Crocs (CROX) 7 May 242024 Q1 Earnings call transcript

Good day, and welcome to the Crocs Inc.

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

you us thank Inc. discuss and morning, for to joining Crocs, Good quarter first results. are Executive Chief Rees, Mehlman, me Andrew With today Chief President, Brand Executive Croc's Officer; President Officer. and Financial Vice Anne' and

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

of would laws. to remind this begin, you forward-looking is Before the call of harbor accordingly, some securities I and we subject the that like to is safe provisions on federal the information

Form These are expectations regarding for to with intentions, unknown These performance but other actual achievements statements XX-Q materially. more strategy, or including our known and other involve on our outlook. statements include, factors, differ the to, these limited not reports cause which information financial filed plans, uncertainties. refer and risks and to and on SEC Please results, objectives, uncertainties statements and our report may quarterly risks, our

or to otherwise release we currency their Certain GAAP cited rates press be contained the financial this to metrics, in measures. adjusted unless counterparts constant amounts refer as on will is as issued basis reconciliation non-GAAP these non-GAAP a stated. we All of growth revenue morning. A earlier are

turn this Inc. Chief to At Executive I'll the Andrew time, Officer. over call Rees, Crocs,

points by and both guidance. XX% strong and to per of XX% enterprise, and our morning, Crocs top and brand X% very outsized performed which for HEYDUDE Erinn, improved versus quarter Adjusted the XX% first joining ahead share grew guidance the we reported everyone. year, margins Revenue good We results, on you, exceeded by us year earnings Thank growth Thank grew you gross $X.XX. bottom today. of of for adjusted prior prior by to well and line. led brand our XXX basis also

market One, ignite and and drive global to we brands both durable our on growth. to remains strategic are for and investment behind across existing range enterprise new perspective Tier to our icons X diversifying awareness three, product strategy fuel occasions. two, and gains methodically new from attract and X initiatives Our drive an consumers our through across consistent focused consumers; usage share our talent, growth digital and and consistent, primary relevance brands retail; marketing, markets through

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year-over-year. U.S., with #X we spot Survey, world. brand Starting socially Sandler mind the playbook first Spring taking quarter the the And our footwear exception. no across XX share stock with led was marketing the consumers with Team in ranked Crocs our digital-first continues win the to and the In taking brand, in top maintaining the Piper

our This of consumer. brand broad teen top through moments and marks democratic us our partnership that years affinity brand the over The X a U.S. create a for being engagement array model. brand consumer to XX of drive allows of nature

Hello Toy Kitty from During a Story streetwear and our successful to range brand. Chinese Clog, quarter, the

own wholesale offering DTC. and Toy date our partners available across Collection licensing Our was to Story of one partnerships most global successful select the with

our brand. luxury with a second In collaboration addition, Rocha, we launched Simone

and markets and was launched between almost collection sold priced $XXX. It XX immediately. in X-Style out $XXX Our globally

we both product, led our and and personalization. by about are X pillars: classic our existing through Growth seeing quarter first think clogs continue was we sandals new we the clogs, in to icons. prioritize consumers our and As to our brand come

highlight was double-digit growth another Our Kids quarter. the in with business

create the and success consumer. for as franchises as well. to This multi-product the on Echo DTC and broaden during that our usage we Storm, our Sports the Foot continue a of performed Echo We in occasions the launch fully-molded Franchise, sneaker. launched quarter well Building Locker channel JD

consumers. new of In purchases fact, own dot-com and our XX% our Echo Storm with

spotted Just Franchise were weekend, the in visibility further expanded to we time them. Steph Nikola All Crocs Jokic through of our slide players like Star for Echo wearing NBA Curry NBA and

we our our of Getaway. leverages newest franchises, During as known new rolled quarter, the material X sandal Classic Two Slide Trap and The Getaway technology. proprietary Version out first the free-fill the X.X and

Within broad this found franchise, the segment. seen have and momentum these have with flip a consumer positive with and resonate we the strappy that styles

increase For the to overall in year, and we in continue expect our excess growth to grow penetration. of sandals

led Jibbitz quarter, vehicle growth personalization by the digits in Asia. double grew Our in

within freshness continue white We space Jibbitz, Metallic, texture including ] driving focused wholesale. and elevated number and through strategy around to personalization our higher see our and one, speed Two, is digital shimmering penetration pillars: to continuing for X ample to and market. free create [ product

strategy. distribution to on Moving

market the ahead of The the better-than-expected sellout in took strength trends of versus several are North well supported underlying by particularly X% and channels. during We strength revenues quarter. American and prior geography wholesale market Tier was year, in pleased in and DTC our North by grew share our America meaningful expectations the markets. broad-based X across

growth again, International we Australia. triple-digit grew China in and XX% year. versus prior once And saw

direct in led Germany. growth the grew Our by digits, and Europe France double in U.K., markets Western

have on China, bullish our growth to significant we in prospects. remain long-term opportunity continue and We

with substantial won Liu Liu our Yuxin of drove campaign Super we Super category Women's brand the within million a Clog brand stream live on First-ever to International Crocs Day Geo campaign X-hour Clog. X featured Day a Tmall. on our generating [ the during During buzz ahead reach ambassador [indiscernible] announced and domain on a A, and continue to women's announcement quarter, the new community. and Tmall create views for came [indiscernible]. footwear Yuxin the into classic spot ] drove This robust #X with and played and XXXX, our Brand X relevance

responsibility to efforts corporate continue progress. Our

Crocs consumer our from new form expanding Classic circularity a our to we're Takeback materials Crocs the Old This furthering are New all by in program the Life repurposing We edition of in stores Clog. limited fall, U.S. well-loved Crocs commitment

HEYDUDE the consumer. our for Wally to and for XXXX the solidifying is iconic the relates the focus it franchises As Wendy as establishing business on brand, and

inventories to segmentation across partners. price and We on have integrity wholesale more maintain improved worked create digital, channel

largely has We expected. guided driving rates Easter March, performance sellout upside short quarter expectations with first out said, wholesale. played into April slight revenue overall That we as softening in and of fallen around Our range. performance strengthened our to

retail a on the Based balance more trends around prudent we're choppy have year. of taking the the approach for visibility, given environment, quarter-to-date and we the

the sell-in converging, discussed, we we sellout As our segmented and have have in trends we inventory the better focus year is sure with making and end on channel.

to few Before a I announcement. like discuss highlights, leadership on our recent touch QX I'd

we for President leader for of we new ago, strong as the announced next growth brand who weeks the phase for a HEYDUDE, Several a brand. see

Inc. to back our We Reilly Crocs are to thrilled Terence family. be welcoming

week a last brands, with brings started and Crocs. him from including best-in-class and reputation Terence Stanley

products, and communities. he by record of ultimately and brand iconic executing leadership ground providing global a to addition proven-track building playbooks leveraging has creating relevance driving perspectives, In building

year. in Now this spring, highlights. to with turning Sandler, brand with consistent the Teen was preferred this #X last Taking rank QX HEYDUDE footwear the Stock Piper Survey

successful perspective, we product Madness. additional schools continue which QX, proved From a our we color, to through and In for Wendy Wally the just time collegiate expanded to our during icons quarter. graphic, in program height, establish March X

online launched sellout of with to so Big an Lebowski, XX% brand. the exclusive, unique collaboration in the We consumers need also process

for Our height the and a sneaker become Hudson own new promise female saw with We while new We wholesale to Hudson consumers an who a lightweight to hit comfort. Him maintaining channels younger the our for gained Lift introduce Lift silhouettes the brand continue with exclusive in Her. chose for quickly DTC partner. a choose of our and addition franchise Hudson

distribution we a our the with XX is it line at approximately From outlet we HEYDUDE brand. perspective, and open year. with new X to locations this in opened plan outlets expectations, performance Overall

we wholesale the with to done we're base. side, pleased work clean the have up On our account

Our improved customer go-forward segmentation. focus is around

brand introduced a with key have Germany, supported digital sites both the we U.K. QX. dedicated by as well to in markets during Finally, and wholesale placement as partners

influencer were supported by launches media and These events. key

priority of North and core the awareness brand. we the our the drive internationally, improving XXXX market, brand of see the long-term is offering to the our build health as around in starting for American heat we're While

share and opportunity. invest to behind laid further have We to support market marketing, retail digital to plans our talent, continue

QX's plans near-term Crocs, raise taking HEYDUDE outlook our year. per longer performance are our by for play to share portfolio our us our showcases, diversification out, the the of While led earnings and to for enabled record

will margins [ ] durable the to market share Anne gains. growth to walk turn up fueled over set investments quarter. the through call by will continue gross and for I strong to We offensive make for to long-term our ourselves now financials

quarter am results, X% I last million our guidance led brand. in generated with the and almost the We across morning, first Crocs all consolidated metrics. you, over good Thank which pleased revenues extremely exceeded year, growing Andrew, by everyone. $XXX high-end

Adjusted points to $X.XX. XX% share gained adjusted For of guidance came margin to per the quarter, of XX.X%. well in margin adjusted earnings ahead basis and $X.XX of gross was our XXX operating $X.XX

XX% driven Brand year. growth increase $XX.XX. of were XX%. For sold and brand, XX pairs an the $XXX million revenues brand Crocs shoes, XX% year, X% were up to last of by versus of growth prior million, XX% DTC to a of wholesale The ASPs relative growing

expectations revenues driven and by year the was in strong of market By were X%, Growth up wholesale brick-and-mortar. to growing ahead geography, was versus DTC $XXX North growth prior million. at X% XX% our and led share, double-digit America by gained

than During growth by International Crocs were of XX% growth DTC and North partners opted million earlier on American the to the our wholesale of performance wholesale XXXX, take we about the product previously had anticipated of from XX% solid XX%. $XXX of brand. based revenues up strong quarter, led

As double-digit and by Western direct quarter. markets the China digits U.K., led Europe again growth France grew We Andrew noted, Australia this with in strong triple in Germany. growth and saw our

were price our last matching XX%, price on online. selling from XX% ASPs were from average last of decrease $XX.XX, X fill XX% down full million guidance last last selling. to ahead pairs from our X% shoes, focused as year. pipeline $XXX to marketplace QX, HEYDUDE. up price a up reduced improving Revenues but Relative HEYDUDE a year, of QX sold Turning from and brand our was tailwind The continued year. of we million,

ASPs. channel DTC was points XX% Wholesale XX% result Consolidated revenues quarter margin on continued XXX we higher for were through down or XX.X% as adjusted XXX gross from than year a management down basis health as brand up The focused the brand in year. higher from prioritizing last adjusted inventory of last was basis gross prior points Crocs first the was XX%, margin year. channel.

inbound the lower coupled internationally product discounting. select During were of drivers lower freight expansion primary and and the favorable increases quarter, margin price costs with

at below in points basis brand driven came HEYDUDE in in XXX investment our gross line XX.X%, rates. adjusted with offset and by by prior logistics margin reduced partially year, distribution expectations but

Our quarter year. XX% increased to adjusted first SG&A prior dollars

XX.X% driven support investment marketing prior up to year, long-term talent, and points XXX market Our was to SG&A in compared basis share DTC continued gains. and by rate

compared declined XX but to favorable last gross base. margin Our points to on basis cost our operating XX.X% our XX.X% higher for expectations favorable first period year, revenue, the and to margins leveraging adjusted was same quarter

was quarter per channel. the $X.XX rate We XX% adjusted increased on to quarter tax sheet earnings with ended and XX.X%. our in our our balance share First clean diluted and inventory non-GAAP

balance March last a against decline was inventory XX% $XXX time XXXX, this XX, Our million, of on year.

both pleased of at achieved goal our brands turns We inventory that are Xx.

position million and comprised and of liquidity strong, revolver. equivalents Our million remains of our cash of cash borrowing $XXX $XXX on capacity

typically a activity. working we limit and quarter, high net capital As a debt and QX reminder, paydown buyback is

generation. and leverage we billion intend with target back As remain In down with XXXX, enabled stock a borrowings to best-in-class our of quarter the flow X by debt, X.Xx. ended our total $X.X buy result, and to pay cash we net of

Now turning to guidance.

Crocs QX, with March almost revenues be by we entirely X% consolidated to of international the but to X% growth. expect growing currency as at up to For XX, X%, rates brand X%

earlier product earlier, I American of mentioned As in take partners North our wholesale several to QX. opted

We to expect we be extrapolating to down XX%, revenue seeing the are trends HEYDUDE between quarter-to-date. XX%

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

supported outlook we the by raising XXXX, per earnings year underlying full the For our are strength share in QX.

growth assuming maintaining our currency revenue X% X%, rates. are between outlook We of and quarter-end

our to and grow brand, with expectation between now expect the to X% international. growth X% be from to revenues of prior continuing X% and led we For Crocs X% by

down For HEYDUDE, former slightly flat revenues down our to up. contract expect to of expectation X%, we XX% to below

sales We expect trends dynamic sell-in to improve the each sell-through to and normalize quarter HEYDUDE and into expect QX.

our better discussed and in than wholesale we for be be the we QX As negative expect year to DTC trends to wholesale. call,

plan stores As XXXX, it approximately we during XX of QX. retail, which open to to relates X were in opened

We the initiatives, enterprise strength for resulting the year to now be year. gross approximately HEYDUDE in consolidated margin continue We and level. into plan year versus XX%. expect Crocs accretive operating SG&A up up QX, XXXX for and brand of to XXXX adjusted expect to expect gross the be up margins the strategic in invest gross be to we margin Based the for for margin on brand at to

XXXX, cash to rate, approximately tax to and For expect our XX% tax be which paid non-GAAP rate GAAP taxes still full underlying we year XX.X%. be approximates

to We previously. raising range assume does a debt share This $XX.XX any future per range from diluted from in repayment, $XX.XX our $XX.XX future not are impact non-GAAP to but of repurchases. share to $XX.XX XXXX incorporates earnings

At to expenditure capital the remains guidance continue Andrew to flow expect $XXX thoughts. final cash million Our unchanged, this for annual we call of generation. to $XXX over exceptional back turn I'll his time, million and

you, Anne. Thank

and strong We will strategies are our our to with results continue that win. quarter pleased and and can first brands believe

made have I'm gains. market open marketing, we'll the we this share call in and the for confident talent time, investments questions. long-term in driving With At

question [Operator comes first Baird. The Komp Instructions] from with Jonathan

little the recent HEYDUDE anything new environment how what's versus HEYDUDE, if the And more to specific? should been I'll about X-part new a DXC just background Andrew, think maybe bit ask question. guidance the maybe softness, you of talk for a you've within about to isolate if able could we or related brand some trending here?

Crocs just about feeling what you're America, performance separately, then how the looking And comment pipeline on you in DXC seeing the could there? North you're forward and

you, Great. Thank Jonathan.

So made is us what guidance really We our April good a we a HEYDUDE the of seen sellout, I'd came softening think solid. we expectations was ahead in which really yes, provided. on -- But we QX. slightly had I of is wholesale had from our what say we've It into and Easter has nervous.

less that lack of period promotion. I tried during than think of Easter. promotional the part be the we Easter We is to prior maybe were

have Easter early But to we is were some robustness we consumer to about and of the softness, also market. do always relative market. concerned to tough, can so continued I think missteps the the going we are see made might what relative we

really make our and for talked in a partners. XXXX sell-in we've as goal driving get to for channel healthy business So HEYDUDE wholesale for sell-out and about is wholesale get balance to inventories our down our that and we're the sure

our business accordingly. let and to at expectations this it's manage So take DTC hit on I'll the Anne down trends. prudent think I point, the

just specific contribution HEYDUDE. question retail your for to answer And Jonathan, around Yes.

new the products to blocks throughout give that's So think there, just just so stores, we for approximately obviously, build we're about supported strong of that introduction. opening and year, then HEYDUDE a little the And contribution you pipeline right, as bit product a more we XX the guidance, by and year. new the building expect revenue to flavor

because that expect the think But year -- retail highest that wholesale than of then level, be DTC to growth to you perform for in will kind at the and of of but revenue contribution. And when still wholesale. the and we terms be QX strongest better through down

we comparisons, selling and some select then of also We realize will lack [ easier markets. international ahead ] wholesale will

your as So the HEYDUDE just trend revenue kind thinking you're for of through year.

continued in And for product on was we America, that. pipeline growth and than good perspective expectations. then QX, DTC, which the from XX% North definitely really was which Crocs supported of really saw side better by a in DTC our That

by about for as QX. out to shift great an growth Easter Andrew expect coming be the as had we the extra of North there. muted of day was product We do QX well supported leap talked feel for year, America so as QX kind I more about pipeline

role. luck in new Great. the Anne And best of

Thanks Jon.

The Yih from Barclays. question next comes Adrienne with

to my I on year. Congratulations start nice question order the on guess a is the book. first forward

quality seeing optimistic? more sort deliveries other. sort of the a speaking, is talked earlier and about But to of fall shifts visibility. get starting conversation beyond of about You you're one that that's the earlier hearing or place on typically shipments, that's to the and improving generally get everything that And channel I it from

to -- I looking inventory you're XX%, And then very, a believe normalized lot very to back for kind need would can't you second Or and the that XX% as know is, this, follow-up of of more down my down a clean. channel your sort is working level? is level? What there's of asking consumer uncertainty I'm I a but at maybe happen at it start to normalized

I get do pull end the about say reason what how the so to the our what retailers Adrienne, and for I forward you're how for of are customers feeling or the -- trying Great. back our think are big year. is at,

answer in probably think pieces. really, I X I that

reason product. of sell-through strong seeing they on were Crocs forward I seeing the all They're pull brands. the strong think their the was not sell-through for on

So they more product wanted earlier.

trying think stuff Easter pull I the shift, earlier. probably to in have of and they underestimated we're kind

braces, for going that the a the off of then it's saying assessment year. market we're to be So I kind than strong think of the rest is and market the to a closer of in this

-- order the order brands, a for our guidance about from buoyant I the really both we end solid I provided. But they I say feel yet. support would underlying that of our of books What not super that quarter-to-quarter the are it's say a books, channel is definitely and we back about sort is would think adjustment. great year

more for looking we're signals. think I definitive

the We level inventory about target And good We the really really related turns. right by because to Xx for question inventory -- feel is the so But inventory. the brands, welcome, and kind where way. down. Yes. which turns at the then we that's XX% is think question both we're inventory of

And the For transit QX see on to starting don't down to then kind year, to cleaning still were the be just up still even I our of HEYDUDE on times XX%. the were return of inventories expect some we last we side. year, it of rest Crocs side, the normal.

expect and actually QX be I much the So year-over-year. that year. in to flatter moving then throughout

So way look to it Xx best to the at us of turns. model kind for about is

Next question Stifel. from with comes Jim Duffy

question on on and Crocs margins. can optimistic a Crocs speak the then margin view have factors the the HEYDUDE I regions for and on more one behind in you changes brand to the Crocs Starting on the assumptions? revenue brand, responsible

obviously, assumptions, Jim, also we order good on a we then Crocs trends. than definitely can revenue see have visibility as America DTC so and as get really the books, pretty on through, we QX, anticipated into move had the into we better North we And QX side.

Europe, us So our as say I we -- in we're well, Australia, what also China, raise. really about I seeing would some thing that's strength do and think revenue really so led very that the but the to gives other confidence, markets international talked is

price in we that saw overall saw which some things. gross On full couple the of better supports side, margin. selling One, gross a margin we

relief Crocs the cost pressure side. We also bit little a of have on input seen

And seen kind quarter down. those first costs the of our we've we come as in so negotiate

of as remainder assumptions the so taken through those for kind we've year the look And we that. of

assumptions gross those the supporting higher Crocs the are really So margin side. on

the as and the talk speak Or effort, Anne, to pressure? ERP for you savings you is can with Does revenue incremental Got the implementation the place Can HEYDUDE you timing, margin so the revenue for that lower come offset? is forth? then, GAAP it. HEYDUDE the an margin some rationale there And where And XXXX. have about charges new.

Sure.

Yes.

the we're margin -- incremental anticipating not margin a some revenue from lower of the for pressure So from HEYDUDE. reduction revenue,

our we -- playing margin mix thought our is is it playing would promotional pretty channel pricing, sort out strategy, think much be. where we I the out of

the our is so reduction. a about And wholesale we wholesale obviously margin revenues, We don't are I'll our is coming think and revenues margin really reduction and good revenues guide margin talk obviously, see let for from as DTC HEYDUDE, the Anne higher ERP. than

gross those HEYDUDE to ERP relates which -- actually, kind I'll we've our And shipping live is the about that Yes. warehouse, of or that margins one we've new thing that center. supporting the implemented taken distribution Vegas is talk Las

the implemented like And to so that for the year, and will us that on that, DC, technology -- is implemented also support related that. obviously, From and we HEYDUDE. efficient storage side HEYDUDE being for things throughout more also we new

an technology so impairment we related piece took other that And on the to implementation.

HEYDUDE. technology on As are we for now live

So really that. excited about

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

run you do improvement clarifying XQ longer recognize I over shifts in elaborate the as maybe a Terence embedded there's envision an trend role how if just you HEYDUDE, follow-up in if brand? you're the For just reflects major But you your took if early quarter-to-date? of guidance some his seeing you'll on can mind President's term, plans? week. Then so, the Or guidance? do last And the strategic

Yes.

HEYDUDE talk other let will -- and I'll talk So piece. through me then the through guidance Andrew

current that trends HEYDUDE on the reflects guidance, are seeing. we it So

improvement not are QX for an we time. anticipating So at this

Great. Thank Anne. you,

weeks obviously essentially point. on has board this Terence been at So X.X

it's fair So strategy. not articulated dramatic to we strategy say I anticipate I But him a shifts. new to would think not have do

together be pillars that the working franchise. strategy, it's of and really on much kind aligned Wally I think about the our been we've we're this iconic as to within very Wendy key going

which we've relevant ago I done. the put Crocs think for we job better years for in incredibly where relevant the more that's and is relevant brand same more and franchise number engaging think need iconic HEYDUDE the a around that place of to making do we classic wanted what make broad we really, the is what more franchise, that of to for consumer We a around strategy world, And those the consumers. consumers. consumers base is to a And franchises

shift from product see strategy So from we a or a don't from perspective. a marketing perspective channel a perspective, distribution major

talk it. prior quick Can Got message? Any which midyear, about then gray Amazon abating on follow-up. to confidence that? the just change your in And Okay. was you market your just issues as a by

Amazon. still anticipate the continue we're guidance headwind we half seeing headwind and market will So provided. that gray We through the first is on a the HEYDUDE of from that in for year that embedded

The next Laura from question Capital. comes Loop with Champine

I'd like price with wondering mean to with by the you would what's units HEYDUDE drill a long in that a into you in I'm business. how pressured goals? shift mentioned also down think your that I I Direct And ASP happened happening full I'm business be shift to selling. wondering business? expect more to what

Yes.

So you're essentially right, Laura.

raised seller we've HEYDUDE a XP for on in Amazon, is we're business, mostly HEYDUDE. which as So Direct our where prices

We units. have in seen drop a

that's We for expected been have drop unit and seen in for sales. productive think that. And ends, a the net-net, but I productive brand our margin we

will over products new and for marketing is as there's some that, mitigate introducing in kicking that HEYDUDE, say, we're time. our evidence would I

it. is guidance an HEYDUDE is not? And business in the I direct year full mean, for or Got your improvement implied in over time --

year. we So direct our business, full guidance as this business dot-com Marketplace our which outperform I own that includes retail will our business is our that business, have would wholesale well as said our year our say what

that's so our in And guidance. year full included

Raymond from question Patel Next James. comes Rick with

given half half weigh you investments quarters? few of first margins what in little of perhaps provide you on as margins on guidance updated timing for Guidance just of just think could the think we Can for about your year deleverage maintained bit for plans back or to was next out SG&A the the terms sales for color a at shake operating that. XX% ahead the the despite

Yes.

margins. think I pleased operating outperformed in well Obviously, with they our I'm QX. really

a So we're a about feel higher high by to gross approximately are good quite very approximately investment. you factors our invest there, implies EPS XX% I of the which anticipating but look guidance. obviously, really supported at allows XX%, that We're our us if in business. maintaining bit margins little bit

very operating feel in approximately XX% I confident So that margin.

the ASPs we And implied guidance brand about curious talk the should XQ. think for also versus can going just extrapolate you as performance strong I'm what's we in about Crocs forward? units how in very

Yes.

perspective, a in will unit actually from have We nice and Crocs year. think currently increases brand growth QX. more this ASP price a We I should had based don't on for through and through abate guide saw flowing we to any which planned QX obviously, increases price that. bit of flow QX. international a QX little that We and QX in in little bit don't

provided. this point. So feel I at think the I of kind to guidance the confident we need color that give in we all where That's

Chartier Crespi, And the next with question comes from Monness, Jim Hardt.

so, I was your business, you if marketplace two? if if e-commerce the the drove what HEYDUDE wondering meaningful could between versus about own the And divergence? site talk performance any on there's difference

to introduce lot products color, to provide. Because Yes. We able we we're out. a don't on obviously give of bit new and own dot-com. you give our of -- some we obviously don't break we're own our more drops that But dot-com little quickly just a limited happy

in we for contest better that the week, and to introductions a and broadly. Yes, performing the anticipate the is new going continue. we think that which was collaboration them pull that running think that than do continue did for will corona to we've had product environment dot-com be more and our had trend we styles forward marketplace, has earlier, exciting and we Lebowski releasing own HEYDUDE. last I We we been some did testing also that

for of international markets. you're benefit HEYDUDE quarter just from Or -- you fourth those markets and ahead planning I some year? And next Are sell-in U.K. for could the that mentioned Great. and are think then Germany? for there additional

a question. that's great Yes,

will So select be that and we have to. to we we sell do some that distributors selling

and Germany So for -- are the markets us. U.K. more direct direct

really it's around the really a for HEYDUDE. that's So revenue comment distributor --

question the Research. And from with Kummetz Mitchel next Seaport comes

expectations it to there, the taken you've HEYDUDE, in but wholesale, is down so say On more both for the DTC and outlook the fair change that on wholesale side?

say Mitch, March performance Yes. for QX, HEYDUDE with I our expectations definitely, kind we've to revenue versus -- of negative the that's will originally year-over-year, biggest but gap We that wholesale seen change in and big to think wholesale. kind been in be I also overall the a better negative where wholesale we QX. be do yes, is by expect expect largely we of which do is planned than QX, it driven down April. sequentially

a So assumption. I that's think fair

helpful. goes just fourth in DTC the rates which up sellout first kicking assume guide with I sell-in big you for as step maybe of back reflect primarily that does a quarter kind That's some that? far think revised the is then for pretty walk kind And wholesale? the half. sales, around be assumptions half spring? just Does of the as from would flattish better the that maybe Or that, through stores, outlet Can in HEYDUDE, the

absolutely. Yes,

kind in really that there's international third think back that. piece, as realize ] lack of from the the place The sell half perspective. to just things QX. We are in builds retail easier comparisons take launches. mentioned a in market sell-in I Jim, [ to and driving I contribution wholesale distributors starting Those from ahead really X international select then of

that are the big change. that drive those X pieces So really

smoother before, on bit X-year this, basis, look you of a it I but basis. you like a what it can it's at at lumpiness had if year just bit you need on see because we year-over-year it, the that a little look little If to looks say a than

comes question Poser Sam next with Williams The from Trading.

question. a got I've Andrew,

the you the discuss relates concerned to that HEYDUDE HEYDUDE consumer. robustness how Crocs? change and on in were guidance regard to that of in the you the both to on Can about said You that

clearly mid- I the So is right? look and of week-on-week, better the we would than market, it what digits you first the the to Crocs Yes. market so kind Yes. see that year, are for I look market. we double industry is -- footwear -- if is brands continuing in that at to quarter high I'm if them. mean single of referring say, down are there data, data of so there some the one doing at

right? underlying that market. well, to that point, well-known There are they better not the this on are than market, relative the doing doing it's is others different At trajectories also than HEYDUDE So are definitely market. better substantially

is spending reflection money market consumer of a underlying the I less the on think footwear. is

the spending really on like. more they're they But stuff money

like you be the guess, was you guess than done have wouldn't as what -- you're good brand? what overcoming HEYDUDE guys consumer have anticipated And you've both you can with the performed and weak I to well, that lots not of do things market it just you the the -- Crocs weak because HEYDUDE rather do with collabs guys that, but the consumer mean Crocs brand? overcoming So to different that overcome brand, do what HEYDUDE, I you're and to, with that that question need do than with have is, I then what do what the with

Exactly.

improved most product for this And So products product we stage. at are Wendy, optimistic new I of but Crocs, Wally HEYDUDE, introductions But unproven be some So derivatives marketing. there our right? about new pipeline are of will them and think marketing, really of. new in and of the are but is the we

the HEYDUDE making relevance so driving brand brand consumers. relevant to And more

comes Tom question from next Wedbush. Nikic with The

ask outlet you're Is it liquidation different specially mostly channel? I how and kind selling to in the hear flows about sold clearance How about sorted, there? Just wholesale the stores being Is -- what it are that wanted Any merchandising... but you're product? made thinking just than I for those you're being channel? the of is opening. to love the product what

Good Tom. Yes. question, Great.

X kind talked got full-size the brands, opened of quarter runs. essentially other store is opened So the X last XX of year. as we've outlet with footwear stores, through first March that the consistent lot is point format say. The in stores of front would we opened this that end of a at I we about, we or pretty the The

that consumer satisfaction, actually they can the a can find product definitely want consumer drive in their they So and size.

Those clearance current product and be ones have assortment product. in a combination full the in we of slightly size happen even And essentially of will that newer products also to some the older products, of. store quality then back the is a sometimes

consumer old be to higher provides vehicles value they prices can for then at in the incredible it take able the us HEYDUDE hopefully that to back liquidate a product store. story of become allow find HEYDUDE give enjoy elsewhere that provides allows And and consumer buy about a back and the educate away and product us. X brand, the so much liquidate It one brand And the to and fan. vehicle them the we'll to the of

and little say I is are the of in would more that would the working, sort way I for as a opened with We've So store also nascent markets that the we're combination of describe bit really markets. happy in HEYDUDE a we've opened We've HEYDUDE. heartland. markets opened

new working. the using we're introduce of And happy are that to kind both we're stores the customers So to brand.

question comes And UBS. with Jay Sole next the from

growth it's bit Great. hoping can low I'm China. you correct, strong. Crocs a kind China digit I elaborate Andrew, little believe seasonality because triple performance If of in in the quarter, really is of -- I'm on

So about Do through maybe you are could you really then related can maintain about you helpful. anything or the can peak And that something seasons. number? there that spring timing if And us think tell super strong that, was boosted to growth that thinking spring? have would summer be how you and

that's Yes, this first counter Yes, quarter is sort through sort question. quarter. quarter. of It exactly quarter China, build seasonal great right. the does you're our not the It's a in a

this is different we the I that Super one did call remarks thing year, think our a in on that did Day we out is win Tmall. Brand prepared

and of you to a those For go get bid you selected. familiar, that through not process to that's on

heat, strong we'll so substantial We and of and event presence a do to to our year. event -- China brand QX was believe brand a a we because by driven of selected were growing and in growth openings. were a but very QX, digital is productive. that consumer incremental the showcase remainder growing also able noncomp store able through very very, a and following, maintain rate That the is the really which We noncomp in be

partners plan number significant partner this to with stores franchise open will of year. a our We

have for business a which us. think, will very strong incremental So China drive, wholesale I the we'll in market, distribution

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

call. with much, about Thank happy in for that everybody, your not She you is may to highlight interest brand. and earnings be I want may that, that, moving on us joining the and announcement Susan as of President. over Crocs to the will role be full-time about Anne Healy, join but last will happy our this who us June her very brand Anne's just joining be X,

her I all over want So years. for Anne X last thank incredible to contributions the

thank Anne. So you,

Thank you.

conference now The for presentation. you Thank today's attending has concluded.

now may disconnect. You