Q2 2024 Crocs Inc Earnings Call Transcript
Key Points
- Crocs Inc (CROX) reported second quarter revenue of over $1.1 billion, the highest in the company's history, exceeding guidance.
- Adjusted gross margin expanded by 330 basis points to 61.4%, and adjusted earnings per share grew by 12% to $4.01.
- Record free cash flow enabled the company to pay down $200 million in debt and repurchase $175 million of common stock.
- International revenue grew 22% year-over-year, with exceptional growth in China (over 70%) and Australia.
- The sandal category strengthened, with new styles like the Getaway and Miami performing well, contributing to overall growth.
- HEYDUDE brand revenues were down 17.5% year-over-year, with wholesale revenues down 24% and DTC channel down 8%.
- The North American market showed cautious consumer behavior, leading to a flat revenue outlook for the second half of the year.
- Increased SG&A expenses by 19% year-over-year, driven by investments in talent, marketing, and DTC, impacting operating margins.
- HEYDUDE's wholesale business remains challenging, with expectations of continued difficulties in the second half of the year.
- The company anticipates a more promotional market environment, which could impact margins and overall profitability.
For 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 outlook. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to differ materially.
Please refer to our quarterly report on Form 10-Q and other reports filed with the SEC for more information on these risks and uncertainties.
Certain financial metrics that we refer to as adjusted or non-GAAP are non-GAAP measures. A reconciliation of these amounts to their GAAP counterparts is contained in the press release we issued earlier this morning. All revenue growth rates will be cited on a constant currency basis, unless otherwise stated at this time,
I'll turn the call over to Andrew Rees, Crocs, Inc. Chief Executive Officer.
Thank you, Erinn, and
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