CROCS INC 2024 Q3
Earnings Overview & AI Insights

Earnings Performance

Andrew Rees, chief executive officer; and Susan Healy, chief financial officer. Rees: "We reported third-quarter results that exceeded our guidance in terms of sales and profitability on an enterprise-wide basis" Rees will discuss the company's third quarter results and give an overview of HEYDUDE's strategic priorities. All three of our product pillars, clogs, sandals, and personalization, grew during the third-quarter. Footwear News named our Classic Clog, one of the greatest shoes of all time. The Echo franchise, which has developed a new product line, continues to bring in new male explorer consumers. The 7th annual Crocs Day was October 23rd, our very own fan-inspired holiday within the month of Crocs October 23th. The release of Pet Crocs, available alongside matching classic line clogs, was a huge success. The North American market performed well with revenue growth of 2%. HeYDUDE's third-quarter results came in slightly below guidance, with revenues declining 17%. The company's China business grew 20% in the third quarter, on top of more than90% growth last year. The Chinese consumer is being far more conservative in their purchase behavior.quarter, we sharpened strategy to focus on three strategic imperatives: driving used female female female youth culture, creating a HEYDUDE brand community, building the core of Wally and Wendy and adding more, then stabilize and accelerate North.America. During the quarter, we launched TikTok Shop and we have an excellent response. The Crocs brand grew 8% in the third quarter to $858 million, growing 8% to prior year. North American retail sales grew 2% versus the prior year to $491 million. International sales grew 17% to $367 million, led by DTC growth of 18% and wholesale growth of 15%. Global sales of Crocs shoes increased 11% versus last year to 32.1 million pairs of shoes sold. HEYDUDE revenues were $204 million, down 17% from last year. Wholesale revenues were down 23% and DTCrevenues were down 9%. HeydUDE brand adjusted gross margin was 47.9% or 510-basis points higher than prior year. Both Crocs and HEYDUDE brands achieved inventory turns above our goal of four times on an annualized basis. We ended the quarter at the lower end of our long-term net leverage target of 1 to 1.5 times. We expect consolidated revenues to be in the range of flat to up slightly at currency rates. We expect the Crocs Brand Brand to grow approximately 2%, like double-digit international growth. We are lowering our annual capital expenditures from $100 million to $110 million. In 2025, we're planning to continue to invest behind talent, marketing, digital, and retail in order to create sustainable long-term growth, which will put incremental pressure on our EBIT margin rate versus 2024. At this time, we'll open the call for questions and answers.