Crocs, Inc. reported revenue for the second quarter of 2012 increased 12.0 percent to $330.9 million, over revenue of $295.6 million reported in the second quarter of 2011. Net income for the second quarter 2012 was $61.5 million, or 68 cents per diluted share, compared to net income of $55.5 million, or 61 cents per diluted share, in the second quarter of 2011.
Sales growth during the quarter was driven by Asia and Americas which was partially offset by a modest decrease in Europe. Geographically, revenue increased 10.9 percent for the Americas, increased 20.5 percent for Asia and decreased 5.2 percent for Europe.
From a channel perspective, wholesale sales increased 7.3 percent to $188.5 million, over sales of $175.8 million in the second quarter of 2011. Retail sales increased 22.6 percent to $112.5 million, over sales of $91.8 million in the second quarter of 2011. The company ended the quarter with 484 retail store locations, which compares to 397 locations a year ago. Global same store sales for the second quarter of 2012 increased 1.8 percent on a currency neutral basis. Internet sales increased 6.6 percent to $29.9 million, over sales of $28.1 million in the second quarter of 2011.
John McCarvel, President and Chief Executive Officer, stated: “We're pleased with our ability to deliver profitability that exceeded our second quarter projections despite some challenges in certain areas of our business. Conditions in Europe, including currency headwinds, and slower than expected retail sales in the Americas resulted in slightly lower growth than expected. We are very encouraged by continued strong growth of Asia, sell through of our products in key wholesale accounts, our international retail performance, all driven by customer enthusiasm for our new products.”
Margins
Gross profit for the second quarter of 2012 increased 15.2 percent to $196.1 million, or 59.3 percent as a percentage of sales, from $170.2 million, or 57.6 percent as a percentage of sales in the same period last year. Selling, General, & Administrative expenses (SG&A) increased 15.0 percent to $124.7 million versus $108.5 million a year ago. As a percentage of sales, SG&A was 37.7 percent compared to 36.7 percent in the second quarter of 2011.
Balance Sheet
Cash and cash equivalents at June 30, 2012 increased 54.9 percent to $278.8 million compared to $180.0 million at June 30, 2011. Inventories at June 30, 2012 were $166.0 million, up 6.1 percent compared to inventories at June 30, 2011 of $156.5 million.
Backlog
Backlog at June 30, 2012 increased 2.7 percent to $172.6 million compared to backlog of $168.1 million at June 30, 2011. On a constant currency basis, backlog is up approximately 6 percent over 2011.
Guidance
For the third quarter of 2012, the Company expects revenue of $300 million and diluted earnings per share to be between $0.42 and $0.44.
John McCarvel, continued: “Based on our year to date results, the increasing count of retail stores and the strength of our wholesale business, we are projecting that we will finish 2012 with US dollar revenue growth of about 14 percent over 2011, which on a constant currency growth represents 17.5 percent, inline with our previous guidance. For the first half of the year, we earned $0.99 per diluted share and we now project earnings to be between $1.50 and $1.54 per diluted share for the full year. We believe the diversification in our business model, global presence and product breadth provides the platform for continued sales growth and earnings expansion.”
CROCS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
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($ thousands, except per share data) 2012 2011 2012 2011
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Revenues $ 330,942 $ 295,585 $ 602,740 $ 522,293
Cost of sales 134,857 125,367 261,856 232,869
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Gross profit 196,085 170,218 340,884 289,424
Selling, general and administrative expenses 124,718 108,486 229,009 198,097
Asset impairment 106 - 819 32
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Income (loss) from operations 71,261 61,732 111,056 91,295
Foreign currency transaction (gains) losses, net (1,627) (2,623) 2,649 (1,252)
Other (income) expense, net (1,069) (664) (1,668) (649)
Interest expense 132 241 179 429
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Income (loss) before income taxes 73,825 64,778 109,896 92,767
Income tax expense (benefit) 12,301 9,272 20,026 15,757
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Net income (loss) $ 61,524 $ 55,506 $ 89,870 $ 77,010
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Net income (loss) per common share:
Basic $ 0.68 $ 0.62 $ 1.00 $ 0.87
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Diluted $ 0.68 $ 0.61 $ 0.99 $ 0.85
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