Crocs, Inc. first quarter revenues were 939 million dollars, an increase of 6.2 percent or 6.9 percent on a constant currency basis with direct-to-consumer (DTC) revenue growth of 11.8 percent or 12.3 percent on a constant currency basis and wholesale revenue increase of 3.2 percent or 4.1 percent on a constant currency basis.
The company also announced the appointment of Susan Healy as executive vice president and chief financial officer, effective June 3. Healy will join the executive leadership team and report directly to Andrew Rees, the company’s chief executive officer.
“We delivered an exceptional first quarter, led by mid-teens growth of our Crocs brand, driven by robust consumer demand both in North America and in international markets,” said Andrew Rees.
Review of Crocs results across brand portfolio
Gross margin for the quarter rose to 55.6 percent, while adjusted gross margin improved 180 basis points to 56 percent. Diluted earnings per share of 2.50 dollars increased 4.6 percent and adjusted diluted earnings per share of 3.02 dollars increased 15.7 percent.
Crocs brand revenues increased 14.6 percent to 744 million dollars or 15.6 percent on a constant currency basis. DTC revenues increased 18.3 percent to 282 million dollars or 19 percent on a constant currency basis, while wholesale revenues increased 12.5 percent to 462 million dollars or 13.8 percent on a constant currency basis.
Brand’s North America revenues increased 9 percent to 383 million dollars or 9 percent on a constant currency basis and international revenues increased 21.3 percent to 361 million dollars or 23.6 percent on a constant currency basis.
The company reported a revenue decrease of 17.2 percent to 195 million dollars at Heydude brand. DTC revenues decreased 11 percent to 60 million dollars and wholesale revenues decreased 19.7 percent to 135 million dollars.
Crocs appoints Susan Healy as new CFO
Healy, 58, the company said, succeeds Anne Mehlman, who was recently appointed president of the Crocs brand.
Commenting on the new CFO appointment, Rees said: “Susan is a seasoned financial professional and a Wall Street veteran, with financial leadership and operational experience across several industries. She will be a great addition to our enterprise leadership team and I look forward to working with her.”
Healy, the company said, will have responsibility over financial planning and analysis, accounting, investor relations, tax, internal audit, and corporate development.
She joins Crocs, Inc. from IAA, Inc., a global marketplace for automotive buyers and sellers, where she served as chief financial officer and led the company through its 7 billion dollars merger with Ritchie Bros. Auctioneers Incorporated.
“Crocs, Inc. is an admirable company, with its two iconic brands generating exceptional free-cash-flow and industry-leading margins. I look forward to the opportunity to drive continued, profitable growth for the company and deliver top-tier total shareholder returns,” said Healy.
Prior to 2021, Healy served as senior vice president of finance for Ulta Beauty. Earlier in her career, she held various senior financial leadership roles in addition to a 12-year tenure at Goldman Sachs.
Crocs forecasts subdued growth at Heydude
With respect to the second quarter of 2024, the company expects revenues to be up 1 percent to 3 percent at currency rates with Crocs brand growth of 7 percent to 9 percent and Heydude brand decline of 19 percent to 17 percent compared to second quarter 2023.
Adjusted operating margin is expected to reach approximately 26.5 percent and adjusted diluted earnings per share in the range of 3.40 dollars to 3.55 dollars.
For the full year, revenue growth is expected to range between 3 percent to 5 percent. Revenues for the Crocs brand are forecasted to grow approximately 7 percent to 9 percent and revenues for the Heydude brand to contract between 10 percent to 8 percent.
Adjusted operating margin is expected to be approximately 25 percent and adjusted diluted earnings per share of 12.25 dollars to 12.73 dollars.
“As we continue to prioritise brand health in the North American market for Heydude and considering what we are seeing quarter-to-date, we are reducing our revenue expectations for the brand for the balance of the year,” added Rees.