which we expect to occur by mid-2023
Slide 35: Market Leading Shareholder Returns
OUR RESULTS MARKET LEADING SHAREHOLDER RETURNS VALUE OF $100 INVESTED DECEMBER 31, 2017 Crocs, Inc. Dow Jones US Footwear Index Nasdaq Composite Index S&P 500 $1,200 $1,000 $800 $600 $400 $200 $- DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2017 2018 2019 2020 2021 2
Slide 36: Appendix
APPENDIX
Slide 37: 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 cost of sales,” “Non- GAAP gross profit,” “Non-GAAP gross margin,” “Non-GAAP gross margin by brand,” “N
Slide 38: Non-GAAP Reconciliation
APPENDIX NON-GAAP RECONCILIATION Non-GAAP Cost of Sales, Gross Profit, and Gross Margin Reconciliation: Year Ended Three Months Ended December 31, December 31, 2022 2021 2022 2021 (in thousands) GAAP revenues $ 945,162 $ 586,626 $ 3,554,985 $ 2,313,416 GAAP cost of sales $ 448,839 $ 214,602 $ 1,694,
Slide 39: 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: Year Ended Three Months Ended December 31, December 31, 2022 2021 2022 2021 (in thousands) GAAP revenues $ 945,162
Slide 40: Non-GAAP Reconciliation (Cont'd)
APPENDIX NON-GAAP RECONCILIATION (CONT’D) Non-GAAP Income from Operations and Operating Margin Reconciliation: Year Ended Three Months Ended December 31, December 31, 2022 2021 2022 2021 (in thousands) GAAP revenues $ 945,162 $ 586,626 $ 3,554,985 $ 2,313,416 GAAP income from operations $ 220,052 $
Slide 41: Non-GAAP Reconciliation (Cont'd)
APPENDIX NON-GAAP RECONCILIATION (CONT’D) Non-GAAP Income Tax Expense (Benefit) and Effective Tax Rate Reconciliation: Three Months Ended December Year Ended 31, December 31, 2022 2021 2022 2021 (in thousands) GAAP income from operations $ 220,052 $ 159,988 $ 850,756 $ 683,064 GAAP income before inc
Slide 42: 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, 2022 2021 2022 2021 (in thousands, except per share data) Numerator: GAAP net income $ 137,735 $ 154,853 $ 540,159 $ 725,694 Non-GAAP cost of sales adjustment
Slide 43: Non-GAAP Reconciliation (Cont'd)
APPENDIX NON-GAAP RECONCILIATION (CONT’D) Reconciliation of GAAP to Non-GAAP Financial Guidance: First Quarter 2023: Approximately: Non-GAAP operating margin reconciliation: ($ in millions, except per share data) GAAP operating margin 23% to 24% $190 to $200 Non-GAAP adjustments, primarily related t
Slide 44: Non-GAAP Reconciliation (Cont'd)
APPENDIX NON-GAAP RECONCILIATION (CONT’D) Non-GAAP Gross Margin Reconciliation by Brand: Year Ended Three Months Ended December 31, December 31, 2022 2021 2022 2021 GAAP Crocs Brand gross margin 55.3 % 63.4 % 56.3 % 61.4 % Non-GAAP adjustments: Distribution centers (1) 0.9 % 0.3 % 0.4 % 0.3 % Invent
Slide 45: Non-GAAP Reconciliation (Cont'd)
APPENDIX NON-GAAP RECONCILIATION (CONT’D) Non-GAAP Selling, General and Administrative Expenses Reconciliation by Brand: Year Ended Three Months Ended December 31, December 31, 2022 2021 2022 2021 GAAP Crocs Brand selling, general and administrative expenses as a percent of revenues 25.4 % 26.2 % 24
Slide 46: Non-GAAP Reconciliation (Cont'd)
APPENDIX NON-GAAP RECONCILIATION (CONT’D) Non-GAAP Income from Operations and Operating Margin Reconciliation by Brand: Year Ended Three Months Ended December 31, December 31, 2022 2021 2022 2021 GAAP Crocs Brand operating margin 29.9 % 37.2 % 32.0 % 37.2 % Non-GAAP cost of sales adjustments (1) 0.8
Slide 47: Slide 47