Crocs, Inc. Reports First Quarter Revenue Growth of 44%
Raises Full Year Revenue and Operating Margin Guidance
BROOMFIELD, Colo., May 5, 2022 /PRNewswire/ --Crocs, Inc. (NASDAQ: CROX), a world leader in innovative casual footwear for women, men, and children, today announced its first quarter 2022 financial results.
"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," said Andrew Rees, Chief Executive Officer. "Consumer demand remains strong giving us the confidence to raise our full year outlook for revenue to approximately $3.5 billion, adjusted operating margin to 26% to 27%, and adjusted diluted earnings per share to $10.05 to $10.65."
First Quarter 2022 Highlights
- Consolidated revenues of $660.1 million increased 43.5%, or 46.7% on a constant currency basis, as compared to 2021.
- Crocs Brand revenues of $545.2 million increased 18.5%, or 21.7% on a constant currency basis, as compared to 2021.
- HEYDUDE Brand revenues were $114.9 million for the period following the closing of the acquisition on February 17, 2022 through March 31, 2022 (the "Partial Period").
- Direct-to-consumer ("DTC") revenues grew 34.6% as compared to 2021. Crocs Brand DTC revenues grew 18.2%, or 19.7% on a constant currency basis, as compared to prior year.
- Crocs Brand digital sales grew 20.3%, or 23.5% on a constant currency basis, to represent 32.8% of Crocs Brand revenues versus 32.3% in prior year. HEYDUDE digital penetration was 25.9% of HEYDUDE Brand revenues.
First Quarter 2022 Operating Results
Amounts referred to as "Adjusted" or "Non-GAAP" are Non-GAAP measures and include adjustments that are described under the heading "Reconciliation of GAAP Measures to Non-GAAP Measures." A reconciliation of these amounts to their GAAP counterparts are contained in the schedules below.
- Revenues were $660.1 million, an increase of 43.5% from the same period last year, or 46.7% on a constant currency basis. DTC revenues grew 34.6%, and wholesale revenues grew 48.7%.
- Gross margin of 49.2% decreased 580 basis points compared to 55.0% in the same period last year. Crocs Brand gross margin of 54.4% decreased 60 basis points driven by $24.6 million, or 450 basis points, of incremental air freight costs, mostly offset by stronger average selling prices. Adjusted gross margin of 53.9% fell 130 basis points compared to the same period last year. Adjusted gross margin excludes $30.9 million of costs, including a $27.9 million HEYDUDE inventory fair value adjustment and a $1.8 million Russia inventory reserve.
- Selling, general, and administrative ("SG&A") expenses of $206.2 million increased from $128.5 million in the same period last year, and SG&A as a percent of revenues increased to 31.2% from 27.9% in prior year. Adjusted SG&A improved to 27.3% of revenues versus 27.9% for the same period last year. Adjusted SG&A excludes $25.9 million of costs, including $20.6 million of HEYDUDE acquisition-related expenses and $5.3 million of bad debt associated with our pause in Russia.
- Income from operations declined to $118.7 million from $124.7 million for the same period last year, due to increased air freight and acquisition expenses, and operating margin decreased to 18.0% from 27.1%. Adjusted income from operations rose 39.6% to $175.5 million and adjusted operating margin was 26.6% compared to 27.3% for the same period last year.
- Diluted earnings per share were $1.19, as compared to $1.47 for the same period last year due to increased air freight and acquisition expenses. Adjusted diluted earnings per share increased 37.6% to $2.05 compared to $1.49 for the same period last year.
First Quarter 2022 Brand Summary
- Crocs Brand: Revenues increased 18.5%, or 21.7% on a constant currency basis, to $545.2 million compared to $460.1 million for the same period last year. Wholesale revenues increased 18.7%, or 22.9% on a constant currency basis. DTC revenues increased 18.2%, or 19.7% on a constant currency basis.
- North America revenues of $319.5 million increased 19.5% on both a reported and on a constant currency basis, compared to $267.3 million for the same period last year.
- Asia Pacific revenues of $95.8 million increased 16.0%, or 22.1% on a constant currency basis, compared to $82.6 million for the same period last year.
- Europe, Middle East, Africa, and Latin America ("EMEALA") revenues of $129.9 million increased 17.9%, or 26.8% on a constant currency basis, compared to $110.2 million for the same period last year.
- HEYDUDE Brand: Revenues during the Partial Period were $114.9 million.
First Quarter 2022 Consolidated Channel Summary
- DTC: Revenues increased 34.6% to $229.0 million compared to $170.1 million for the same period last year, or 36.1% on a constant currency basis.
- Wholesale: Revenues increased 48.7% to $431.2 million compared to $290.0 million for the same period last year, or 52.9% on a constant currency basis.
Balance Sheet and Cash Flow
- Cash and cash equivalents were $172.0 million as of March 31, 2022, compared to $213.2 million as of December 31, 2021.
- Inventories increased to $407.6 million as of March 31, 2022, compared to $213.5 million as of December 31, 2021 and $196.5 million as of March 31, 2021. This increase was driven primarily by the addition of HEYDUDE and increased in transit inventory for the Crocs Brand.
- Capital expenditures during the three months ended March 31, 2022 were $39.8 million, compared to $8.0 million for the same period last year.
- Borrowings as of March 31, 2022 were $2,876.4 million compared to borrowings as of December 31, 2021 of $771.4 million, driven primarily by borrowings used to finance a portion of the acquisition of HEYDUDE. Our liquidity position remains strong with $172.0 million in cash and cash equivalents and $371.1 million in available borrowing capacity as of March 31, 2022.
Financial Outlook
Full Year 2022
With respect to 2022, we expect:
- Consolidated revenues to be approximately $3.5 billion, representing growth between 52% and 55% compared to 2021.
- Revenue growth for the Crocs Brand, excluding HEYDUDE, to exceed 20% compared to 2021.
- Revenues for the HEYDUDE Brand to be approximately $750 to $800 million on a reported basis, implying $840 to $890 million, including the period of time prior to the closing of the acquisition.
- Gross margin to include an incremental $75 million of air freight in the first half of 2022.
- Adjusted operating margin to be approximately 26% to 27%.
- Non-GAAP adjustments of $75 million of non-cash costs in cost of sales, primarily related to the write up of HEYDUDE inventory costs to fair market value at the close of acquisition, and an additional $60 million in SG&A costs.
- GAAP tax rate of approximately 25% and Non-GAAP effective tax rate of approximately 22%.
- Adjusted diluted earnings per share of $10.05 to $10.65.
- Capital expenditures of approximately $170 to $200 million, primarily for supply chain investments to support growth.
- Gross leverage to be below 2.0x by mid-year 2023 following strong earnings and cash flow expectations for 2022.
Second Quarter 2022
With respect to the second quarter of 2022, we expect:
- Consolidated revenues to be approximately $918 to $957 million, implying approximately 43% to 49% growth compared to second quarter 2021 revenues of $641 million.
- Crocs Brand revenue growth to be approximately 17% to 20% on a constant currency basis, and 12% to 15% on a reported basis, which implies revenues of approximately $718 to $737 million on a reported basis. The impact to prior year of pausing Russia is approximately $20 million.
- HEYDUDE Brand revenues of approximately $200 to $220 million.
- Adjusted operating margin of approximately 26%, including an estimated $50 million impact from air freight.
- Non-GAAP adjustments of an additional $45 million of non-cash costs in cost of sales, primarily related to the write up of HEYDUDE inventory costs to fair market value at the close of the acquisition, and $20 million in SG&A costs.
Conference Call Information
A conference call to discuss first quarter 2022 results is scheduled for today, Thursday, May 5, 2022, at 8:30 am ET. To receive conference call details, please register at the Investor Relations section of the Crocs website, investors.crocs.com. The webcast will also be available live and on replay through May 5, 2023 at this site.
About Crocs, Inc.
Crocs, Inc. (Nasdaq: CROX) is a world leader in innovative casual footwear for women, men, and children, combining comfort and style with a value that consumers know and love. The Company's brands include Crocs and HEYDUDE and its products are sold in more than 85 countries through wholesale and direct-to-consumer channels. For more information on Crocs, Inc. please visit investors.crocs.com. To learn more about our brands, please visit www.crocs.com or www.heydudeshoesusa.com or follow @Crocs or @heydudeshoes on Facebook, Instagram and Twitter.
Forward Looking Statements
This press release 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 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements include, but are not limited to, statements regarding potential impacts to our business related to our supply chain challenges, the COVID-19 pandemic, our financial condition, brand and liquidity outlook, and expectations regarding our future revenue, margins, non-GAAP adjustments, tax rate, earnings per share and capital expenditures, the acquisition of HEYDUDE and benefits thereof, Crocs' strategy, plans, objectives, expectations (financial or otherwise) and intentions, future financial results and growth potential, statements regarding full year and second quarter 2022 financial outlook and future profitability, cash flows, and brand strength, anticipated product portfolio and our ability to deliver sustained, highly profitable growth. These statements involve known and unknown risks, uncertainties, and other factors, which may cause our actual results, performance, or achievements to be materially different from any future results, performances, or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the following: our expectations regarding supply chain disruptions; the COVID-19 pandemic and related government, private sector, and individual consumer responsive actions; current global financial conditions, including economic impacts resulting from the COVID-19 pandemic; the effect of competition in our industry; our ability to effectively manage our future growth or declines in revenues; changing consumer preferences; our ability to maintain and expand revenues and gross margin; our ability to accurately forecast consumer demand for our products; our ability to successfully implement our strategic plans; our ability to develop and sell new products; our ability to obtain and protect intellectual property rights; the effect of potential adverse currency exchange rate fluctuations and other international operating risks; and other factors described in our most recent Annual Report on Form 10-K under the heading "Risk Factors" and our subsequent filings with the Securities and Exchange Commission. Readers are encouraged to review that section and all other disclosures appearing in our filings with the Securities and Exchange Commission.
All information in this document speak only as of the date of this press release. We do not undertake any obligation to update publicly any forward-looking statements, except as required by applicable law.
Category:Investors
Investor Contact: | Cori Lin, Crocs, Inc. | |
(303) 848-5053 | ||
clin@crocs.com | ||
PR Contact: | Melissa Layton, Crocs, Inc. | |
(303) 848-7885 | ||
mlayton@crocs.com |
CROCS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share data) | |||
Three Months Ended March 31, | |||
2022 | 2021 | ||
Revenues | $ 660,148 | $ 460,098 | |
Cost of sales | 335,224 | 206,879 | |
Gross profit | 324,924 | 253,219 | |
Selling, general and administrative expenses | 206,247 | 128,533 | |
Income from operations | 118,677 | 124,686 | |
Foreign currency gains (losses), net | 480 | (504) | |
Interest income | 102 | 27 | |
Interest expense | (19,252) | (1,632) | |
Other income (expense), net | (947) | 11 | |
Income before income taxes | 99,060 | 122,588 | |
Income tax expense | 26,300 | 24,190 | |
Net income | $ 72,760 | $ 98,398 | |
Net income per common share: | |||
Basic | $ 1.22 | $ 1.50 | |
Diluted | $ 1.19 | $ 1.47 | |
Weighted average common shares outstanding: | |||
Basic | 59,823 | 65,458 | |
Diluted | 60,896 | 66,848 | |
CROCS, INC. AND SUBSIDIARIES EARNINGS PER SHARE (UNAUDITED) (in thousands, except per share data) | |||
Three Months Ended March 31, | |||
2022 | 2021 | ||
Numerator: | |||
Net income | $ 72,760 | $ 98,398 | |
Denominator: | |||
Weighted average common shares outstanding - basic | 59,823 | 65,458 | |
Plus: Dilutive effect of stock options and unvested restricted stock units | 1,073 | 1,390 | |
Weighted average common shares outstanding - diluted | 60,896 | 66,848 | |
Net income per common share: | |||
Basic | $ 1.22 | $ 1.50 | |
Diluted | $ 1.19 | $ 1.47 | |
CROCS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share and par value amounts) | |||
March 31, | December 31, | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 171,969 | $ 213,197 | |
Restricted cash - current | 34 | 65 | |
Accounts receivable, net of allowances of $23,041 and $20,715, respectively | 375,750 | 182,629 | |
Inventories | 407,589 | 213,520 | |
Income taxes receivable | 24,536 | 22,301 | |
Other receivables | 16,599 | 12,252 | |
Prepaid expenses and other assets | 42,061 | 22,605 | |
Total current assets | 1,038,538 | 666,569 | |
Property and equipment, net of accumulated depreciation and amortization of $85,601 and | 135,649 | 108,398 | |
Intangible assets, net of accumulated amortization of $112,011 and $108,167, respectively | 1,895,980 | 28,802 | |
Goodwill | 642,467 | 1,600 | |
Deferred tax assets, net | 547,733 | 567,201 | |
Restricted cash | 3,365 | 3,663 | |
Right-of-use assets | 199,805 | 160,768 | |
Other assets | 7,123 | 8,067 | |
Total assets | $ 4,470,660 | $ 1,545,068 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | $ 202,919 | $ 162,145 | |
Accrued expenses and other liabilities | 185,969 | 166,887 | |
Income taxes payable | 67,310 | 16,279 | |
Current borrowings | 25,173 | — | |
Current operating lease liabilities | 49,414 | 42,932 | |
Total current liabilities | 530,785 | 388,243 | |
Long-term deferred tax liability | 329,950 | — | |
Long-term income taxes payable | 226,188 | 219,744 | |
Long-term borrowings | 2,851,256 | 771,390 | |
Long-term operating lease liabilities | 181,065 | 149,237 | |
Other liabilities | 2,246 | 2,372 | |
Total liabilities | 4,121,490 | 1,530,986 | |
Commitments and contingencies | |||
Stockholders' equity: | |||
Preferred stock, par value $0.001 per share, 5.0 million shares authorized including | — | — | |
Common stock, par value $0.001 per share, 250.0 million shares authorized, 109.2 million | 109 | 106 | |
Treasury stock, at cost, 47.7 million and 47.6 million shares, respectively | (1,690,312) | (1,684,262) | |
Additional paid-in capital | 774,562 | 496,036 | |
Retained earnings | 1,351,800 | 1,279,040 | |
Accumulated other comprehensive loss | (86,989) | (76,838) | |
Total stockholders' equity | 349,170 | 14,082 | |
Total liabilities and stockholders' equity | $ 4,470,660 | $ 1,545,068 | |
CROCS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) | |||
Three Months Ended March 31, | |||
2022 | 2021 | ||
Cash flows from operating activities: | |||
Net income | $ 72,760 | $ 98,398 | |
Adjustments to reconcile net income to net cash provided by operating | |||
Depreciation and amortization | 7,895 | 8,054 | |
Operating lease cost | 14,231 | 14,832 | |
Share-based compensation | 8,275 | 8,054 | |
Other non-cash items | 9,695 | (1,844) | |
Changes in operating assets and liabilities, net of acquired assets and | |||
Accounts receivable | (130,661) | (81,186) | |
Inventories | (28,124) | (23,795) | |
Prepaid expenses and other assets | (14,584) | 16,599 | |
Accounts payable, accrued expenses and other liabilities | 6,490 | 6,332 | |
Right-of-use assets and operating lease liabilities | (14,742) | (15,294) | |
Cash provided by (used in) operating activities | (68,765) | 30,150 | |
Cash flows from investing activities: | |||
Purchases of property, equipment, and software | (39,786) | (7,983) | |
Acquisition of HEYDUDE, net of cash acquired | (2,031,765) | — | |
Other | 85 | — | |
Cash used in investing activities | (2,071,466) | (7,983) | |
Cash flows from financing activities: | |||
Proceeds from notes issuance | — | 350,000 | |
Proceeds from borrowings | 2,240,163 | 40,000 | |
Repayments of borrowings | (85,000) | (220,000) | |
Deferred debt issuance costs | (49,486) | (7,531) | |
Repurchases of common stock | — | (50,000) | |
Repurchases of common stock for tax withholding | (6,288) | (10,462) | |
Other | 95 | 236 | |
Cash provided by financing activities | 2,099,484 | 102,243 | |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (810) | (2,437) | |
Net change in cash, cash equivalents, and restricted cash | (41,557) | 121,973 | |
Cash, cash equivalents, and restricted cash—beginning of period | 216,925 | 139,273 | |
Cash, cash equivalents, and restricted cash—end of period | $ 175,368 | $ 261,246 | |
CROCS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
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 selling, general, and administrative expenses," "Non-GAAP selling, general and administrative expenses as a percent of revenues," "Non-GAAP income from operations", "Non-GAAP operating margin," "Non-GAAP income tax expense (benefit)," "Non-GAAP effective tax rate," "Non-GAAP net income," and "Non-GAAP basic and diluted net income per common share," which are non-GAAP financial measures. We also present future period guidance for "Non-GAAP adjusted operating margin" and "Non-GAAP effective tax rate." Non-GAAP results exclude the impact of items that management believes affect the comparability or underlying business trends in our condensed consolidated financial statements in the periods presented.
We also present certain information related to our current period results of operations through "constant currency," which is a non-GAAP financial measure and should be viewed as a supplement to our results of operations and presentation of reportable segments under GAAP. Constant currency represents current period results that have been retranslated using exchange rates used in the prior year comparative period to enhance the visibility of the underlying business trends excluding the impact of foreign currency exchange rate fluctuations.
Management uses non-GAAP results to assist in comparing business trends from period to period on a consistent basis in communications with the board of directors, stockholders, analysts, and investors concerning our financial performance. We believe that these non-GAAP measures are useful to investors and other users of our condensed consolidated financial statements as an additional tool for evaluating operating performance and trends. For the three and three months ended March 31, 2022, management believes it is helpful to evaluate our results excluding the impacts of various adjustments relating to special or non-recurring items. Investors should not consider these non-GAAP measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
CROCS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES (UNAUDITED) | |||
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 adjustment (2) | (27,927) | — | |
Inventory reserve in Russia (3) | (1,800) | — | |
Total adjustments | (30,918) | (985) | |
Non-GAAP cost of sales | $ 304,306 | $ 205,894 | |
GAAP gross profit | $ 324,924 | $ 253,219 | |
GAAP gross margin | 49.2% | 55.0% | |
Non-GAAP gross profit | $ 355,842 | $ 254,204 | |
Non-GAAP gross margin | 53.9% | 55.2% | |
(1) | Represents expenses, including expansion costs and duplicate rent costs, related to our distribution centers in Dayton, Ohio and Dordrecht, the Netherlands. |
(2) | Represents a write-up of HEYDUDE inventory costs to fair value upon the close of the acquisition on February 17, 2022. |
(3) | Represents an inventory reserve expense in our EMEALA segment associated with our pause of certain operations in Russia. |
Non-GAAP selling, general and administrative expenses and selling, general and administrative expenses as a percent of | |||
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 costs (1) | (20,601) | — | |
Bad debt impact in Russia (2) | (5,267) | — | |
Total adjustments | (25,868) | — | |
Non-GAAP selling, general and administrative expenses (3) | $ 180,379 | $ 128,533 | |
GAAP selling, general and administrative expenses as a percent of revenues | 31.2% | 27.9% | |
Non-GAAP selling, general and administrative expenses as a percent of revenues | 27.3% | 27.9% | |
(1) | Represents costs related to the Acquisition, including legal, professional, and transaction fees. |
(2) | Represents bad debt expense associated with the impact of the war between Russia and Ukraine on wholesale partners in Russia. |
(3) | Non-GAAP selling, general and administrative expenses are presented gross of tax. |
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-GAAP selling, general and administrative expenses adjustments (2) | 25,868 | — | |
Non-GAAP income from operations | $ 175,463 | $ 125,671 | |
GAAP operating margin | 18.0% | 27.1% | |
Non-GAAP operating margin | 26.6% | 27.3% | |
(1) | See 'Non-GAAP cost of sales, gross profit, and gross margin reconciliation' above for more details. |
(2) | See 'Non-GAAP selling, general and administrative expenses and selling, general and administrative expenses as a percent of revenues reconciliation' above for more details. |
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 (1) | $ 175,463 | $ 125,671 | |
GAAP non-operating income (expenses): | |||
Foreign currency gains (losses), net | 480 | (504) | |
Interest income | 102 | 27 | |
Interest expense | (19,252) | (1,632) | |
Other income (expense), net | (947) | 11 | |
Non-GAAP income before income taxes | $ 155,846 | $ 123,573 | |
GAAP income tax expense | $ 26,300 | $ 24,190 | |
Tax effect of non-GAAP operating adjustments | 7,622 | 249 | |
Impact of intra-entity IP transfers (2) | (3,107) | (352) | |
Non-GAAP income tax expense | $ 30,815 | $ 24,087 | |
GAAP effective income tax rate | 26.5% | 19.7% | |
Non-GAAP effective income tax rate | 19.8% | 19.5% | |
(1) | See 'Non-GAAP income from operations and operating margin reconciliation' above for more details. |
(2) | In the fourth quarter of 2020, and subsequently in the fourth quarter of 2021, we made changes to our international legal structure, including an intra-entity transfer of certain intellectual property rights, primarily to align with current and future international operations. The transfers resulted in a step-up in the tax basis of intellectual property rights and correlated increases in foreign deferred tax assets based on the fair value of the transferred intellectual property rights. This adjustment represents the current period impact of these transfers. |
Non-GAAP net income 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 administrative expenses adjustments (2) | 25,868 | — | |
Tax effect of non-GAAP adjustments | (4,515) | 103 | |
Non-GAAP net income | $ 125,031 | $ 99,486 | |
Denominator: | |||
GAAP weighted average common shares outstanding - basic | 59,823 | 65,458 | |
Plus: GAAP dilutive effect of stock options and unvested restricted stock units | 1,073 | 1,390 | |
GAAP weighted average common shares outstanding - diluted | 60,896 | 66,848 | |
GAAP net income per common share: | |||
Basic | $ 1.22 | $ 1.50 | |
Diluted | $ 1.19 | $ 1.47 | |
Non-GAAP net income per common share: | |||
Basic | $ 2.09 | $ 1.52 | |
Diluted | $ 2.05 | $ 1.49 | |
(1) | See 'Non-GAAP cost of sales, gross profit, and gross margin reconciliation' above for more information. |
(2) | See 'Non-GAAP selling, general and administrative expenses and selling, general and administrative expenses as a percent of revenues reconciliation' above for more information. |
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 margin | 26% |
Full Year 2022: | |
Approximately: | |
Non-GAAP operating margin reconciliation: | |
GAAP operating margin | 22% to 23% |
Non-GAAP adjustments, primarily associated with the HEYDUDE acquisition (1) | 4% |
Non-GAAP operating margin | 26% to 27% |
Non-GAAP effective tax rate reconciliation: | |
GAAP effective tax rate | 25% |
Non-GAAP adjustments associated with amortization of intellectual property (2) | (3)% |
Non-GAAP effective tax rate | 22% |
Non-GAAP diluted earnings per share reconciliation: | |
GAAP diluted earnings per share | $7.95 to $8.55 |
Non-GAAP adjustments, primarily associated with the HEYDUDE acquisition and amortization of | $2.10 |
Non-GAAP diluted earnings per share | $10.05 to $10.65 |
(1) | In the second quarter of 2022, we expect to incur $20 million in SG&A costs, primarily associated with the HEYDUDE acquisition, and an additional $45 million of non-cash costs in cost of sales, primarily related to the amortization of the write up of HEYDUDE inventory costs to fair market value at the close of the Acquisition. For the full year 2022, we expect to incur $60 million in SG&A costs, primarily associated with the HEYDUDE acquisition, and a total $75 million of non-cash costs in cost of sales, primarily related to the write up of HEYDUDE inventory costs to fair market value at the close of acquisition. |
(2) | In the fourth quarter of 2020, and subsequently in the fourth quarter of 2021, we made changes to our international legal structure, including an intra-entity transfer of certain intellectual property rights, primarily to align with current and future international operations. This adjustment represents the amortization of the deferred tax asset related to these intellectual property rights in this period and the tax impact of cost of sales and SG&A non-GAAP adjustments. |
CROCS, INC. AND SUBSIDIARIES REVENUES BY SEGMENT (UNAUDITED) | |||||||
Three Months Ended | % | Constant | |||||
Favorable | |||||||
2022 | 2021 | Q1 2022- | Q1 2022- | ||||
(in thousands) | |||||||
Crocs Brand: | |||||||
Wholesale | $ 344,258 | $ 290,039 | 18.7% | 22.9% | |||
Direct-to-consumer | 200,967 | 170,059 | 18.2% | 19.7% | |||
Total Crocs Brand | 545,225 | 460,098 | 18.5% | 21.7% | |||
HEYDUDE Brand: | |||||||
Wholesale | 86,919 | — | —% | —% | |||
Direct-to-consumer | 28,004 | — | —% | —% | |||
Total HEYDUDE Brand | 114,923 | — | —% | —% | |||
Total consolidated revenues | $ 660,148 | $ 460,098 | 43.5% | 46.7% | |||
Total wholesale | $ 431,177 | $ 290,039 | 48.7% | 52.9% | |||
Total direct-to-consumer | 228,971 | 170,059 | 34.6% | 36.1% | |||
Total consolidated revenues | $ 660,148 | $ 460,098 | 43.5% | 46.7% | |||
(1) | Reflects year over year change as if the current period results were in constant currency, which is a non-GAAP financial measure. See 'Reconciliation of GAAP Measures to Non-GAAP Measures' above for more information. |
CROCS, INC. AND SUBSIDIARIES RETAIL STORE COUNTS (UNAUDITED) | |||||||
The tables below illustrate the overall change in the number of our Crocs Brand company-operated retail locations by | |||||||
December 31, | Opened | Closed | March 31, | ||||
Company-operated retail locations: | |||||||
North America | 173 | 2 | — | 175 | |||
Asia Pacific | 153 | 1 | 1 | 153 | |||
EMEALA | 47 | 1 | 4 | 44 | |||
Total | 373 | 4 | 5 | 372 | |||
CROCS, INC. AND SUBSIDIARIES DIGITAL SALES PERCENTAGE AND DIRECT-TO-CONSUMER COMPARABLE SALES (UNAUDITED) | |||
Digital sales, which includes sales through our company-owned websites, third party marketplaces, and e-tailers, as a percent of | |||
Three Months Ended March 31, | |||
2022 | 2021 | ||
Digital sales as a percent of total revenues: | |||
Crocs Brand | 32.8% | 32.3% | |
HEYDUDE Brand (1) | 25.9% | —% | |
Total (2) | 31.6% | 32.3% | |
(1) | We acquired HEYDUDE on February 17, 2022. Therefore, the amounts shown above represent results during the period following the closing of the acquisition through March 31, 2021 and there are no comparative amounts for the three months ended March 31, 2021. |
(2) | For the three months ended March 31, 2021, the digital sales as a percent of total revenues represents the Crocs Brand. |
Direct-to-consumer ("DTC") comparable sales for the Crocs Brand are as follows: | |||
Constant Currency (1) | |||
Three Months Ended March 31, | |||
2022 | 2021 | ||
Direct-to-consumer comparable sales: (2) | |||
Crocs Brand | 16.6% | 71.1% | |
(1) | Reflects period over period change on a constant currency basis, which is a non-GAAP financial measure. See "Use of Non-GAAP Financial Measures" for more information. |
(2) | Comparable store status, as included in the DTC comparable sales figures above, is determined on a monthly basis. Comparable store sales include the revenues of stores that have been in operation for more than twelve months. Stores in which selling square footage has changed more than 15% as a result of a remodel, expansion, or reduction are excluded until the thirteenth month in which they have comparable prior year sales. Temporarily closed stores are excluded from the comparable store sales calculation during the month of closure and in the same month in the following year. Location closures in excess of three months are excluded until the thirteenth month post re-opening. E-commerce comparable revenues are based on same site sales period over period. |
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SOURCE Crocs, Inc.
