Slide 1: Q1 2023 Investor Presentation
Q1 2023 Investor Presentation
Slide 2: Forward Looking Statement
Forward Looking Statement This document includes estimates, projections, and statements relating to our business plans, commitments, objectives, and expected operating results that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27
Slide 3: Contents
Contents • Business Highlights • Update on Select Growth Drivers • Q1 Financial Highlights • Financial Outlook • Appendix 3 3
Slide 4: Our Vision: Everyone Comfortable In Their Own Shoes
Our Vision Everyone Comfortable In Their Own Shoes Our Vision 4
Slide 5: Our Values
Delightfully People-Purposed Inherent Democratic Design Simplicity We celebrate one-of-a-kinds We think people-first at We know smart doesn’t and stand together with all every step. We design for have to mean complicated. different kinds. everything you do and So we keep things simple, everywhere yo
Slide 6: Business Highlights
Business Highlights 6
Slide 7: Crocs is a Proven Growth Company
Business Highlights Crocs is a Proven Growth Company Entrepreneurial Phase Overextension Transformation & Brand Re-ignition Profitable Growth 2002 to 2006 2008 to 2013 2014 to 2017 2018 to Present • Classic clog is born in • Over diversification of • Announced intention to refine strategy and earnin
Slide 8: Market-Leading Total Shareholder Return
Business Highlights Market-Leading Total Shareholder Return Value of $100 Invested December 31, 2017 Crocs, Inc. 5-year annualized TSR made it the #2 best performing stock had it been in the S&P 500 8
Slide 9: Our exceptional first quarter results are a testament to the strength of our brands
Business Highlights " Our exceptional first quarter results are a testament to the strength of our brands. The Crocs Brand grew 19.0% as we see a strong consumer response to our new clog and sandal introductions. The HEYDUDE brand is gaining momentum and experienced outstanding DTC growth. We are ra
Slide 10: Q1 2023 Highlights
Business Highlights Q1 2023 Highlights • Revenues of $884 million, +36% CC(1), grew in all brands, regions and channels ◦ Crocs Brand revenues +22% CC(1) and DTC comparable sales growth +19% ◦ Crocs Brand North America revenues +10% with 12% DTC comparable sales growth and 6% Wholesale CC growth ◦ C
Slide 11: Crocs, Inc. Investment Highlights
BusinessHighlights Business Highlights • A Global Leader in Casual Footwear with $160B Total Addressable Market • Two Iconic, High-Growth Scale Brands Aligned to Long-Term Consumer Trends Crocs, Inc. • Diversified Sources of Growth Across Brands, Investment Categories, Geographies and Channels Highl
Slide 12: Update on Select Growth Drivers
Update on Select Growth Drivers 12
Slide 13: TTM Q1 2023 Revenue Breakdown
Update on Select Growth Drivers Diversified Sources of Growth Product Brand TTM Q1 2023 Revenue Breakdown Penetration Digital Geography(1) Channel Penetration(2) Note: Data is for trailing twelve months ended March 31, 2023. 1. Geography is for Crocs Brand only. 2. Digital sales include crocs.com, h
Slide 14: Importance of Sandals to the Crocs Brand
Update on Select 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 B
Slide 15: Expect Strong Sandal Growth in 2023
Update on Select Growth Drivers Expect Strong Sandal Growth in 2023 ~$400 We expect strong sandal growth for the Crocs Brand in 2023 due to planned newness, such as: • Additional height ~$310 • New uppers in popular Brooklyn style Q1 2023 • Echo Slide +65% YoY Revenue Growth Significant increase in
Slide 16: Focus on Four Categories to Drive Growth
Update on Select Growth Drivers Focus on Four Categories to Drive Growth Everyday Style Street / Sport Adventure Broad-reaching, iconic franchises with Trend-driven with extended price points Culturally relevant, rooted in street style Functional design leveraging Crocs brand opening price points, p
Slide 17: Growing Crocs Brand Momentum Internationally
Update on Select Growth Drivers Growing Crocs Brand Momentum Internationally Asia Pacific Revenues EMEALA Revenues CC GROWTH(1) +22% +47% +52% +46% +47% +37% China revenues grew over 110% CC(1) in the first quarter 1. Revenue dollars in millions. Revenue growth on a constant currency basis, which is
Slide 18: Crocs Product & Marketing Innovation
Update on Select 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
Slide 19: Crocs Marketing Highlights
Update on Select Growth Drivers Crocs Marketing Highlights Select Partnerships • Sports licensing with NBA and MLB • Hello Kitty & Friends • Minecraft • Melting Sadness (China) • Western Hydro Research Select Marketing Campaigns & Media • New York Times feature emphasizing continued momentum post-pa
Slide 20: HEYDUDE Update
Update on Select Growth Drivers HEYDUDE Update 2022 • Acquisition exceeded expectations with brand revenues of nearly $1B(1), EPS accretion and significant debt paydown in the first year • Staffed the entire leadership team and hired over 150 roles • Stabilized and expanded the manufacturing footpri
Slide 21: Q1 Financial Highlights
Q1 Financial Highlights 21
Slide 22: Q1 2023 Financial Highlights
Q1 Financial Highlights Q1 2023 Financial Highlights B/(W) Q1 vs. PY Revenues ($M) $884 +36%(1) Gross Margin 53.9% +470 bp Adjusted Gross Margin(2) 54.2% 30 bp Adjusted SG&A as % of Revenue(2) 26.3% 100 bp Operating Margin 26.6% 860 bp Adjusted Operating Margin(2) 27.9% 130 bp Diluted EPS $2.39 +101
Slide 23: Q1 Revenue by Brand: $884M, $649M, $235M
Q1 Financial Highlights $884M $649M $235M HEYDUDE Brand Crocs, Inc. Crocs Brand +34% / 36% CC(1) +19% / 22% CC(1) +106% CC / +15% PF(1) Q1 2023 Revenue Growth +12% +19% 30% Crocs Brand Digital Crocs Brand DTC Sales CC Growth(1,2) Digital Penetration(2) Comp Growth(3) 1. Revenue growth on a constant
Slide 24: Q1 Channel Breakdown
Q1 Financial Highlights Q1 Channel Breakdown 1. Digital sales include Crocs.com, third-party market places (e.g. Tmall), and e-tailers (e.g. Amazon, Zappos, Zalando) 24
Slide 25: Crocs Brand Q1 Highlights
Q1 Financial Highlights Crocs Brand Q1 Highlights • Revenues +22% CC vs. PY ◦ North America DTC comparable sales +12% ◦ Asia Pacific +55% CC vs. PY ◦ EMEALA +25% CC vs. PY • Crocs ranked #6 preferred footwear brand for teens, equivalent to Spring '22, in Piper Sandler's Spring 2023 Taking Stock with
Slide 26: HEYDUDE Brand Q1 Highlights
Q1 Financial Highlights HEYDUDE Brand Q1 Highlights • Revenues of $235M, +106% CC vs PY / +15% on a PF basis(1) • HEYDUDE ranked #1 in casual footwear for men and women in L.E.K. report on footwear and apparel brand heat • HEYDUDE ranked #8 preferred footwear brand for teens, up from Spring '22, in
Slide 27: Financial Outlook
Financial Outlook 27 27
Slide 28: 2023E Guidance
Financial Outlook 2023E Guidance (numbers on reported basis, unless otherwise noted) Q2 2023E FY 2023E Total Revenue Growth 6% to 9% 11% to 14%(1) Revenue Growth -- 7% to 9%(1) Revenue Growth -- Mid-20% Adjusted Operating Margin(3) 26.0% 26.0% to 27.0% Adjusted One Time Costs(3) -- $30M Adjusted Tax
Slide 29: Capital Allocation Priorities
Financial Outlook Deleverage to Balance Business <2.0x Gross Deleveraging Investment Leverage by and Share mid-2023 Repurchase Capital Allocation Priorities Invest to support Committed to Long-term target of long-term, profitable working towards 1.0-1.5x net leverage growth deleveraging quickly 29
Slide 30: Deleveraging Remains on Track
Financial Outlook Deleveraging Remains on Track Gross Debt / Adjusted EBITDA Outlook(1) ◦ Committed to quickly deleveraging and targeting to 3.1x be below 2.0x adjusted gross leverage by mid-year 2023 2.1x Long Term ◦ Share repurchases on hold ≤ 2.0x Target until adjusted gross leverage 1.0x - 1.5x
Slide 31: Appendix
Appendix 31 31
Slide 32: 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,” “No
Slide 33: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation Non-GAAP Cost of Sales, Gross Profit, and Gross Margin Reconciliation: Three Months Ended March 31, 2023 2022 (in thousands) GAAP revenues $ 884,166 $ 660,148 GAAP cost of sales $ 407,796 $ 335,224 (1,191) Distribution centers (1) (3,281) HEYDUDE inventory fair value
Slide 34: 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: Three Months Ended March 31, 2023 2022 (in thousands) GAAP revenues $ 884,166 $ 660,148 GAAP selling, general and
Slide 35: 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, 2023 2022 (in thousands) GAAP revenues $ 884,166 $ 660,148 GAAP income from operations $ 234,928 $ 118,677 Non-GAAP cost of sales adjustments (1) 3,281 30,918 N
Slide 36: 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, 2023 2022 (in thousands) GAAP income from operations $ 234,928 $ 118,677 GAAP income before income taxes 191,766 99,060 Non-GAAP income from operations
Slide 37: Non-GAAP Reconciliation (Cont'd)
Appendix Non-GAAP Reconciliation (Cont'd) Non-GAAP Earnings Per Share Reconciliation: Three Months Ended March 31, 2023 2022 (in thousands, except per share data) Numerator: GAAP net income $ 149,543 $ 72,760 Non-GAAP cost of sales adjustments (1) 3,281 30,918 Non-GAAP selling, general and administr
Slide 38: Non-GAAP Reconciliation (Cont'd)
Appendix Non-GAAP Reconciliation (Cont'd) Reconciliation of GAAP to Non-GAAP Financial Guidance: Full Year 2023: Approximately: Non-GAAP operating margin and operating income reconciliation: GAAP operating margin 25% to 26% Non-GAAP adjustments, primarily related to capital investments to support gr
Slide 39: Non-GAAP Reconciliation (Cont'd)
Appendix Non-GAAP Reconciliation (Cont'd) Non-GAAP Gross Margin Reconciliation by Brand: Three Months Ended March Three Months Ended March 31, 31, 2023 2022 2023 2022 GAAP Crocs Brand gross margin 55.8 % 49.2 % GAAP HEYDUDE Brand gross margin 49.6 % 25.6 % Non-GAAP adjustments: Non-GAAP adjustments:
Slide 40: CROCS inc:
CROCS inc: