Crocs, a world leader in innovative casual footwear for women, men, and children, today announced its fourth quarter and full year 2022 financial results.
Andrew Rees, Chief Executive Officer said: “Consumer demand for the Crocs and HEYDUDE brands has been exceptional, fueling record 2022 revenues for both brands at a combined $3.6 billion and top-tier adjusted operating margin of 28%,” he continued. “We anticipate another record year in 2023 with growth expected to be led by sandals and international for the Crocs Brand and increased US market penetration for HEYDUDE.”
“Crocs, Inc. has industry-leading operating margins and generates robust cash flow as a result of the simplicity of our product lines and the high penetration of molded product. Post the acquisition of HEYDUDE, we reduced outstanding debt by $550 million and gross leverage to 2.25 times,” said Anne Mehlman, Executive Vice President and Chief Financial Officer. “We remain confident in gross leverage being below 2.0 times by the middle of this year giving us greater flexibility with capital allocation.”
2022 Brand Summary
- Crocs Brand: Revenues increased 14.9%, or 19.4% on a constant currency basis, to $2,659.1 million. Wholesale revenues increased 17.3%, or 23.4% on a constant currency basis. DTC revenues rose 12.5%, or 15.3% on a constant currency basis.
- North America: Revenues of $1,644.6 million increased 6.0% on a constant currency basis. DTC comparable sales were 11.5%.
- Asia Pacific: Revenues of $473.9 million increased 47.0% on a constant currency basis. DTC comparable sales were 27.0%.
- Europe, Middle East, Africa, and Latin America (“EMEALA”): Revenues of $540.5 million increased 46.8% on a constant currency basis. DTC comparable sales were 32.0%.
- HEYDUDE Brand: Revenues were $895.9 million for the period following the closing of the acquisition on February 17, 2022 with wholesale revenues of $574.1 million and DTC revenues of $321.7 million. Including the period prior to the acquisition, revenues were $986.2 million.
First Quarter 2023
With respect to the first quarter of 2023, we expect:
- Revenues to grow approximately 27% to 30% compared to first quarter 2022 revenues of $660.1 million.
- Adjusted operating margin of approximately 24% to 25%.
- Adjusted diluted earnings per share of $2.06 to $2.19.
Full Year 2023
With respect to 2023, we expect:
- Revenue growth of 10% to 13% compared to 2022, resulting in full year revenues of approximately $3.9 billion to $4.0 billion at current currency rates.
- Revenues for the Crocs Brand to grow 6% to 8% and 9% to 11% in constant currency.
- Revenues for the HEYDUDE Brand to grow mid-20% on a reported basis.
- Adjusted operating margin to be approximately 26.0%.
- Non-GAAP adjustments of approximately $30 million to be primarily related to capital investments to support growth and to be fairly balanced across COGS and SG&A.
- Combined GAAP tax rate of approximately 24% and Non-GAAP effective tax rate of approximately 20%.
- Adjusted diluted earnings per share of $11.00 to $11.31.
- Capital expenditures of approximately $165 to $180 million, primarily related to the expansion of our distribution capabilities including our new HEYDUDE distribution center in Las Vegas opening later this year, implementation of new technology systems for HEYDUDE and expansion of our corporate facilities to support growth.