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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Crocs Inc | NASDAQ:CROX | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.82 | -0.66% | 123.55 | 123.02 | 124.68 | 126.665 | 121.50 | 124.25 | 1,009,824 | 23:43:22 |
Exceeded All Guidance Metrics; GAAP EPS Increased 120% from First Quarter 2018
Share Buyback Authorization Increased by $500 Million
2019 Guidance Reaffirmed
Crocs, Inc. (NASDAQ: CROX), a world leader in innovative casual footwear for men, women, and children, today announced its first quarter 2019 financial results.
Andrew Rees, President and Chief Executive Officer, said, "2019 is off to a great start. Revenues exceeded expectations as demand for our product and excitement around the brand continued to yield accelerated sell-throughs. We were particularly pleased with the exceptional direct to consumer performance successfully comping an earlier Easter last year. We have now delivered five consecutive quarters of double-digit DTC comp growth. I am more confident than ever in the strength of our brand and our future. As a reflection of our optimism, our Board of Directors has increased our share buyback authorization by $500 million.”
First Quarter 2019 Operating Results:
Balance Sheet and Cash Flow Highlights:
Share Repurchase Activity; Increase in Share Buyback Authorization:
During the first quarter of 2019, the Company repurchased approximately 2.1 million shares of its common stock for $53.5 million, at an average price of $25.07 per share. As of March 31, 2019, approximately $102 million of the Company’s $500 million share repurchase authorization remained available for future share repurchases.
The Board of Directors recently approved an increase of $500 million to the existing $500 million share repurchase program. This leaves the Company with approximately $600 million available for future share repurchases. This program does not obligate the Company to acquire any stated amount of common stock, and may be suspended at any time at the Company’s discretion.
Financial Outlook:
Full Year 2019:
With respect to 2019, the Company continues to expect:
Second Quarter 2019:
With respect to the second quarter of 2019, the Company expects:
Impact of New Lease Accounting Rules
On January 1, 2019, we adopted new GAAP lease accounting rules which resulted in a significant increase in our reported assets and liabilities associated with our leases. The recognition of rent expense and payments associated with these lease assets and liabilities will not result in material differences to operating income or cash flows compared to the previous accounting rules. The adoption of the new accounting rules will not impact our credit facility covenants.
Conference Call Information:
A conference call to discuss first quarter 2018 results is scheduled for today, Tuesday, May 7, 2019 at 8:30 a.m. EDT. The call participation number is (877) 790-7808. A replay of the conference call will be available two hours after the completion of the call at (800) 585-8367. International participants can dial (647) 689-5638 to take part in the conference call, and can access a replay of the call at (416) 621-4642. All of these calls will require the use of the conference identification number 6361757. The call will also be streamed live on the Crocs website, www.crocs.com, and that audio recording will be available at www.crocs.com through May 7, 2020.
About Crocs, Inc.:
Crocs, Inc. (Nasdaq: CROX) is a world leader in innovative casual footwear for women, men, and children, combining comfort and style with a value that consumers know and love. The vast majority of shoes within Crocs’ collection contains Croslite™ material, a proprietary, molded footwear technology, delivering extraordinary comfort with each step.
In 2019, Crocs declares that expressing yourself and being comfortable are not mutually exclusive. To learn more about Crocs or our global Come As You Are™ campaign, please visit www.crocs.com or follow @Crocs on Facebook, Instagram and Twitter.
Forward Looking Statements:
This news release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding prospects, expectations and our revenues, gross margin, SG&A, operating margin, and capital expenditure outlook. These statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to be materially different from any future results, performances, or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the following: current global financial conditions; the effect of competition in our industry; our ability to effectively manage our future growth or declines in revenues; changing consumer preferences; our ability to maintain and expand revenues and gross margin; our ability to accurately forecast consumer demand for our products; our ability to successfully implement our strategic plans; our ability to develop and sell new products; our ability to obtain and protect intellectual property rights; the effect of potential adverse currency exchange rate fluctuations and other international operating risks; and other factors described in our most recent Annual Report on Form 10-K under the heading “Risk Factors” and our subsequent filings with the Securities and Exchange Commission. Readers are encouraged to review that section and all other disclosures appearing in our filings with the Securities and Exchange Commission.
All information in this document speaks as of May 7, 2019. We do not undertake any obligation to update publicly any forward-looking statements, including, without limitation, any estimates provided in the “Financial Outlook” section above, whether as a result of the receipt of new information, future events, or otherwise.
Category:Investors
CROCS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share data) Three Months Ended March 31, 2019 2018 Revenues $ 295,949 $ 283,148 Cost of sales 158,334 143,275 Gross profit 137,615 139,873 Selling, general and administrative expenses 105,037 113,951 Income from operations 32,578 25,922 Foreign currency gains (losses), net (1,217 ) 1,071 Interest income 195 279 Interest expense (1,817 ) (113 ) Other income, net 590 53 Income before income taxes 30,329 27,212 Income tax expense 5,619 10,758 Net income 24,710 16,454 Dividends on Series A convertible preferred stock — (3,000 )Dividend equivalents on Series A convertible preferred stock related to redemption value accretion and beneficial conversion feature
— (931 ) Net income attributable to common stockholders $ 24,710 $ 12,523 Net income per common share: Basic $ 0.34 $ 0.15 Diluted $ 0.33 $ 0.15 Weighted average common shares outstanding: Basic 73,009 68,705 Diluted 74,875 71,668 CROCS, INC. AND SUBSIDIARIES EARNINGS PER SHARE (UNAUDITED) (in thousands, except per share data) Three Months Ended March 31, 2019 2018 (in thousands, except per share data) Numerator: Net income attributable to common stockholders $ 24,710 $ 12,523 Less: Net income allocable to Series A Convertible Preferred stockholders (1) — (2,094 ) Remaining net income available to common stockholders - basic and diluted $ 24,710 $ 10,429 Denominator: Weighted average common shares outstanding - basic 73,009 68,705 Plus: dilutive effect of stock options and unvested restricted stock units for both periods and Series A Convertible Preferred in 2018 1,866 2,963 Weighted average common shares outstanding - diluted 74,875 71,668 Net income per common share: Basic $ 0.34 $ 0.15 Diluted $ 0.33 $ 0.15 (1) Represents the amount which would have been paid to preferred stockholders in the event the Company had declared a dividend on its common stock. CROCS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share and par value amounts) March 31, 2019 December 31, 2018 ASSETS Current assets: Cash and cash equivalents $ 86,333 $ 123,367 Accounts receivable, net of allowances of $21,385 and $20,477, respectively 176,288 97,627 Inventories 139,209 124,491 Income taxes receivable 3,755 3,041 Other receivables 9,073 7,703 Restricted cash - current 1,878 1,946 Prepaid expenses and other assets 14,980 22,123 Total current assets 431,516 380,298 Property and equipment, net of accumulated depreciation and amortization of $81,899 and $80,956, respectively 29,874 22,211 Intangible assets, net 44,724 45,690 Goodwill 1,579 1,614 Deferred tax assets, net 8,510 8,663 Restricted cash 2,129 2,217 Right-of-use assets 163,266 — Other assets 7,608 8,208 Total assets $ 689,206 $ 468,901 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 89,555 $ 77,231 Accrued expenses and other liabilities 78,204 102,171 Income taxes payable 9,466 5,089 Current operating lease liabilities 44,618 — Total current liabilities 221,843 184,491 Long-term income taxes payable 4,344 4,656 Long-term borrowings 215,000 120,000 Long-term operating lease liabilities 125,055 — Other liabilities 19 9,446 Total liabilities 566,261 318,593 Stockholders’ equity: Preferred stock, par value $0.001 per share, 4.0 million shares authorized, none outstanding — — Common stock, par value $0.001 per share, 250.0 million shares authorized, 103.8 million and 103.0 million issued, 72.0 million and 73.3 million outstanding, respectively 104 103 Treasury stock, at cost, 31.8 million and 29.7 million shares, respectively (452,196 ) (397,491 ) Additional paid-in capital 484,932 481,133 Retained earnings 145,698 121,215 Accumulated other comprehensive loss (55,593 ) (54,652 ) Total stockholders’ equity 122,945 150,308 Total liabilities and stockholders’ equity $ 689,206 $ 468,901 CROCS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)Three Months Ended March 31, 2019 2018 Cash flows from operating activities: Net income $ 24,710 $ 16,454 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,136 7,643 Operating lease cost 14,930 — Share-based compensation 3,634 2,674 Other non-cash items (911 ) 154 Changes in operating assets and liabilities: Accounts receivable, net of allowances (80,722 ) (86,850 ) Inventories (15,099 ) (20,853 ) Prepaid expenses and other assets 6,875 5,112 Accounts payable, accrued expenses and other liabilities (3,658 ) 29,065 Operating lease liabilities (19,610 ) — Cash used in operating activities (63,715 ) (46,601 ) Cash flows from investing activities: Purchases of property, equipment, and software (10,553 ) (1,668 ) Proceeds from disposal of property and equipment 225 16 Cash used in investing activities (10,328 ) (1,652 ) Cash flows from financing activities: Proceeds from bank borrowings 95,000 — Repayments of bank borrowings — (400 ) Dividends—Series A convertible preferred stock (1) (2,985 ) (3,000 ) Repurchases of common stock (53,478 ) (20,061 ) Other (1,662 ) (692 ) Cash provided by (used in) financing activities 36,875 (24,153 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash (22 ) 2,176 Net change in cash, cash equivalents, and restricted cash (37,190 ) (70,230 ) Cash, cash equivalents, and restricted cash—beginning of period 127,530 177,055 Cash, cash equivalents, and restricted cash—end of period $ 90,340 $ 106,825 (1) Represents $3.0 million paid to induce conversion of Series A Convertible Preferred Stock to common stock for the three months ended March 31, 2019 and $3.0 million paid in Series A Convertible Preferred Stock cash dividends for the three months ended March 31, 2018.
CROCS, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
In addition to financial measures presented on the basis of accounting principles generally accepted in the United States of America (“GAAP”), we present “Non-GAAP cost of sales,” “Non-GAAP gross margin,” “Non-GAAP selling, general, and administrative expenses,” “Non-GAAP net income attributable to common stockholders,” “Non-GAAP operating margin,” “Non-GAAP weighted average common shares outstanding - basic and diluted,” and “Non-GAAP basic and diluted net income per common share,” which are non-GAAP financial measures. Non-GAAP results exclude the impact of items that management believes affect the comparability or underlying business trends in our condensed consolidated financial statements in the periods presented.
We also present certain information related to our current period results of operations through “constant currency,” which is a non-GAAP financial measure and should be viewed as a supplement to our results of operations and presentation of reportable segments under GAAP. Constant currency represents current period results that have been retranslated using exchange rates used in the prior year comparative period to enhance the visibility of the underlying business trends excluding the impact of foreign currency exchange rate fluctuations.
Management uses non-GAAP results to assist in comparing business trends from period to period on a consistent basis in communications with the board of directors, stockholders, analysts, and investors concerning our financial performance. We believe that these non-GAAP measures are useful to investors and other users of our condensed consolidated financial statements as an additional tool for evaluating operating performance and trends. For the three months ended March 31, 2019, management believes it is helpful to evaluate our results excluding the impacts of the Series A Preferred Stock transaction and various pro forma adjustments. Investors should not consider these non-GAAP measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
CROCS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES (UNAUDITED) Non-GAAP cost of sales and gross margin reconciliation: Three Months Ended March 31, 2019 2018 (in thousands) GAAP revenues $ 295,949 $ 283,148 GAAP cost of sales $ 158,334 $ 143,275 New distribution center (1) (1,165 ) — Other (110 ) — Total adjustments (1,275 ) — Non-GAAP cost of sales $ 157,059 $ 143,275 GAAP gross margin $ 137,615 $ 139,873 GAAP gross margin as a percent of revenues 46.5 % 49.4 % Non-GAAP gross margin $ 138,890 $ 139,873 Non-GAAP gross margin as a percent of revenues 46.9 % 49.4 % (1) Represents non-recurring expenses related to our new distribution center in Dayton, Ohio.Non-GAAP selling, general and administrative expenses reconciliation:
Three Months Ended March 31, 2019 2018 (in thousands) GAAP revenues $ 295,949 $ 283,148 GAAP selling, general and administrative expenses (1) $ 105,037 $ 113,951 Non-recurring expenses associated with cost reduction initiatives (2) (685 ) (2,499 ) Total adjustments (685 ) (2,499 ) Non-GAAP selling, general and administrative expenses $ 104,352 $ 111,452 GAAP selling, general and administrative expenses as a percent of revenues 35.5 % 40.2 % Non-GAAP selling, general and administrative expenses as a percent of revenues 35.3 % 39.4 % (1) Non-GAAP selling, general and administrative expenses are presented gross of tax. (2) Non-recurring expenses associated with cost reduction initiatives in 2019 and the SG&A reduction plan in 2018. CROCS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES (UNAUDITED) Non-GAAP income from operations and operating margin reconciliation: Three Months Ended March 31, 2019 2018 (in thousands) GAAP income from operations $ 32,578 $ 25,922 Non-GAAP cost of sales adjustments (1) 1,275 — Non-GAAP selling, general and administrative expenses adjustments (2) 685 2,499 Non-GAAP income from operations $ 34,538 $ 28,421 GAAP operating margin 11.0 % 9.2 % Non-GAAP operating margin 11.7 % 10.0 % (1) See 'Non-GAAP cost of sales reconciliation' above for more details. (2) See 'Non-GAAP selling, general and administrative expenses reconciliation' above for more details. CROCS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES (UNAUDITED)Non-GAAP earnings per share reconciliation: (1)
Three Months Ended March 31, 2019 2018 (in thousands, except per share data) Numerator: GAAP net income attributable to common stockholders $ 24,710 $ 12,523 Less: GAAP adjustment for net income allocable to Series A Preferred stockholders — (2,094 ) GAAP remaining net income available to common stockholders- basic and diluted $ 24,710 $ 10,429 GAAP net income attributable to common stockholders $ 24,710 $ 12,523 Preferred share dividends and dividend equivalents (2) — 3,931 Non-GAAP cost of sales adjustments (3) 1,275 — Non-GAAP selling, general and administrative expenses adjustments (4) 685 2,499 Pro forma interest (5) — (1,407 ) Non-GAAP net income attributable to common stockholders $ 26,670 $ 17,546 Denominator: GAAP weighted average common shares outstanding - basic 73,009 68,705 Plus: GAAP dilutive effect of stock options and unvested restricted stock units in both periods and Series A Preferred in 2018 1,866 2,963 GAAP weighted average common shares outstanding - diluted 74,875 71,668 GAAP weighted average common shares outstanding - basic 68,705 Plus: Non-GAAP weighted average converted common shares outstanding adjustment (6) 6,897 Non-GAAP weighted average common shares outstanding - basic (7) 75,602 Plus: Non-GAAP dilutive effect of stock options and unvested restricted stock units (8) 1,719 Non-GAAP weighted average common shares outstanding - diluted (9) 77,321 GAAP net income per common share: Basic $ 0.34 $ 0.15 Diluted $ 0.33 $ 0.15 Non-GAAP net income per common share: Basic (10) $ 0.37 $ 0.23 Diluted (11) $ 0.36 $ 0.23 (1) Non-GAAP earnings per share calculation for the three months ended March 31, 2018 assumes the repurchase and conversion of the Series A Convertible Preferred Stock occurred on December 31, 2017 ("the Conversion"). (2) Adjustment adds back quarterly dividends and dividend equivalents for the Series A Convertible Preferred Stock in calculating non-GAAP net income attributable to common stockholders for the three months ended March 31, 2018. (3) See 'Non-GAAP cost of sales and gross margin reconciliation' above for more information. (4) See 'Non-GAAP selling, general and administrative expenses reconciliation' above for more information. (5) Pro forma interest for the three months ended March 31, 2018 assumes borrowings of $120.0 million were outstanding for all of 2018 at a rate of 4.69% to partially finance the Conversion. Calculation assumes no repayments and no financing fees. (6) Adjustment represents the incremental increase in weighted average common shares outstanding for the three months ended March 31, 2018 resulting from the Conversion. (7) Non-GAAP weighted average common shares outstanding - basic for the three months ended March 31, 2018 assumes the Conversion. (8) Adjustment reflects the dilutive impact of stock options and restricted stock units for the three months ended March 31, 2018. (9) Non-GAAP weighted average common shares outstanding - diluted for the three months ended March 31, 2018 assumes the Conversion. (10) Non-GAAP net income per common share - basic for the three months ended March 31, 2018 assumes the Conversion and the non-GAAP income attributable to common shareholders. (11) Non-GAAP net income per common share - diluted for the three months ended March 31, 2018 assumes the Conversion and the non-GAAP income attributable to common shareholders. CROCS, INC. AND SUBSIDIARIES REVENUES BY SEGMENT (UNAUDITED) Three Months Ended March 31, 2019 2018 % Change Constant Currency % Change (1) (in thousands) Americas: Wholesale $ 71,229 $ 72,674 (2.0 )% (0.3 )% Retail 38,076 34,716 9.7 % 9.8 % E-commerce 19,821 16,440 20.6 % 21.0 % Total Americas 129,126 123,830 4.3 % 5.3 % Asia Pacific: Wholesale 68,950 65,750 4.9 % 10.0 % Retail 13,903 17,614 (21.1 )% (17.7 )% E-commerce 8,194 7,815 4.8 % 9.9 % Total Asia Pacific 91,047 91,179 (0.1 )% 4.6 % EMEA Wholesale 64,491 55,860 15.5 % 26.2 % Retail 5,417 7,176 (24.5 )% (16.1 )% E-commerce 5,816 4,790 21.4 % 32.5 % Total EMEA 75,724 67,826 11.6 % 22.1 % Total segment revenues 295,897 282,835 4.6 % 9.1 % Other businesses 52 313 (83.4 )% (83.1 )% Total consolidated revenues $ 295,949 $ 283,148 4.5 % 9.0 % Total wholesale $ 204,722 $ 194,597 5.2 % 10.6 % Total retail 57,396 59,506 (3.5 )% (1.4 )% Total e-commerce 33,831 29,045 16.5 % 19.9 % Total consolidated revenues $ 295,949 $ 283,148 4.5 % 9.0 % (1) Reflects year over year change as if the current period results were in constant currency, which is a non-GAAP financial measure. See ‘Reconciliation of GAAP Measures to Non-GAAP Measures’ above for more information. (2) In the third quarter of 2018, certain revenues previously reported within the ‘Asia Pacific’ segment were shifted to the ‘EMEA’ segment. The previously reported amounts for wholesale revenues in these regions for the three months ended March 31, 2018 have been revised to conform to the current year presentation. See ‘Impacts on revenue of segment composition change’ table below for more information.Impacts on revenue of segment composition change:
Three Months Ended March 31, 2018 Increase (Decrease) (in thousands) Asia Pacific: Wholesale $ (5,983 ) EMEA: Wholesale 5,983CROCS, INC. AND SUBSIDIARIES RETAIL STORE COUNTS (UNAUDITED)
December 31,2018
OpenedClosed/Transferred
March 31,2019
Type: Outlet stores 195 — 3 192 Retail stores 120 — 6 114 Kiosk/store-in-store 68 — 2 66 Total 383 — 11 372 Operating segment: Americas 168 — 2 166 Asia Pacific 153 — 6 147 EMEA 62 — 3 59 Total 383 — 11 372 CROCS, INC. AND SUBSIDIARIES COMPARABLE RETAIL STORE SALES AND DIRECT TO CONSUMER COMPARABLE STORE SALES (UNAUDITED)Comparable retail sales and direct to consumer sales by operating segment were:
Constant Currency (1) Three Months Ended March 31, 2019 2018 Comparable retail store sales: (2) Americas 12.4 % 10.9 % Asia Pacific (0.4 )% 4.7 % EMEA 9.3 % (2.6 )% Global 8.7 % 7.6 % Constant Currency (1) Three Months Ended March 31, 2019 2018 Direct-to-consumer comparable store sales (includes retail and e-commerce): (2) Americas 15.3 % 13.1 % Asia Pacific 1.9 % 10.4 % EMEA 19.2 % 4.2 % Global 12.2 % 11.2 % (1) Reflects period over period change as if the current period results were in constant currency, which is a non-GAAP financial measure. See ‘Reconciliation of GAAP Measures to Non-GAAP Measures’ above for more information. (2) Comparable store status is determined on a monthly basis. Comparable store sales include the revenues of stores that have been in operation for more than twelve months. Stores in which selling square footage has changed more than 15% as a result of a remodel, expansion, or reduction are excluded until the thirteenth month in which they have comparable prior year sales. Temporarily closed stores are excluded from the comparable store sales calculation during the month of closure. Location closures in excess of three months are excluded until the thirteenth month post re-opening. E-commerce revenues are based on same site sales period over period.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190507005315/en/
Investor Contact:Crocs, Inc.Marisa Jacobs, (303) 848-7322mjacobs@crocs.com
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