Q1 2024 Crocs Inc Earnings Call Transcript
Key Points
- Crocs Inc (CROX) reported strong first quarter results, exceeding guidance on both top and bottom lines with a 7% revenue growth.
- Adjusted gross margins improved by 180 basis points to 56%, reflecting efficient cost management and favorable product costs.
- The Crocs brand experienced significant growth, particularly in international markets like China and Australia, with triple-digit growth rates.
- New product launches and collaborations, such as the Toy Story Collection and Simone Rocha collaboration, were highly successful and sold out globally.
- The company is expanding its market share, particularly in North America, and continues to see strong direct-to-consumer channel performance.
- Performance around Easter and into April for the HEYDUDE brand fell short of expectations, with softening sellout rates in wholesale.
- The company has adjusted its outlook for the HEYDUDE brand, expecting a revenue contraction of 10% to 8% for the year, indicating challenges in the wholesale segment.
- Despite strong Q1 results, the company remains cautious about the robustness of the consumer market and has taken a more prudent approach to trends for the balance of the year.
- HEYDUDE's direct-to-consumer channel experienced a decline due to a strategic shift towards less promotional activity and higher average selling prices, impacting unit sales.
- Inventory management remains a challenge, with a need to balance sell-in and sell-out to ensure channel health, particularly for the HEYDUDE brand.
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.
Good morning, and thank you for joining us to discuss Crocs, Inc. first quarter results. With me today are Andrew Rees, Chief Executive Officer; and Anne' Mehlman, Executive Vice President, Croc's Brand President and Chief Financial Officer. Following their prepared remarks, we will open the call for your questions, which we ask that you limit to 1 per caller.
Before we begin, I would like to remind you that some of the information on this call is forward-looking and accordingly, is subject to the safe harbor provisions of the federal securities laws.
These statements include, but are not limited to, statements regarding our strategy, plans, objectives, expectations and intentions, including our financial
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