Crocs, Inc. Reports 2011 Second Quarter Financial Results
Second Quarter Revenue Increased 29.6% to a Record $295.6 Million
Second Quarter Diluted EPS Increased 64.9% to $0.61
Backlog at June 30, 2011 Increased 42% to $168 Million
– July 27, 2011 – Crocs, Inc. (NASDAQ: CROX) today reported financial results for the second quarter ended June 30, 2011.
Revenue for the second quarter of 2011 increased 29.6% to $295.6 million compared to revenue of $228.0 million reported in the second quarter of 2010. Net income for the second quarter of 2011 increased 71.9% to $55.5 million, or $0.61 per diluted share compared to net income of $32.3 million, or $0.37 per diluted share in the second quarter 2010. The company benefited from modifications in tax treaties in its international businesses which together with other tax planning resulted in an effective tax rate below 15% for the quarter.
John McCarvel, President and Chief Executive Officer, stated: “Our second quarter results demonstrate the progress we have made evolving Crocs into an innovative footwear leader. We achieved our highest quarterly sales and unit volume in the Company’s history as revenues surpassed $295 million and pairs sold topped 14 million. Our performance was fueled by demand for our most diverse product line ever and included double-digit growth in each of our distribution channels and geographic regions. As a result, we experienced significant operating expense leverage and a substantial increase in profitability versus a year ago. Looking ahead to the back half of 2011, we expect our momentum to continue through summer and back to school. We are also optimistic about our prospects for fall and holiday given the 42% increase in our backlog at the end of the second quarter and product pipeline.”
Year-over year second quarter changes in the Company’s channel revenue streams were as follows:
• Wholesale sales increased 25.5% to $175.8 million;
• Retail sales increased 38.1% to $91.8 million;
• Internet sales increased 30.1% to $28.1 million.
Year-over year second quarter changes in the Company’s regional revenue streams were as follows:
• Asia increased 37.5% to $121.9 million;
• Americas increased 16.6% to $121.4 million;
• Europe increased 50.4% to $52.2 million.
Gross profit for the second quarter of 2011 increased 29.0% to $170.2 million, or 57.6% as a percentage of sales, from $131.9 million, or 57.8% of sales in same period last year. Selling, General, & Administrative expenses (including foreign exchange, restructuring, impairment, and charitable contributions) increased 13.1% to $105.4 million versus $93.2 million a year ago. As a percentage of sales, SG&A decreased to 35.7% from 40.9% in the second quarter of 2010.
Cash and cash equivalents at June 30, 2011 increased 85.8% to $180.0 million compared to $96.9 million at June 30, 2010. Inventories at June 30, 2011 were $156.5 million, up from $113.6 million at June 30, 2010. The increase in inventories at June 30, 2011 was primarily attributable to the global growth in wholesale orders, an increase in company-operated retail stores, and an increase in mixture of higher content products and seasonal changes in product mix. The Company ended the second quarter of 2011 with accounts receivable of $115.7 million compared to $94.0 million at June 30, 2010.
For the third quarter of 2011, the Company expects revenue of approximately $280 million, a 30% increase over third quarter 2010. The Company expects diluted earnings per share for the third quarter 2011 to be approximately $0.40.
Conference Call Information
A conference call to discuss Crocs’ second quarter 2011 financial results is scheduled for today (July 27, 2011) at 5:00 PM Eastern Time. A webcast of the call will take place simultaneously and can be accessed by clicking the ‘Investor Relations’ link under the Company section on www.crocs.com or at www.earnings.com. To listen to the broadcast, your computer must have Windows Media Player installed. If you do not have Windows Media Player, go to www.earnings.com prior to the call, where you can download the software for free.
About Crocs, Inc.
A world leader in innovative casual footwear for men, women and children, Crocs, Inc. (NASDAQ: CROX), offers several distinct shoe collections with more than 250 styles to suit every lifestyle. As lighthearted as they are lightweight, Crocs(TM) footwear provides profound comfort and support for any occasion and every season. All Crocs(TM) branded shoes feature Croslite(TM) material, a proprietary, revolutionary technology that produces soft, non-marking, and odor-resistant shoes that conform to your feet.
Crocs(TM) products are sold in 90 countries. Every day, millions of Crocs(TM) shoe lovers around the world enjoy the exceptional form, function, versatility and feel-good qualities of these shoes while at work,school and play.
Visit www.crocs.com for additional information.