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 companys first quarter 2013 and 2012 revenues:
  


The following tables detail the companys 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


About The Author

Thomas J. Ryan

Thomas J. Ryan Senior Business Editor | SGB Media tryan@sgbonline.com | 917.375.4699

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