In contrast to the first quarter of 2009, Crocs, Inc. has all but performed a complete turnaround in all channels and regions, exemplified by double-digit growth in both the wholesale and retail businesses, as well the international regions, and a sharp improvement in gross margins that helped CROX turn its frown upside down in swinging to profit for the period.

 

Overall revenues increased 23.7% to $166.9 million for the first quarter, with the Americas region up 8.6% to $72.2 million, Europe up 34.2% to $37.9 million and Asia jumping 40.2% to $54.7 million.  The wholesales business was 26.1% and the retail business was up 23.3%, while the Internet business lagged the other channels, growing 5.1% for the period. 

 

Overall Crocs brand average selling prices grew 8.6% for the quarter to $16.41 per pair as the company saw classic styles like the Beach and Crocs Classic represent just 8.0% of sales in the first quarter versus 20.2% in the 2009 first quarter.  Likewise, Core products shrank to 21.4% of overall sales versus 41.6% of sales in Q1 last year.  The sales increase came from new products that represented 39.2% of sales in Q1 this year versus 0% in the year-ago period.

 

Gross margins surged more than 15 full points to 52.0% of sales versus 36.9% of sales in the year-ago quarter, while a combination of the sales gains and expense controls shrank SG&A expenses by 610 basis points to 44.8% of sales in the period. 

 

CROX swung to net profit of 5.7%, or 7 cents per diluted share, compared to a loss of $22.4 million, or a loss of 27 cents per diluted share, in the year-ago period. 

 

Ocean Minded revenues jumped 75.0% to $2.1 million but Jibbitz revenues dipped 2.0% to $5.0 million for the quarter.

 

The retail business continues to expand as the company added 43 net new locations since the year-ago first quarter, even as the company closed 15 kiosk locations.  The retail store count increased 30 net new doors and outlet stores added 28 net new doors.

 

When asked if the gross margin number was sustainable, company CFO Russ Hammer responded that, “we are projecting our gross margins to recover meaningfully over 2009 and be in the low 50s for the full year.”