Slide 1: Q1 2022 Investor Presentation
Q1 2022 Investor Presentation May 2022
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 ◦ BUSINESS & FINANCIAL HIGHLIGHTS ◦ BRAND PERFORMANCE ◦ FINANCIAL OUTLOOK ◦ 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: Business & Financial Highlights
BUSINESS & FINANCIAL HIGHLIGHTS 6
Slide 7: CEO quote on Q1 revenue growth and raised outlook
BUSINESS & FINANCIAL HIGHLIGHTS Our first quarter revenue growth of 47% on a constant " currency basis is a testament to the underlying strength of the Crocs and HEYDUDE brands. Consumer demand remains strong giving us the confidence to raise our full year outlook for revenues to approximately $3.5
Slide 8: Broad-Based Revenue Growth in Q1 2022
BUSINESS & FINANCIAL HIGHLIGHTS BROAD-BASED REVENUE GROWTH IN Q1 2022 $660M $545M $115M Revenues Crocs Revenues HEYDUDE Revenues +44% / 47% CC +19% / 22% CC +17% +23% 32% Crocs DTC Digital Sales Growth (Organic CC) Digital Penetration Comp Growth 8
Slide 9: Q1 Revenue Breakdown
BUSINESS & FINANCIAL HIGHLIGHTS Q1 REVENUE BREAKDOWN Digital Brand(1) Geography(2) Channel Penetration(3) 58% 1. Revenues by brand are presented on a pro forma basis for HEYDUDE as if the acquisition had closed on January 1, 2022. 2. Geography is for Crocs Brand only. 9 3. Digital sales include Croc
Slide 10: Q1 2022 Financial Highlights
BUSINESS & FINANCIAL HIGHLIGHTS Q1 2022 FINANCIAL HIGHLIGHTS B/(W) Q1 vs. PY(1) Revenues ($M) $660 +47%(2) Gross Margin 49.2% (580) bp Adjusted Gross Margin(3) 53.9% (130) bp Adjusted SG&A as % of 27.3% 60 bp Revenue(3) Operating Margin 18.0% (910) bp Adjusted Operating Margin(3) 26.6% (70) bp Dilut
Slide 11: Brand Performance
BRAND PERFORMANCE 11
Slide 12: Crocs Brand Q1 Highlights
BRAND PERFORMANCE CROCS BRAND Q1 HIGHLIGHTS • Crocs brand revenues +22% CC vs. PY ◦ Digital revenue growth +23% CC vs. PY ◦ DTC growth of +20% CC vs. PY ◦ North America DTC growth of +19% vs. PY • Ranked #6 in Piper Sandler’s Spring 2022 Taking Stock with Teens survey, up two spots from last year •
Slide 13: Crocs Brand Q1 Revenue Breakdown
BRAND PERFORMANCE CROCS BRAND Q1 REVENUE BREAKDOWN Digital Geography Channel Penetration* 58% * Digital sales include Crocs.com, third-party market places (e.g. Tmall), and e-tailers (e.g. Amazon, Zappos, Zalando) 13
Slide 14: Crocs Brand Q1 Revenue Growth
BRAND PERFORMANCE CROCS BRAND Q1 REVENUE GROWTH Geography +20% +16% / 22% CC +18% / 27% CC Americas Asia EMEALA +23% +17% +23% Channel Digital Sales DTC Wholesale CC Growth CC Growth Comparable Growth 14
Slide 15: Building Crocs Brand to $5B+ by 2026E
BRAND PERFORMANCE BUILDING CROCS BRAND TO $5B+ BY 2026E PLANNED GROWTH INITIATIVES • Invest in digital to be 50%+ of long-term Crocs brand revenues or $2.5B+ • Grow Sandals revenues by 4x to $1.2B+ • Double Jibbitz revenues • Increase Asia region to become ~25% of long-term Crocs brand revenues • Gr
Slide 16: HEYDUDE Brand Q1 Highlights
BRAND PERFORMANCE HEYDUDE BRAND Q1 HIGHLIGHTS • Closed acquisition on February 17, 2022 • Q1 Revenues of $115M exceeded internal expectations ◦ On a pro forma basis, Q1 revenues were $205M, +81% vs PY • HEYDUDE ranked #9 in Piper Sandler’s Spring 2022; in top 10 for the second consecutive survey ◦ S
Slide 17: Building HEYDUDE Revenues to $1B+ by 2024
BRAND PERFORMANCE BUILDING HEYDUDE REVENUES TO $1B+ BY 2024 PLANNED GROWTH INITIATIVES • Invest in industry-leading marketing to build brand awareness • Enhance digital capabilities to further accelerate digital • Leverage Crocs strong wholesale relationships to enhance distribution • Leverage Crocs
Slide 18: Financial Outlook
FINANCIAL OUTLOOK 18
Slide 19: 2022E Guidance
FINANCIAL OUTLOOK 2022E GUIDANCE (numbers on reported basis, unless otherwise noted) Q2 2022E FY 2022E Total Revenues $918 to $957M ~$3.5B $718 to $737M (1) 20%+ +17% to 20% CC $200 to $220M $750 to $800M(2) Adjusted Operating Margin(3) ~26%(4) ~26% to 27%(5) Adjusted One Time Costs(3) ~$65M(6) ~$13
Slide 20: Long Term Guidance
FINANCIAL OUTLOOK LONG TERM GUIDANCE* Crocs, Inc. Revenues $5B+ $1B+ $6B+ Revenue Growth 17%+ 20%+ Adjusted Operating Margin 26%+ 26%+ 26%+ Adjusted Tax Rate ~25% Capital Expenditures ~3% of revenues * Crocs long-term guidance provided here is on a pre-acquisition standalone basis. Long term for Cro
Slide 21: Capital Allocation Priorities
FINANCIAL OUTLOOK CAPITAL ALLOCATION PRIORITIES Deleverage to Business Shareholder <2.0x Gross Investment Returns Leverage Invest to support long-term, Committed to working towards Share repurchases on hold profitable growth deleveraging quickly until gross leverage is <2.0x, which we do not expect
Slide 22: Leverage Outlook
FINANCIAL OUTLOOK LEVERAGE OUTLOOK Net Debt / Adjusted EBITDA Outlook ◦ Finished 2021 with net leverage <1x 2.9x ◦ Committed to quickly deleveraging and now targeting to be below 2.0x gross leverage by mid-year ≤ 2.0x 2023 ◦ Share repurchases on hold until gross leverage is <2.0x, which we do not 0.
Slide 23: Appendix
APPENDIX 23
Slide 24: Non-GAAP Reconciliation
APPENDIX NON-GAAP RECONCILIATION Non-GAAP Cost of Sales, Gross Profit, and Gross Margin Reconciliation: Three Months Ended March 31, 2022 2021 (in thousands) GAAP revenues $ 660,148 $ 460,098 GAAP cost of sales $ 335,224 $ 206,879 Distribution centers (1) (1,191) (985) HEYDUDE inventory fair value a
Slide 25: Non-GAAP Reconciliation (Cont'd)
APPENDIX NON-GAAP RECONCILIATION (CONT’D) Non-GAAP Selling, General and Administrative Expenses Reconciliation: Three Months Ended March 31, 2022 2021 (in thousands) GAAP revenues $ 660,148 $ 460,098 GAAP selling, general and administrative expenses $ 206,247 $ 128,533 HEYDUDE acquisition-related co
Slide 26: Non-GAAP Reconciliation (Cont'd)
APPENDIX NON-GAAP RECONCILIATION (CONT’D) Non-GAAP Income from Operations and Operating Margin Reconciliation: Three Months Ended March 31, 2022 2021 (in thousands) GAAP revenues $ 660,148 $ 460,098 GAAP income from operations $ 118,677 $ 124,686 Non-GAAP cost of sales adjustments(1) 30,918 985 Non-
Slide 27: 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 March 31, 2022 2021 (in thousands) GAAP income from operations $ 118,677 $ 124,686 GAAP income before income taxes 99,060 122,588 Non-GAAP income from operations
Slide 28: Non-GAAP Reconciliation (Cont'd)
APPENDIX NON-GAAP RECONCILIATION (CONT’D) Non-GAAP Earnings Per Share Reconciliation: Three Months Ended March 31, 2022 2021 (in thousands, except per share data) Numerator: GAAP net income $ 72,760 $ 98,398 Non-GAAP cost of sales adjustments (1) 30,918 985 Non-GAAP selling, general and administrati
Slide 29: Non-GAAP Reconciliation (Cont'd)
APPENDIX NON-GAAP RECONCILIATION (CONT’D) Reconciliation of GAAP to Non-GAAP Financial Guidance: Second Quarter 2022: Approximately: Non-GAAP operating margin reconciliation: GAAP operating margin 19% Non-GAAP adjustments, primarily associated with the HEYDUDE acquisition(1) 7% Non-GAAP operating ma
Slide 30: Non-GAAP Reconciliation (Cont'd)
APPENDIX NON-GAAP RECONCILIATION (CONT’D) Non-GAAP Cost of Sales, Gross Profit, and Gross Margin Reconciliation by Brand: Three Months Ended March 31, Three Months Ended March 31, 2022 2021 2022 2021 (in thousands) (in thousands) Crocs Brand GAAP revenues $ 545,225 $ 460,098 HEYDUDE Brand GAAP reven
Slide 31: Non-GAAP Reconciliation (Cont'd)
APPENDIX NON-GAAP RECONCILIATION (CONT’D) Non-GAAP Selling, General and Administrative Expenses Reconciliation by Brand: Three Months Ended March 31, 2022 2021 (in thousands) Crocs Brand GAAP revenues $ 545,225 $ 460,098 GAAP selling, general and administrative expenses $ 132,673 $ 98,573 Bad debt i
Slide 32: Non-GAAP Reconciliation (Cont'd)
APPENDIX NON-GAAP RECONCILIATION (CONT’D) Non-GAAP Income from Operations and Operating Margin Reconciliation by Brand: Three Months Ended March 31, 2022 2021 (in thousands) Crocs Brand GAAP income from operations $ 163,935 $ 154,819 Non-GAAP cost of sales adjustments(1) 2,991 985 Non-GAAP selling,
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