Business news : Crocs Revenues Climb Double-Digits

Crocs Inc. reported first-quarter revenues rose 14.7 percent to $311.7 million. Excluding charges related to a software systems upgrade, earnings gained 8.8 percent. By region in its wholesale business, revenues in Asia Pacific grew 35.1 percent and Americas gained 19.2 percent, offsetting a 5.8 percent decline in Europe.

First Quarter 2013 Highlights

•     Record revenue of $311.7 million
•     Gross Margin of 53.2 percent
•     Net income of $29.0 million
•     Earnings per diluted share of $0.33

“Our record revenue performance in the first quarter of 2013 demonstrates the benefit of innovative products, the success of our multi channel strategy and the global reach of our business. During the quarter we saw strong sell-in of our spring and summer line into our wholesale accounts globally and solid initial sell-through in our own retail channel, all of which contributed to a 17 percent constant currency revenue growth during the quarter,” said John McCarvel, President and Chief Executive Officer. “As we look into the core of the spring summer selling season, we are confident that our product line-up, including a combination of new collections and core products will continue to drive revenues forward.

“The Asia Pacific segment of our business was a key component of our success during the quarter. While weather did impact consumers in North America and Europe, and Europe also dealt with ongoing macro-economic issues, we did see early signs of recovery in Japan.”

First Quarter Results

For first quarter 2013, the company had a net income of $29.0 million or $0.33 per diluted share, compared with net income of $28.3 million or $0.31 per diluted share in the prior year period. First quarter 2013 results included total expenses of $1.8 million relating to the implementation of a new ERP system including non-cash accelerated depreciation and cash expenses for program management, training and other non-capitalized costs. Adjusting for these non-operating items, the company had Non-GAAP net income1 of $30.8 million in the quarter or $0.35 per diluted share.

Revenue for the first quarter of 2013 increased 14.7 percent to $311.7 million compared with revenue of $271.8 million reported in the first quarter of 2012. On a constant currency basis revenue increased 16.6 percent for the first quarter of 2013.

Margins

Gross profit for the first quarter of 2013 increased 14.5 percent to $165.8 million, or 53.2 percent as a percentage of sales, compared with $144.8 million, or 53.3 percent as a percentage of sales in the prior year period. Selling, General, & Administrative expenses (SG&A) increased 22.9 percent to $128.2 million compared with $104.3 million a year ago. As a percentage of sales, SG&A increased to 41.1 percent from 38.4 percent compared with the first quarter of 2012. The increase in SG&A is largely attributable to our year-over-year increase in retail stores and partially attributable to our previously announced increase in marketing spending in 2013, which totaled approximately $2.7 million during the quarter.

First Quarter Revenue Results

Crocs Inc. reported first-quarter revenues rose 14.7 percent to $311.7 million. Excluding charges related to a software systems upgrade, earnings gained 8.8 percent. By region in its wholesale business, revenues in Asia Pacific grew 35.1 percent and Americas gained 19.2 percent, offsetting a 5.8 percent decline in Europe.

The following tables detail the company’s first quarter 2013 and 2012 revenues:
  

The following tables detail the company’s first quarter 2013 and 2012 revenues:

	Three Months Ended March 31,						Change							Constant Currency Change(1)
($ thousands)		2013			2012			$				%			$				%
Channel revenues:
Wholesale:
Americas		$	81,604		$	69,056		$	12,548			18.2	%		$	13,287			19.2	%
Asia Pacific			69,554			51,052			18,502			36.2				17,942			35.1
Japan			22,527			27,843			(5,316	)		(19.1	)			(1,610	)		(5.8	)
Europe			46,533			42,616			3,917			9.2				4,080			9.6
Other businesses			65			125			(60	)		(48.0	)			(61	)		(48.8	)
Total Wholesale			220,283			190,692			29,591			15.5				33,638			17.6
Consumer-direct:
Retail:
Americas			35,904			35,546			358			1.0				555			1.6
Asia Pacific			19,597			15,739			3,858			24.5				3,807			24.2
Japan			5,901			4,842			1,059			21.9				2,002			41.3
Europe			9,689			4,445			5,244			118.0				5,143			115.7
Total Retail			71,091			60,572			10,519			17.4				11,507			19.0
Internet:
Americas			11,921			12,705			(784	)		(6.2	)			(744	)		(5.9	)
Asia Pacific			1,306			860			446			51.9				442			51.4
Japan			1,931			1,688			243			14.4				561			33.2
Europe			5,124			5,281			(157	)		(3.0	)			(173	)		(3.3	)
Total Internet			20,282			20,534			(252	)		(1.2	)			86			0.4
Total revenues:		$	311,656		$	271,798		$	39,858			14.7	%		$	45,231			16.6	%
		Three Months Ended March 31,						Change							Constant Currency Change(1)
($ thousands)		2013			2012			$				%			$				%
Regional Revenue:
Americas		$	129,429		$	117,307		$	12,122			10.3	%		$	13,098			11.2	%
Asia Pacific			90,457			67,651			22,806			33.7				22,191			32.8
Japan			30,359			34,373			(4,014	)		(11.7	)			953			2.8
Europe			61,346			52,342			9,004			17.2				9,050			17.3
Other businesses			65			125			(60	)		(48.0	)			(61	)		(48.8	)
Total Revenues		$	311,656		$	271,798		$	39,858			14.7	%		$	45,231			16.6	%

(1) Current period results have been restated using 2012 average foreign exchange rates for the comparative period to enhance the visibility of the underlying business trends excluding the impact of foreign currency exchange rate fluctuations.

Other Financial Information

Comparable Store Sales Results

Comparable store sales on a constant currency basis for the first quarter of 2013 compared to the first quarter 2012 were as follows: Global decreased 5.2 percent, Americas decreased 10.3 percent, Asia Pacific increased 7.3 percent, Japan decreased 5.8 percent and Europe decreased 7.3 percent. John McCarvel continued “while the unfavorable weather patterns in North America and Europe impacted our same store sales in the first quarter, we were pleased to see the early season success in Asia and the nascent signs of recovery in Japan. The first quarter on average represents just over 15 percent of retail sales for the year, therefore we remain confident that we can achieve modest year-over-year comparable store sales growth similar to 2012 growth rates.”

Balance Sheet

Cash and cash equivalents at March 31, 2013 decreased 21.0 percent compared with year end 2012 and increased 12.6 percent compared with March 31, 2012. During the first quarter of 2012 we repurchased approximately 834,000 shares of common stock for an aggregate of approximately $12.5 million in cash. Inventories at March 31, 2013 were $177.8 million, up 7.9 percent compared with year end 2012 and up 5.2 percent compared with inventories at March 31, 2012.

Backlog

Backlog at March 31, 2013 was $292.9 million, up 1.5 percent compared with $288.7 in the prior year period. On a constant currency basis backlog at March 31, 2013 was up 5.0 percent compared to the prior year period.

Financial Outlook

For the second quarter of 2013, the company expects revenue between $360 million and $370 million and diluted earnings per share between $0.60 and $0.63. This outlook includes $(0.02) per share of ERP implementation expense and reflects an impact of $(0.04) for currency translation.

Source Crocs Inc


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