Slide 1: Investor Presentation May 2019
INVESTOR PRESENTATION MAY 2019
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…………………………………………....…….20 • Appendix……………………………………………………………………………22 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 and
Slide 6: Repositioned for Long-Term Success
REPOSITIONED FOR LONG-TERM SUCCESS 1 2 3 Simplify the Business to Improve the Quality of Generate Sustainable, Reduce Costs Revenues Profitable Revenue Growth Heavy Lifting Substantially Revenue Base Substantially Confident in Pathway to Complete More Profitable Growth Confident in Pathway to Growth
Slide 7: Sustainable and Profitable Growth Plan
SUSTAINABLE AND PROFITABLE GROWTH PLAN Product Channel Region 1 2 3 • Clogs: Innovate & grow • E-commerce: double digit • Asia: largest long-term clog relevance growth continues growth potential • Sandals: Significant long • Wholesale: greatest • Americas: strong growth term growth potential growth
Slide 8: Grow Clog Relevance
GROW CLOG RELEVANCE • Market leader in $4B* growing global category • Grew clog revenues by 13% in 2018 to ~55% of footwear sales ‒ 1Q19 sales grew 11.5% to ~56% of footwear sales • Strategic goal: drive Clog Relevance by ‒ Impactful collaborations ‒ Trend right colors and graphics ‒ Relevant licens
Slide 9: Sandals: Significant Long-Term Growth Opportunity
SANDALS: SIGNIFICANT LONG-TERM GROWTH OPPORTUNITY Essential, e.g. CrocBand Flip: • $23B* fragmented global casual sandal** market with no clear market leader • Grew sandal revenues by 19% in 2018 to ~23% of footwear sales ‒ On top of 26.4% growth in 2017 ‒ 1Q19 sales grew 11.8% to ~27% of footwear s
Slide 10: Invest in New, Comfort Focused Technology
INVEST IN NEW, COMFORT FOCUSED TECHNOLOGY • Our LiteRide™ collection features foam footbeds, our latest breakthrough in world-class comfort. Engineered to make you feel sensational on every step along life’s winding path. ‒ Next generation LiteRide™ foam insoles are super-soft, incredibly lightweigh
Slide 11: Growth Ignited by Global Social & Digital Marketing
OUR GROWTH WILL BE IGNITED BY POWERFUL GLOBAL SOCIAL & DIGITAL MARKETING BRAND AMBASSADORS • Evolving Come As You Are campaign to incorporate impactful local brand ambassadors and influencer activations • Focusing on driving clog relevance and sandal awareness • Expanding digital reach and engagemen
Slide 12: Double Digit E-Commerce Growth Continues
DOUBLE DIGIT E-COMMERCE GROWTH CONTINUES Primary focus on company owned e-commerce and controlling E-COMMERCE REVENUE brand presence on key marketplaces • E-commerce: Crocs operated e-commerce sites ‒ Fast growing distribution channel driven by global consumer adoption and more effective digital mar
Slide 13: E-Tail and Distributors Drive Wholesale
E-TAIL AND DISTRIBUTORS DRIVE WHOLESALE • E-tailers and distributors represent approximately 2018 DISTRIBUTOR FOOTPRINT half of the global wholesale business • Multibrand e-tailers are gaining share globally ‒ Crocs: achieving consistent double-digit e-tail growth ‒ Elevating the brand representatio
Slide 14: Prioritize Outlet Growth Within Retail
PRIORITIZE OUTLET GROWTH WITHIN RETAIL • Retail fleet has been rightsized and majority is STORE COUNT now focused on outlet stores; ended 1Q19 with 372 stores 585 559 558 • Outlet merchandising strategy has been 447 repositioned to majority “Built for Outlet” assortments 383 • In Americas, outlet fl
Slide 15: Asia Is Largest Growth Opportunity
ASIA IS LARGEST GROWTH OPPORTUNITY Asia – Most opportunity for growth • Increase brand recognition GLOBAL CLOG & SANDAL FOCUS • Optimize China opportunity • Strong e-commerce growth and rapid marketplace expansion • Multichannel growth in direct markets: China, India, Japan and South Korea • Strong
Slide 16: Financial Information
FINANCIAL INFORMATION crocs
Slide 17: Recent Financial Results
RECENT FINANCIAL RESULTS FULL YEAR 2018 1Q 2019 A very successful year: A great start to 2019: • Robust revenue growth • Revenues: $295.9M, up 4.5% – 6.3% growth despite store closures and business model changes reducing revenues by ~$60M – On a constant currency basis and excluding $6M impact of st
Slide 18: 2Q 2019 Financial Guidance
2Q 2019 FINANCIAL GUIDANCE (AS OF 5/7/19) • Revenues: $350 - $360M vs. $328.0M in 2Q18 ‒ Expecting a negative currency impact of ~$10M and store closures to reduce revenues by ~$6M ‒ Positively impacted by the Easter shift, which results in DTC sales associated with the holiday shifting into Q2, and
Slide 19: Full Year 2019 Guidance
FULL YEAR 2019 GUIDANCE (AS OF 5/7/19) • Revenues: Increase 5-7% over $1,088.2M in 2018 ‒ Negative currency impact of ~$25M and store closures to reduce revenues by ~$20M • Gross margin ~49.5% vs. 51.5% in 2018 ‒ Non-recurring charges related to the new DC are expected to reduce gross margin by ~100
Slide 20: Key Investment Considerations
KEY INVESTMENT CONSIDERATIONS 20
Slide 21: Key Investment Considerations
KEY INVESTMENT CONSIDERATIONS Successful business transformation will An unmistakable icon recognized A powerful global brand with a drive further increases in shareholder around the world large, democratic consumer base value • Growing revenues and gross margin while reducing SG&A; a sustainable, p
Slide 22: Appendix
APPENDIX crocs 22
Slide 23: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Non-GAAP cost of sales and gross margin reconciliation: GAAP revenues GAAP cost of sales ‘New distribution center Other Total adjustments ‘Non-GAAP cost of sales GAAP gross margin GAAP gross margin as a percent of revenues, Non-GAAP gross margin Non-GAAP gross margin as a per
Slide 24: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION [Non-GAAP earnings per share reconciliation: Namersior ‘GAAP net income attributable to commen stockholders Less: GAAP adjustment for nct income allocable to Series A Preferred stockholders GAAP reausining net income evailable to commen stocknolders- basic and diluted GAAP ne
Slide 25: Highlights of Blackstone Deal
HIGHLIGHTS OF BLACKSTONE DEAL • Background: In 2014, Blackstone invested $200M in Crocs Preferred Shares ‒ Earned 6%/$12M dividend annually and a net income allocation in any quarter with positive earnings ‒ Convertible at $14.50/sh into ~13.8M shares of Common Stock. Crocs could only force conversi
Slide 26: Framework for a LDD Operating Margin
FRAMEWORK FOR A LDD OPERATING MARGIN Drive Double Digit E-commerce and Modest 1 Wholesale Revenue Growth Sustainable Gross Margin in the 2 Low 50% Range Core Molded Product generates high quality revenue SG&A in the Low 40% Range 3 Leverage SG&A over growing revenue base 26
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