Slide 1: Investor Presentation February 2020
INVESTOR PRESENTATION FEBRUARY 2020
Slide 2: Forward-Looking Statement
FORWARD-LOOKING STATEMENT Some information provided in this document will be forward-looking, and accordingly, is subject to the Safe Harbor provisions of the federal securities law. These statements include, but are not limited to, statements regarding future revenues, gross margin, selling, genera
Slide 3: Agenda
AGENDA • Positioned for Growth………………………………………………………………4 • Financial Information………………………………………………………………16 • Key Investment Considerations…………………………………………....…….22 • Appendix……………………………………………………………………………24 3
Slide 4: Positioned for Growth
POSITIONED FOR GROWTH crocs
Slide 5: A Powerful Brand Positioned for Global Growth
A POWERFUL BRAND POSITIONED FOR GLOBAL GROWTH Scale Brand: Iconic Product: Democratic Brand: Top 10 For men, non-athletic The Classic Clog women, global footwear brand and kids Globally Recognized: Global Reach: World Class Talent: ~65%* Global Aided Brand Awareness Distributed in Driving product an
Slide 6: Long-Term Growth Drivers
LONG-TERM GROWTH DRIVERS Product & Channel Region Marketing 1 2 3 • Clogs: Innovate & grow • DTC: double digit growth • Asia: largest long-term clog relevance continues in E-commerce growth potential and prioritization of outlets • Sandals: Significant long- • Americas: strong growth as the most pro
Slide 7: Grow Clog Relevance
GROW CLOG RELEVANCE • Market leader in growing global category that has grown to $5B* • Crocs grew clog revenues by 25% in 2019 to ~61% of footwear sales • The key drivers of Clog growth and relevance are: ‒ Impactful collaborations across the globe ‒ Personalization with expanded Jibbitz charms • S
Slide 8: Sandals: Significant Long-Term Growth Opportunity
SANDALS: SIGNIFICANT LONG-TERM GROWTH OPPORTUNITY • Opportunity in growing $30B* fragmented global casual sandal market with no clear market leader • Crocs has had a consistent track record of growth and grew sandal revenues by 10% in 2019 to ~22% of footwear sales ‒ 3rd consecutive year of double-d
Slide 9: Invest in New, Visible Comfort Technology
INVEST IN NEW, VISIBLE COMFORT TECHNOLOGY • Our LiteRide™ collection, featuring foam footbeds, is a top 5 franchise for Crocs ‒ LiteRide™ comfort technology will be leveraged in other collections including Brooklyn sandals and Crocs@Work™ • We will unveil the LiteRide™ 2.0 collection in 2021 as our
Slide 10: Personalization with Jibbitz Charms
PERSONALIZATION WITH JIBBITZ CHARMS • Personalization is a global megatrend that drives relevance for the Crocs brand • Jibbitz™ provide consumers with a fun and unique way to personalize their clogs and sandals at point of purchase • The effect we see is an overall increase in clog and sandal sales
Slide 11: A Strategy Designed to Drive Brand Heat
A STRATEGY DESIGNED TO DRIVE BRAND HEAT CELEBRITIES DRIVES MASS REACH MASS INFLUENCERS DRIVES MASS ENGAGEMENT : INTEREST-BASED INFLUENCERS DRIVES BRAND RELEVANCE UGC & EMPLOYEES DRIVES TRUST + LOCAL WOM : • #7 among all teens as a preferred footwear brand, up from 13 last year and 27 two years ago i
Slide 12: Growth Ignited by Global Social & Digital Marketing
OUR GROWTH WILL BE IGNITED BY POWERFUL GLOBAL SOCIAL & DIGITAL MARKETING BRAND AMBASSADORS • 2020: year 4 of “Come As You Are” – the evolution will continue - Priyanka Chopra-Jonas and Yang Mi joined as brand ambassadors • Focusing on driving clog relevance and sandal awareness • Expanding digital r
Slide 13: DTC Will Be Led by E-commerce Growth & Outlets
DTC WILL BE LED BY E-COMMERCE GROWTH & OUTLETS DTC Comps • E-commerce: Drive elevated consumer experience and more effective digital marketing 2019 ‒ Investment in people and technologies to execute e-commerce growth roadmap Americas 21.0% • Marketplaces: Expand direct participation in leading globa
Slide 14: E-tail and Distributors Drive Wholesale
E-TAIL AND DISTRIBUTORS DRIVE WHOLESALE DISTRIBUTOR FOOTPRINT • E-tailers and distributors represent approximately half of the global wholesale business • Multibrand E-tailers are gaining share globally ‒ Crocs: achieving consistent double-digit E- tail growth with elevated brand representation, cle
Slide 15: Asia Is Largest Growth Opportunity
ASIA IS LARGEST GROWTH OPPORTUNITY Asia – Greatest growth opportunity long-term • Increase brand recognition and drive clog relevance in China with new Tier 1 celebrity, Yang Mi • Multichannel growth in Japan and South Korea • Strong E-commerce growth supported by participation on key marketplaces A
Slide 16: Financial Information
FINANCIAL INFORMATION crocs
Slide 17: Historical Financial Results
HISTORICAL FINANCIAL RESULTS FULL YEAR 2019 Q4 2019 A very successful year: A great fourth quarter: • Record revenues • Record Revenues: $263.0M up 21.8% – 13% growth to a record of $1.2B despite store closures – Up 24% on a constant currency basis and excluding impact of and currency reducing reven
Slide 18: Q1 2020 Financial Guidance
Q1 2020 FINANCIAL GUIDANCE (ISSUED 02/27/20) • Q1 Revenues: $305M – $325M (up 3.1% – 9.8%) vs. $296M in Q1 19 ‒ Expecting a negative currency impact of ~$3M; and ‒ Estimated negative impact from coronavirus in Asia region of $20M-$30M • Q1 Operating margin to be between 9-12% compared to 11.0% in Q1
Slide 19: Full Year 2020 Financial Guidance
FULL YEAR 2020 FINANCIAL GUIDANCE (ISSUED 02/27/20) • FY Revenues: Up 8-12% vs $1,231M in 2019 ‒ Expecting a negative currency impact of ~$10M; and ‒ Estimated negative impact from coronavirus in Asia region of $40M-$60M • FY Operating margin to be between 11-13% vs. 10.5% in 2019 ‒ Estimated adjust
Slide 20: Changing How We Report Direct-to-Consumer and Digital
IN 2020, WE WILL BE CHANGING HOW WE REPORT ON OUR DIRECT-TO-CONSUMER AND DIGITAL BUSINESSES FROM: TO: • Separate reporting for: • Combined reporting on Direct-to-Consumer that will include both E-commerce and Retail • E-Commerce Revenue and Comps • Reporting on % Digital revenue which will • Owned R
Slide 21: Key Investment Considerations
KEY INVESTMENT CONSIDERATIONS 21
Slide 22: Key Investment Considerations
KEY INVESTMENT CONSIDERATIONS We are confident that our strategic plan will drive long-term, sustainable growth An unmistakable icon recognized A powerful global brand with a around the world large, democratic consumer base • Growing revenues to drive a sustainable, profitable business model • Proje
Slide 23: Appendix
APPENDIX crocs
Slide 24: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Non-GAAP cost of sales and gross margin reconciliation: Non-GAAP selling, general and administrative expenses reconciliation: Three Months Ended Year Ended Three Months Ended Year Ended December 31, December 31, December 31, December 31, 2019 2018 2019 2018 2019 2018 2019 201
Slide 25: Non-GAAP Reconciliation (Cont'd)
NON-GAAP RECONCILIATION (CONT’D) Non-GAAP income (loss) from operations and operating margin reconciliation: Non-GAAP income tax expense (benefit) and effective tax rate reconciliation: Three Months Ended Year Ended Three Months Ended Year Ended December 31, December 31, December 31, December 31, 20
Slide 26: Non-GAAP Reconciliation (Cont'd)
NON-GAAP RECONCILIATION (CONT’D) Non-GAAP earnings per share reconciliation: (1) Non-GAAP earnings per share reconciliation: (1) Three Months Ended Year Ended Three Months Ended Year Ended December 31, December 31, December 31, December 31, 2019 2018 2019 2018 2019 2018 2019 2018 (in thousands, exce
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