Slide 1: Investor Presentation
INVESTOR PRESENTATION October 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: The Path We Choose to Walk
O U R VA L U E S The Path We Choose to Walk P E O P L E - P U R P O S E D I N H E R E N T D E L I G H T F U L LY D E S I G N S I M P L I C I T Y D E M O C R AT I C We think people-first at We know smart doesn’t have We celebrate one-of-a-kinds every step. We design for to mean complicated. So we and
Slide 6: Global Business Update
GLOBAL BUSINESS UPDATE “ We achieved record third quarter revenue and earnings despite the challenges presented by the global COVID-19 pandemic. Our extraordinary performance and strong cash flow generation demonstrates the strength of the Crocs brand and product offering globally. I am tremendously
Slide 7: Q3 Highlights
GLOBAL BUSINESS UPDATE Q3 Highlights • Q3 record revenue of $362M, +16% vs. PY − Growth in every channel − Americas +26% with DTC comps +31% − EMEA +13% with double-digits increases in E-commerce and Wholesale • Digital growth of 36% to represent 38% of revenue with increases in every region • Retai
Slide 8: Best in Class Marketing Activations
GLOBAL BUSINESS UPDATE Best in Class Marketing Activations 8
Slide 9: Fueling Brand Strength Globally
GLOBAL BUSINESS UPDATE Fueling Brand Strength Globally COLLABORATIONS / CELEBRITIES Drive mass reach Double-digit growth in brand metrics Brand desirability, brand relevance and brand consideration each rose DD MASS INFLUENCERS for 2020 and over the past four years Drive mass engagement in our annua
Slide 10: Continued Strength in Digital
GLOBAL BUSINESS UPDATE Continued Strength in Digital • Digital commerce growth of 35.5% with growth in all regions • Strong e-commerce growth of 36.3% • Double-digit growth across multiple e-tail platforms and marketplaces Q3 Digital Penetration 60% 50% 42% 38% 31% 33% 27% 32% Americas Asia Pacific
Slide 11: Exceptional Third Quarter Results
GLOBAL BUSINESS UPDATE Exceptional Third Quarter Results +16% +380bps +70% +65% $361.7 $0.94 57.4% $75.4 $312.8 53.6% $0.57 $44.4 Revenue Adj. Gross Margin Adj. Operating Income Adj. Diluted EPS Q3 2019 Q3 2020 * Note USD millions for Revenue and Adjusted Operating Income. 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 +31% in Q3 2020 to 72% of footwear sales vs. 62% in Q3 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 ‒ 19% of footwear sales in Q3 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 • Revenues doubled in Q3 2020 • 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
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: Continue to Capture Strong Interest in Crocs at Work
POSITIONED FOR GLOBAL GROWTH Continue to Capture Strong Interest in Crocs at Work Following A Free Pair for Healthcare 17
Slide 18: 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 19: Digital-Led Route to Market
POSITIONED FOR GLOBAL GROWTH Digital-Led Route to Market Digital 37.7% Non-digital 62.3% 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: Q3 Financial Results
FINANCIAL RESULTS Q3 Financial Results Q3 vs. PY Revenue $361.7 +15.9%* Gross Margin 57.2% +480 bp Adj. Gross Margin 57.4% +380 bp Adj. SG&A as % of Revenue 36.6% +280 bp Adj. Operating Margin 20.8% +660 bp Diluted EPS $0.91 +78% Adj. Diluted EPS $0.94 +65% * Revenue growth on a constant currency ba
Slide 23: YTD Financial Results
FINANCIAL RESULTS FINANCIAL RESULTS YTD Financial Results Q3 YTD vs. PY Revenue $974.4 +1.9%* Gross Margin 53.5% +280 bp Adj. Gross Margin 54.0% +240 bp Adj. SG&A as % of Revenue 36.0% +210 bp Adj. Operating Margin 18.0% +450 bp Diluted EPS $1.89 +37% Adj. Diluted EPS $2.17 +44% * Revenue growth on
Slide 24: FY2020 Color
FINANCIAL RESULTS FY2020 Color Excluding the impact of any future COVID-related shutdowns in major markets, we expect: • Q4 revenue growth of 20-30%, which translates to FY2020 revenue growth of approximately 5-7% • 2020 tax rate of ~11% as we anticipate utilizing deferred tax assets • Capital expen
Slide 25: Appendix
APPENDIX 25
Slide 26: 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 September 30, Nine Months Ended September 30, Three Months Ended September 30, Nine Months Ended September 30, 2020
Slide 27: 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 September 30, Nine Months Ended September 30, Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 2020
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