Crocs (CROX) 15 Feb 242023 Q4 Earnings call transcript

Good morning, and welcome to the Crocs Fourth Quarter 2023 Earnings Conference Call.

[Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Erinn Murphy, Senior Vice President of Investor Relations and Corporate Strategy. Please go ahead.

Good morning, and thank you for joining us to discuss Cross Inc. year full and quarter results. fourth are With and current Chief Officer; Rees, Mehlman, me Chief Executive Officer. and today Anne President Vice Executive Brand Andrew President, Financial Incoming

your we to limit per caller. the prepared you X will their we ask remarks, call Following for questions, which to open

materially. Form SEC for statements Before I harbor securities and reports is accordingly, refer subject our other our to the and safe would to as which but involve unknown remind of statements the results, federal cause that some include, non-GAAP and XX-K filed uncertainties or we certain our information with is are on known provided information we may limited factors, outlook. uncertainties financial objectives, and metrics annual measures. These report refer regarding and and Please forward-looking of not begin, financial provisions laws. the to strategies, non-GAAP the These to other our including on on performance expectations risks like these to, you risks this are differ more call actual or to adjusted intentions, achievements and statements that plans,

to contained A growth At this this to GAAP reconciliation basis in Rees, stated. otherwise cited I'll Inc.'s currency issued Andrew unless will their Crocs Officer. of on we time, the the be morning. counterparts these release rates is press Chief revenue over call amounts earlier All Executive a turn constant

we're XXXX a morning, year the us XXXX strength. record today. Errin, off for and joining from good and enterprise, was Thank Thank everyone. of for you you, position Crocs a starting

better-than-expected sustainable ended strong, market focused the are teams and to delivering drive growth. We gains quarter. on profitable year Our share fourth continuing

gross at revenues versus increasing by start growth Heydude to XX% last year-on-year by enterprise revenues Total were revenues surpassed billion million $X guidance. grew once margins in delivered year Let mark, approximately per to level. XX% margins over last our adjusted industry-leading from We $X margins and $XXX XXXX. the versus XX% our We brand few expanded XX%, XX% $XX.XX. operating billion, full our direct-to-consumer by grew driven the $XXX Crocs million earnings again sharing almost highlights diluted exceeding adjusted delivered share of and the year me a year. of almost operating income. with

$XXX Our strong debt and repay cash repurchase resumed to during generation our we million flow the year. us allowed program share of

that top companies. Crocs spot Finally, the Inc. XXXX fastest-growing Fortune's we're on XXX see pleased to #XX achieved

speak business have search active our to Many the and our through Before to transitions. pleased footwear our I the provide named mindset. I'm to brings with to a strategic her lens consumer-focused in and the XX-year of I career now executive President, CFO, President. will be to decade recently is promote strategic leadership. of for opportunity Ann she will acumen, tremendous her impact in succession strong closely successor XXXX. Michelle CFO is an adviser a a Crocs Melman, and with want Poole, last confidence announced Crocs already work knowledge transitioned the to you company. brand updates our replacement the of I industry, Brand in deep until had Crocs to them commercial through Anne from the by Brand, commercial remain underway. global current and early had a remain Crocs. special May keeping following Michelle distinguished early retired In planning, role a on which will

key performance against our pillars, brand. strategic cross starting to with our the on Moving

accomplishments a and this of We first our few product innovation, continue our brand invest digitally to socially in our year. Crocs playbook led naming through marketing

ended going brand that the ranged the year Misco Aespa, spin McQueen. out and best. we [ the including high XX ] awarded stop to boot a in clog We Crocs friend Crocs that Bambi [ at a by our wins Yellow Croctober successful publication Year Lightning leading Our boot, the the inspired partnership. Polex by were culture our from the Complex, cannot in News XXXX. Clog mainstream set moments, carve hours. unveiling most Meda K-pop We ] viral sold for marketing Salehi StompLineClug, creating perfect collection fueled Times yet Crocs celebrated of to Footwear featured our

Innovation ongoing product. diversification and focus. to important on of remain areas Moving

double collaborations grew consumer sandals our engines clogs, creating personalization, growth franchises and core in and While our all product moments through we've and X XXXX. had fundamental pillars: are -- great digits our success partnerships of

well by last style, versus the segments makes Crocs our product surpassed now $XXX up in supported and XX%, fueled share million XX% adventure. franchises, clog grew sales solid as both by growth XX% growing innovation. we mark, saddle Street Channel every mix. day, as Crocs Sports new and our gained core market X prioritized Classic across We height year of that our and

on sandals category diversification only shop our customer overall a to value consumers were mix, consumers sandals milestone, and XXXX, the revenue brings silhouettes. channels e-com that more frequently, carried to the multiple new Beyond order These not own brand. In purchase product our but to purchase higher mix. average the

other our Our sandal more consumers skew female buyers. versus

X% billion, our approximately business $X.XX XX% of Our Jibbitz grew total mix. making to up over

through penetration, further a grow opportunity to as XXXX, penetration mega speed consumer execution, wholesale increased personalization view and market. to notably to and in deeper see continue improved We Jibbitz trend international

multiproduct sneakers customer including ] capabilities franchise have built [ The in products sandals, a clogs, franchises our to We're explorer name of which several groups now Each across and diversified male Crush is breadth [ franchise, consumer. largely and and a to boots elevating occasions. Echo, these platforms, management Brooklyn few. bringing has of a sustainable unique ECO ] the developed and catered wearing

our get this shopped XXXX. line see full to sold able across consumers than our franchise colorways these fourth In and and to market expanding in areas of agile, own XX% XX% to capitalize emerging more Echo XXXX. on in quarter, and further with on e-comm we attributes portfolio, in faster we're in these becoming opportunities slippers We're fact, In product We're consumers. the our capabilities out and X we're channel XXXX franchise weeks, cycle. who assortment. new new as our into faster we to such other our X.X our This product the of speed-to-market normal to Getaway test including building tested

As we broad-based brand by for distribution, pleased cross the the think of about I'm growth the year.

X% international grew XX%. America North and XXXX, For grew

quarter In the Globally, digits. each U.K. represented and double-digit Australia consecutive of outside grew growth digits Korea double triple America. of our China and fact, South on fourth strong North quarter XXth grew

X% untapped potential we underscoring it the a the represents have of revenues, still reported in we While record in revenue China, only region.

Clogs I to had continue Three of the the alongside parts as other We Don hashtags to our embracing excitement tag taking base for opportunity evidenced trajectory consumer hold Tier team. plan across the known X our is see personalization Asia We engagement organic in than XX Asian [ world. of ] is grow or The our visit evident region. countries rate several ago, that as Man a the million Doman brand. in on have now the highlighting leadership weeks followers. and red, brand's higher our the It China broader at by consumer is

any the gives international in market that our region share agenda Korea, the market of confidence at highest discrete me is market our carries growth most South broadly Another in anecdote established strategies opportunity our representations This of globally. market the It of markets. potential sandals and is best one clogs, of the other our core position strong international personalization. highlights across upside across

deliver expect entered momentum. and a to has more height we product perspective, From brand at Crocs street scale. for him personalization with XXXX for her, The drive

gain to perspective, XX% to XXXX. we achieved scale bio-based that a bio-based continue driven A and sandal a material on relaunched to Classic to newness reach by as our franchise. sandals our milestone our sales, pleased of Sandal across announce sustainability expect We journey Getaway our percentage introduced the incredibly X.X From we Crocs recently lite by I'm goal significant Crocs light portfolio. XXXX XX% to as

recycling saw to now October, also to late results and in initiative all this in stores. pilot launched that We we shoe program we promising plan expand our

and these our initiatives many comfort report. other We in more will midyear share on

to almost Heydude lightweight, I'm very easy benefits had brand the and million of comfortable, remain in learnings, share This enough and Heydude. in its operating of $XXX income the $XXX on Turning confident top with of that revenue value but million We consumers. from generated XXXX. over year mind

reaching our improved brand in are second It still year-over-year, is awareness low love brand by XX% but significantly our the affinity standard, While half. global brand high. and any

of expect gross position. small move second sell-through full sell-in and We're talked we XXXX a returning decisions our price strategic nonstrategic as pivots channel, around wholesale as the third quarter and healthy in our with sell-through efforts pleased made within curtail normalize impact accounts our which a number channel the of and in September, and evidenced sell-in focus margins impacted throughout improving improved and digital. we initial As about in market full inventories our to to we by half the prioritize of and call,

quarter on consumers. in basis brand with retail underscoring the share service. our Heydude accounts, to underlying In XXX our fashion of the confidence brand's points we casual market tracking strategic In [ versus XXXX the key U.S. Secarna's and market share full year in a fourth basis, gained gained according demand among the category XXXX, ] approximately

know programming, saw quarter. of quarter, first leveraging with the consumer we and -- [indiscernible] the due some -- evidence during big this a our gifts, we perfect brand moments Hay give that of XX% the buyers dues of face had the During holiday as insights our Heydude happy as fourth

perspective, consumer QX, the launch Wally deepen program popular icons, From partnerships. Later Walmer. consumer during Wendy to we'll our forward, Stokes create more Chase we were plan during and collaborated to ] recently Looking and in top show collaborations our engagement. moments active Madness out-of-bank be the collegiate with scaling the sellers. from the to March fourth a our [ Netflix schools product expanding through We to quarter,

a its selling boot Bradley overall sell-through and with our attractive industry season. responded boot consumers sales X top overall to as despite exceptional point, compelling out weight price styling life rounded soft Our

our with Christmas Ugly sweater seasonal styles Once standouts. again,

on remain and by Wally move in lion's and the we expect share franchises continuing we're heights. As and the offerings, invest Wendy into newness to graphic driven and of XXXX, focused to our core color,

we see allocate more implementing including on strategy as retail in early our of Sirocco, segmentation approach perspective, year. in Heydude our to account our the will boot the inventory retail and by We focused throughout the brand, successful we evidence and expect Croc's a how the capitalize From successful taking build a of for franchises, to distribution we're and We're the playbook. channel account fall. days move outlet and leveraging Carina fashion sneaker offering on

throughout spread opened part. outlet the up with to in On pleased X been the outlet have the stores thus and second year. open locations results half plan Heydude XXXX we side, in the We XX

X/X brand context, roughly the and For highly business profitable. is Crocs for North retail is American of our

wholesale. Turning to

While we expect our spring the call, throughout order books as sell-in are we year. as sell-through discussed on normalize down and we year, move last half to the of back November versus our

markets we in the several in As as well groundwork international, X next playbook. it to expand test X relates Brown distributor markets, years. the will success a remain to mode its in of to new lay Crocs Europe as in This the the markets few in direct leveraging international

We're year from strength. a position into coming the of

now and our industry-leading question generation. in share forward While our year top-tier and backdrop confident outsized another our gains, to consumer will in purpose and flow looking global there profitability our cash detail. marks macro people more Anne brands, and health, financial the around results are the of I'm review broader are

of and I'm metrics. last year growing across We generated led pleased exceeded very revenues guidance points by margin Crocs our delivered operating you, of We the guidance results, $X.XX adjusted end consolidated by our $XXX with XXX gross adjusted X.X% Thank which $X.XX, adjusted fourth top-tier good up of million quarter our per to of profitability share earnings over $X.XX. to basis of everyone. XX.X%, all the morning, Andrew, brand. high ahead margin XX.X% in

of capital profitability strong enabled million to fourth and working us debt repay the quarter. $XXX net in focus Our on

cost average repurchased also stock fourth an of the in share. We $XX.XX quarter per of million $XX at

earlier discussed a in conference, our to change segment made January As that the we now be XX-K. reporting in our will at reflected ICR

brand. Heydude against Our segments and continue dynamics. country the plan our strategic sharing reportable progress the channel will pillars, and to callouts key operating now be brand Crocs our growth We

or decrease million mix, shoes, distributor. a impact up and X% million the $XXX of brand last X% product Crocs the to DTC quarter. of and of and growing year, channel X%. higher brand strong up both to termination to XX% by Turning to discounting. QX were pricing international ASPs excluding relative lower the prior year our by of XX% were XX% in sold The driven Revenues growth pairs fourth of $XX.XX XX growth wholesale African led Brand of the

and the the of XX%. For growth year, up versus million units, sold year X.X% XXX ASP last brand

by [ change, by up full DTC wholesale growth partially Now million offset In let's quarter, quarter against revenues offset quarter revenues distribution was our brick-and-mortar review The XX% XXXX. were DTC, XX% model in which channel. double-digit the wholesale. revenues X% from the from X% Crocs with North international up country as growth brand ] reflect strong America highlights of the of by retail Crocs in a driven quarter and in in by brand impact of grew by XXXX decline was fourth in the partially led decline X% a $XXX wholesale. our

quarter. X the Japan, of In our Europe. China, fourth and fact, all U.S. India, Western the markets grew Korea, in South X Tier

our year, macro year, France, $XXX tough Australia for China. was triple As saw revenue noted, ending at we flattish the X Andrew the ended China despite the Europe, a Western of in Germany record the strong million. digits year In countries year U.K. while and double-digit and growth a backdrop. grew

million Heydude. ahead but from year, down to last were our of Revenues Turning guidance. $XXX XX%

matching was pulled at last our price e-commerce shoes, were During we Heydude pipeline added decisive roughly to lapped to $XX.XX. up year as XX% XX% flat price average last we pairs Relative and the online. during we fill on sold brand channel ASPs as of QX, selling to X.X QX, million took decrease inventories. a of as reduce back from QX actions year

cleanup We goods continue position expect better to and to half a substantially the first make against be XXXX. of great progress in exiting

adjusted tailwind we for we better rightsized X% for channel than of XXX The better points our This reduced driven in Wholesale prior basis challenging XX.X%, attributable expected. by of XX.X% margin. approximately margin basis Crocs freight was lap environment. basis faced customer gross pricing increase was quarter brands. excess increases points. revenues as margin sales gross were margin down from rates and pipeline Heydude in gross accounts fourth than XX% adjusted promotions and of brands is or and QX product XXXX pricing adjusted XXX partially a from as basis The quarter for wholesale negative fill, offset and mix, adjusted the for to was XXX and a margin points higher costs costs. the DTC basis as nonstrategic international XXX freight came points by QX year. favorable wholesale impact last XXXX tailwind, was was key Consolidated in brand year decrease gross forfeited more last distribution points The margin XXX by and mix. up from partially storage XX.X% was offset year. both currency contracted

compared to at Our XX.X% basis QX points XXX SG&A deleveraged adjusted prior of revenues by year.

SG&A and talent the increase infrastructure quarter rate investment, year XX.X%. in fourth and in operating adjusted Hong XX% and these is related XXXX, intellectual property. margin future share attributable XXX closing marketing the full Taking period of market XXX For support Kong to the Heydude durable the gains. to of significant benefit compared for full year primarily declined tax basis last together, onetime SG&A million, adjusted for related to continued In drivers $XXX our points points to adjusted to our GAAP a deleveraged QX, growth to of transfer XX.X% the activity The basis approximately company our year. the recorded and same quarter

$X.XX rate per tax earnings our to decreased reflecting quarter share Fourth XX.X%. of when adjusted diluted X.X% non-GAAP

earnings clean channel. on our inventory sheet the balance ended We in increased For the per to and share with XX% the year, our year $XX.XX. diluted adjusted full

to capacity ended XX% was versus million XXXX of $X.X The have our total down roughly last was borrowing QX. capital, year $XXX cash revolver. Our December generation year. diligent flat inventory working strong on Through cash of reduced and XX% X.Xx. we repaid $X.X down billion repurchase have million, million we and of to activity to $XXX X% our inventory XXXX, acquiring Crocs February our flow million, We million time a balance strong in and inventory $XXX from approximately brand debt XXXX. decline balance on management XX, of QX leverage Heydude cash net XXXX, equivalents Heydude this liquidity to and X% $XXX position down a and net the and of of year against XXXX. Since last last second billion with in share from resumed in and borrowings comprised $XXX was half

$XXX an full year at On average stock repurchased share. million $XXX of price basis, of per a we

best basis Our a to down X.XX%, achieved strong ] enable to or change XXXX. XX continue and ] buy to and generation from date. our in our Loan [ plus we and reduction In plus rate and covenants SOFR Term in February, point position successfully borrowing B in to us with X% cash flow debt stock will maturity leverage refinanced liquidity pay [ no SOFR back

I the XXXX. current then outlook to full future, for share to and turning QX Now our year would like

QX, X% expect with X.X% year-end revenues brand to X%. rates, we between at be the currency up consolidated For down X.X% to Crocs growing to

to down and year as order spring pipeline given from revenue our We to lap fell aforementioned expect XX% trends. book last we XX% Heydude be

XX% $X.XX. expect We and $X.XX adjusted margin approximately of operating adjusted per diluted share to be earnings to

rates. year X% revenue full currency assuming we growth, XXXX, of to the our are X% reiterating outlook For year-end

X% expect with brand growth led Crocs X% to revenues, by For international. to we grow

flat to slightly revenues, up. brand we Heydude For continue growth expect to to be

we throughout sales expect to year. the In improve shaping, of trends terms Heydude

margin gross level. XXXX enterprise at expect improvement over We the

the DC Heydude ERP newly our to expect of gross realize margin our planned implementation. benefit Las as and Crocs Vegas and We brand up margins to for start the opened expect we stable year gross be

brand in and SG&A these into accretive operating XX%. approximately for margins reinvest to dollars investments strategic consolidated expect We year adjusted the resulting of

our structure taxes Following which rate, and GAAP approximate full paid cash changes our for to non-GAAP tax XXXX, tax we expect of tax approximately XX.X%. XX% rate year underlying be

We $XX.XX recent incorporates our to assume future does not any share Loan in repurchases. potential to impact tax from but earnings refinancing, anticipate range approximately diluted be per in $XX.XX share This XXXX. non-GAAP Term changes B

brands, $XX logistics incur the related and distribution we to charges, primarily Heydude. onetime $XXX to expect expect and million both $XXX first I'll growth in to also for support approximately to final We this quarter the of completion our for of To cash for the projects to in invest in best-in-class Andrew generation. back his At time, flow turn to XXXX expect expenditures continue million capital thoughts. call million over

Thank record-breaking year in you, Inc. Anne. Crocs, had XXXX. a

the up As on we durable in the for returns. shareholder ourselves share are and time, business delivering move top-tier while market to proactively total XXXX, to into for decision making gains questions. invest set the incrementally we'll At offense we our call open this continued

session. question-and-answer Wedbush the begin of [Operator now Instructions] will first Securities. Our come will We from Nikic Tom question

the to yourself than you in front, I And over that obviously, feedback into reacceleration Heydude expect year. and the the I pretty gotten last drive of I expecting. you're confidence lately it I performance wanted the guess, wholesale year about seems of a remainder that wholesale we -- guess expected choppier reacceleration better on that's kind kind reacceleration digging gotten partners Heydude I that some you're brand. had big stem year amount of or like from pretty gave of just the comfortable Heyduede of kind Heydude. ask think, of the one from to help I wholesale of hole like should year, brand guess, for And significant more much but was the the in need from in the know QX reasons you partners? course the order seen you've of you a why books like

Yes. Thanks, Tom. Yes.

out the start with of hit will then sort how Anne I play year think it the of I'll Heydued. we can for few at the end points pick this, think around up a

to us the talk And going the way takeaway thought you of can -- And think the on or been from kind right? we're brand you've year. thing QX got from pivoted I sell I sell-in has to to do that out separate the how back, that we is Heydude So heard perspective. we So about as yes, because wholesale consumer experience, got during call, strategic would of brand right? of how a us you for see that to kind if first didn't you what is and some actions. our sell-out, it the our we out sell-in our step from But choppy pivot the see you've play absolutely partners all full

believe, can highly sellout underlying top-performing their I ranks market brand So the few gained the things fashion for XXX strong, during it right? brand substantial category, share, about partners, brand are SCANA a is our It wholesale brand Heydude many Hydro see very on share think very, basis actually been casual has market The we that the points. stack. in for based clear. of and in XXXX we The data a

larger market that's also we our one was takeaway. it then the And of terms business. underlying in consumer of that DTC share gains, can So see and

us we've some dynamics drive pricing margins. higher our also and give but DTC Now business, causing in to which some changed up revenue is strategies to

read to gaining selling we are through consumers see what essence, consumer So more is kind and more that in the of market we we share. to pairs

the that's kind important so of read. And

that put we in acknowledged half of of part early the too we 'XX, the pairs many Now back 'XX, market. into

sold more we done. than So in should have we

process much account many up cleaning I accounts of against inventory had the through competing too gone kind have of other. also think because We base too we each our with

and frankly, our on we've talk the them, are got that would those number they public, as strategic a heard clarity real on So really you've are from those I I partners who strategic we of say, are. to brand. partners, And think bullish

consumer we of kind what that's see a lens. from So

stores very opened And stores year. those year, is this business the right? I'd of of think go pleased up is you to profit you end piece the with around the benchmark in last with we kind outlet Anne, for drives and more future trajectory stores over say and those X business performance for it outlet second the the America total year. I continue as will business that open We're in that that you that about we I your before of substantial, So back it retail to we'll those the from X/X business, Crocs gave is and of through the the get to sort business. cumulative build North head of and is get revenues the the hand

it's Heydude So very substantial, too. and we think for that exists

give on Yes. just shape And Tom, bit little to you the detail. a little in a context more

in our So guidance year Heydude. flat slightly to embedded of full up for

dynamic we a in beyond. really what start similar channel us and would to start are QX and improves wholesale saw down the benefit in it QX, quarter In our then do year as impact we just of although at we to We we for expect see is guidance. assuming that look we throughout assume contribution in the QX right the every retail now trajectory. to

market perspective, a on be I that's sure So revenue our would 'XX right in about letting be what we from market the is sell-out that say it is, incorporated the will making and have inventory really wholesale pull really focusing into a mentioned, and and wholesale guidance. Andrew as

and had that? all prepared during if terms on in remarks, if where Heydude.Just but you I -- quick at A this it, the gray we where market are follow-up of mentioned cleaning up missed the sorry

Yes.

sort making through certainly yet. 'XX. 'XX market done will progress. think great earlier We in substantial progress. to of half see not We're We from the in we're that, take of gray first think I solid the but complete dips it

The comes next from question of Jonathan Komp Baird.

Any you Crocs I the America. XXXX thoughts share current Could on for ask penetration of view that mentioned on and trajectory increases to in the year. Jibbitz with the you your health here maybe business? want I know the include about your North just thoughts in there?

And separate question, one then Anne. for more just

see can the guidance there, to the that? want any case the It give looks that's I As about SG&A more detail you what's we deleverage if and significant pretty just driving think the Crocs year. for on like implying color give further you're margin if brand. for

Yes, John.

So is I our brand very a it Obviously, scale the America. Crocs in North well to business. business, continues it's be think and positioned largest

have perspective happy digital penetrated do We retail from indications Crocs substantial share performance We of are continued partners. a see perspective. our I -- positive, from would But from we say, wholesale market with very 'XX. from in of we and the brand -- market perspective, a see we're support in were a the well the very wholesale

a have to innovation market. we'll We of pipeline that strong product bring

We have the a strong that year. bring collaborations during we'll pipeline to market of products, licensed

fact, In products. mostly was new yesterday afternoon reviewing spent I

about excited super that. So

positioned. think the I So well brand is

-- I rightly we We we think have for opportunity personalization incremental incredibly it also being consumer does with Jibbitz. positive. you and if call out, do the penetration think see dynamic

look, it a product 'XX, see grew in wholesale saw out. where, you wholesale As and is be we rolling testing creative growth think we opportunities in more and in we'll but market, solutions difficult the we the and above it overall market that sell to some of the the business display gain penetration have --

Jibbitz would more much in social We to, I respond also are quickly. can kind trends that bringing the dramatically time we say, of lines so

we're personalization consumer using create ongoing excited to about engagement. super So

on North QX. as a constant XXXX Yes. reminder, And and a just that grew X% America currency basis in in X.X%

So good pretty out results of America North scale business. the Crocs

an we SG&A of And in we both talked to I We year. margin that important. for really are some improvements it's perspective, our think brands. goes this about from invest going SG&A as think

half we're still the half growth larger versus that you expect dollar some XXXX. both second we because to anniversarying the on SG&A in investments higher Just context, we do give brands first made in

QX up QX. So and SG&A mid-XX% both is growth in

drive on with mind. on a And focused brands to and of on to to we're guide we are in not our specifically technology our to pieces [ that's biggest the And something then on really which the keep really both from then Heydude, why related across the on store the growth going investments, expect side. this year. So marketing some in both it's investment. making Crocs, markets, associated outlet I international brand that brands. some ] the And -- just investments Talent we're perspective board both that is

Patel question Next Raymond from James. Rick of comes

Congrats role best new to Anne the new chapter. on to the on Michelle and all your

to Just about long-term for the potential question a growth. ask wanted

So revenues X% about total XXXX. of to should by with being the X% $X guided potential think up how revenue here, to we billion hit --

could color add some the hoping building Just on there. blocks you

you're crops I Thanks, the to guided And for Rick. we years ago? referring billion assume some $X that

Correct.

Yes.

Okay.

be think So fact the we we -- so ago, that that years thought the -- we point, set at yes, guided, we number could I happen a think a could that of And Crocs XXXX. because by I brand. $X thought out billion

I pillars. we believe is cross be and firmly drive Crocs And are and that against is kind the billion. which solid we of we're Asia, personalization, those progress where is all and sandals business, at can of pillars really brand easily clogs, to the digital, that we growth, a scale the absolutely look we think still using see today $X

I In would progress of last say more several progress. against over pillars. We've those fact, than the years incredible solid seen sort

that because currency us cost of. a $XXX since have around that global of to in had We you're pull line. things million out chain. we guidance all the top And frankly, provided I of as changed aware well issues few think about well Russia quite supply back

little in it's for projecting probably profitable in mark. think, that way. We incredible really returns it's value in are margins still focused don't we're us incremental future. it XX% the above grow that first I achieve shareholder the not XXXX. $X and will longer. sustainable or a margins, our but capabilities single year, to a be And to We dollars driving the allow invest company shareholders. I and continued still drives we're every bit XX%. the take think operating -- year deviate terms mid-XXs, think the But for So prudent the to think creation in time by be deviating operating of the will the to create and so But from the very realistic time from this and I on to think growth to from billion

term. with So on the a perspective in long you

of Abe comes Zogenix Piper question next The Sandler. from

X% X% assume gives there are crop color guided brand, is Crocs getting number? are in to confidence to that to What give versus year. And far? on X% can there -- Just X% any improvement being the that quarter-to-date of there trends? the continuation you just on for And any the that Is the you're you for in seeing X% the quarter. contemplated so trends X% you does that that to seeing to

Yes.

important. obviously, -- -- year trends don't of got specifics. us last some a give a it's color. more quarter think say a of from continuation can would and we of the We in we the see of important. brand some color give drivers super a lot bit of basically. see a about But big I so I been propelled from brand, product perspective, the really think know, visibility cloud you you international growth And have has if the We as that have and Asia to growth and been in Jibbitz we growth bookings.

for brand. we the confident around see real solid see sell-out feel So bookings. wholesale we we our And

mostly. continuation I'd say it's So

pretty don't quarter, we but of is very is us January, our just piece think for it January And as really a you small immaterial quarter our comment overall in a when business. on about Yes. trends

way Got a it. looked follow-up, just segment? more changed one any is of That's there you've under what have segments, question. reporting helpful. the would us kind tell XQ of like the reporting Since you And can housekeeping old

Yes.

our change reporting did we as segments. So

Heydude new think as Crocs segments reflects and are brand our look reporting we brand So should we at the how that business.

up up Asia grew year, and Emilia all led from versus double across America Emelia. for grew North the was regions XX%. prior dollars profit X% in -- operating digits by strongest growth XX% increased year, came reported, which was QX. XX%, as and the International Pac, So and Asia And

time gives be we'll last have So segments the give some our will as a full now that but picture. changed, information you the this -- year

The comes Jim of next question Stifel. from Duffy

Hope you questions. Two doing well. guys are

likewise, you in international can markets, you which excited the the list? about the that for for international And be Certainly, there on you're landscape others do would market, challenging? expect First, outlook 'XX? are more is specifically, to highlight? you speak markets to that China Are

Yes. Jim. Absolutely,

essentially with that, so highlights. dramatically started China well. top Xx the is they've China that. China, to list, We've business line growth, sort revenues, investment off in China start on multiyear just Greater the if line a pay from think higher let of it bottom sort pointed in triple-digit is right? during you perspective. than than thrilled effort our top and that perspective and of I getting rightly sort of benchmark really with kind focus as X improved XXXX we're of to other at Obviously, But overall from doubling maybe X% So substantially a of brands, probably as year started me of a So higher look out. the global of that the you

say us. market. marketplace. -- mentioned So growth share has France is parts above South I probably say continued here growth Korea. steady around South also driver to for X- United my opportunities, very trajectory second I seeing trajectory a in Korea I on future And North isolate would in U.K., is a we've Europe, also. a in countries particularly an opportunities we the prepared And strong influence across for in that when X-year world We're in Western strong the it's States, market market even performance would highest actually Korea European trajectory great I thirdly, important sorry, we're the -- seen of been remarks, growth the seeing our our but very think we're

strongly. very there. performed has the turnaround Australia in a We've real business seen

highlights. those And the so are probably

around do. market very it anticipate we more remains because more the and think I And a we've focus in challenging very, got large we're the long range, some optimistic that like India in long into around a But number investments issues market short of substantial putting very but of term. little will think, we're short-term are be headwinds the I big think China, some I are we bit a and a success. market we're I think term, work slightly a some, the to that in but do challenging is kind to future, market, about there in did markets, Japan think sourcing India creating shifting growth the I that

Very helpful. Andrew.

above that of fray Is a a little expected. that here I -- the geographic the be you'll after in on I'm tax do is lower sustainable rate soon, pools, tax dynamic onetime do like a this, reflective a on It than I questions bit have outlook. came but And question Or the that? there to sustained structurally what you view profit I of mix is related a guess, rate?

where Kong, tracking operations Netherlands. rate And benefit that for million Yes. Thanks, that we don't end of Singapore so the adjusted out have onetime to had at back But tax to tracking IP turn to Hong think our over backed Yes, moved I QX, I'm purposes [ Jim. from very we our ] and the $XXX -- of that created we -- EPS. tax of somebody over else. excited

of rate So have our underlying current does you year. could have a underlying idea the That this benefits tax true better for for year.

get we to how the that's XX%. So

some forward. still mix, is in tax long a we we So also right year. and reflects geographical just picture I XX% think it restructure going use our saying have so this Right but now, structure. we're for the term, XX% would better

Nardone of comes from Bank of America. Chris The question next

you come that the you understand core against some business to allow growth. on this expecting And margins would are better, the relatively level be through do strength? flow will about the if to underlying your from to margins spend the expanding line mid-single-digit of your bottom Crocs Or year? assumptions trying for talk in stable you what I'm that this outlook Can just holding back year? in for gross

great a that's question. Yes,

we're what pretty cost -- after with think some our year, we expanded significant had that's on So point. gross this they pleased freight some obviously, XXXX a tailwinds. was We nicely for margins at really normalized tougher the

that and the you've we We got think were mix. takes, at puts that is where a last mix a given got of year fairly currency, from pricing you've got we place product just be. think and So to you've all about freight, good channel perspective,

if So as necessarily dollars to we other should we let we're as because the really what exceed that to leverage of decision good India said, investments, we focused as we've invest margin and make revenue an growth will that investing -- India This year, that's tend flow perspective. invest not on our or growth, see and long term to the whether long-term and If you growth. through expansion call margin well international your have about, we markets operating in some really to as talent for margin continue talked conscious made operating on we on revenue those we sustainable your SG&A. the

to rates the then just margin underwriting a quick And this your gauge Got Can how provide in an today? just Red disruption you follow-up. it. year outlook. freight business what of your is year full you're as Sea impacting trying for That's helpful. And very assessment initial

Yes.

Overall point. and from at mostly we're really now, So a from right this couple freight we it's our we're perspective, of a rates seeing our our an time seeing a EMEA this change a perspective, weeks to impact Red material business Sea -- seen shipping delay. at from point, haven't

play would I I is business. impact not going this this how happen our say know to what's out. not been it's don't going point, know material we a don't year. So to But it's Obviously, at to this

Jeff Lick B. question Riley comes from of next The Financial.

XXXX promotion where in at back point congratulations if take look wondering role. brand my Crocs in starting a the Andrew, well-deserved internationally with that extend million incredibly international was at you and $XXX people and on in I be as and America I'd $XXX argument a was increase Obviously, than in. I there's even North U.S. a U.S., way was brand and the countries there's than and an Crocs think certain might made the the better to more populations little resonate step

had to if distribution. the you the up to done market just wondering leading with influencing customization, speed that the pandemic, things I'm So social all

U.S. Obviously, did first. in the you that

be international, kind then you big, I U.S. hasn't happened. if dynamics do critics disagree the and would what not And indicator say, you use at there? U.S.? seeing well, kind wondering the "-- is as wondering just was between missing might like least the the could are should internationally? like And If of guess that a us I has back as of -- people as the leading than to you "Gee, you're the international speak U.S. where U.S. come going to a maybe the I'm what to what you anything, give U.S. you're if accelerated, that at, -- bigger, could obviously

about pandemic. think -- really sort it's saw, think like U.S. sort I of the right? flat great of to for the So Crocs through it, thinking picture way What I into brand marketplace grew 'XX then 'XX and the started the just Jeff, everybody. we Yes, in dramatically honestly, a in late of paint

pandemic when was of of home, at put Crocs the the to people lot right? a they're real world, where well, that people wear to to, kind think out happy back in that company not they're I but happy down and the Crocs outside of we're

different proven what's the work think ways, the are I hopefully, in happy has innovative incorrect and that in out we're that be world. the in point, it. with exciting at product that Crocs high there consumer. happening can people I We're So personalized And consumer product think excited is the and engaged product and with to is it's a in product this excited comfort a in many engaging a with with new high-value to in be customer pretty real

our that in number of markets. trajectory repeated So a business international dramatically. that grown that's seen We've

if the So U.K., growth. probably in year look accelerated our saw of third markets very we we like at

we're that So out. trajectory seeing play

remarks, marketplace as And so highest as earlier we -- in then an the in prepared our and Korean question have share of market today. I highlighted the Anne, actually and

even the above So U.S.

your Crocs the they somebody's around key their off markets component might there a easy into or home. a go of many in there shoes places better the U.S., point whether some world, when on there being to building people in brand into and are be that's even up take kind go where So resonate culturally, where actually than

and of strongly. be And come U.S. business. not we grown then important. a plan, quarters, were I like super a international our seen business guiding will growth I We're the international that lot $X bigger be mean, viable has our clear out will when billion the we that's clear, thesis. just very international to in than of pretty the X be last think you've Asia that that think I the business, So did

concur [ can we ] So

from comes question next Trading. Sam The Poser of Williams

have X. I

you're to you working Crocs the brand and model talk to planning, get how make evolving within to and role the brand about how intend work can new that demand Anne, especially the further the with working is in towards? pull your For order that work. that And Heydude you

And remarks then went about here. expand why in Andrew. you it for you Andrew, about on Anne is prepared to this -- promoting she a process the talked Could just you position. through long of sort gathered. It person in wasn't the for into best the you I more being sort But some can of what she quick from job nuanced your view? ended of go discussion why up

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answer a of thinking Dan up. now for good is Andrew you, getting

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So year. these We skills that implementing. that do hard really are and last worked we're tools new to

that accounts looking and place the we're sure and where right have as also the product product So we depth making about we're seating at right Andrew that thoughtful mentioned, also put right and in things. the that, we -- in

some on sells it mentioned, a on, things, So we're and next you fast, more year. pull model. for letting little it that's focused are a be demand short then we as really And if great that's out bit and

we're existing about on of kind So how think it. we that's the side. about That's thinking how croc it

Great.

I both look, right? the great business, important, CFO. answer beyond confidence question, is of the abilities commercial consumer of trends our in have second a Like we kind the understanding her of as knowledge flippant her mean the your so my So acumen,

thorough we our we've the board, senior do So We very And been We transition that of that's conjunction with part do have say I all that would around leaders. this in some the is important. you'd for process succession it of planning a time. expect. as this. for doing

And in spend this I is other she industry as bit very definitely wish foreign job. think she's in Michelle things doing. prepared amazing have a it's I would and she's like remarks, a seriously, an is this take well. this that also in something been said So we mean, some we and long done we doing for to retiring and time my time the more

So it's and a natural transition I think very well very planned.

I the is much question the for in quick have of going year. grow like beginning flow enough. sort And It sort over way too given they're it's looks follow-up of thinking overreacted the that put on of normalize this the of half then when retailers of the of year. probably about of product were at back business the may what's comfort much and else's to now into just things Am -- dude writing the not marketplace Anne. about have and way the as year the in How seeing spring, you the and And they a to were would was written retailers somebody correctly? year, going middle last orders move this sort that's the I starting overreacted throughout that

Sam. marketplace. mostly that's think I Yes, very the understanding mostly of thoughtful a

comes question Abry Next of Paribas. from BNP Tanello

North I America. up on Crocs wanted to follow

changes distribution how the flow you changing frame give for Could model also maybe that? those mentioned time little with on what the a more changing, what's You and the detail P&L is Amazon.

question. Yes, great

in to are third highest in where sold. kicking more about marketplaces step think brand a talked back, global control we trying I really the as at globally, So have our we level is brand our call,

a PBMs talked and digital front others. marketplaces or So those on we on about that's

And so directly consumer is marketplaces. those us do the to sell to the to way on that for best

direct-to-consumer it's sale So versus sale. a a wholesale

of P&L, focus that's But point. SG&A, through higher the dynamics not the really how a it it's not the higher revenue. So margin, flows higher gross it's

and is these shows for performing expectations, experience just and distribution this changes. sure focus The would been and in has consumer -- our up say with provide how the consumer. perform it consistent a our how I that model making to we best controlling brand consumers our line

so And continue we to path the down will expect year. this

Rees to our session. I closing Andrew concludes This any conference the question-and-answer back turn would over remarks. like for to

for joining everybody express our in their interest and today to company. wanted our appreciation sincere us just I

a thank and you So great much, day. have so

today's you has now attending presentation, now concluded. Thank and may for conference disconnect. The you