Crocs(CROX)2024-05-07 16:04Financial Data and Key Metrics - Consolidated revenues for Q1 2024 were 3.02, significantly ahead of the guidance range of 2.25 [38] - Inventory balance declined by 18% YoY to 744 million, driven by DTC growth of 19% and wholesale growth of 14% [114] - HEYDUDE revenues were 23.36, while HEYDUDE ASPs rose 5% to 12.25-$12.73, driven by Q1 strength [116] - HEYDUDE’s performance is expected to improve sequentially, with sell-in and sell-out trends normalizing by Q4 [101] - Management noted a softening consumer environment, particularly in wholesale, but remains optimistic about long-term growth [35][69] Other Important Information - The company hired Susan Healy as the new CFO, bringing extensive experience from Ulta Beauty and IAA [2][96] - Terence Reilly joined as the new HEYDUDE Brand President, focusing on driving brand relevance and growth [113] - Crocs expanded its corporate responsibility efforts, including the Consumer Takeback program and a new limited edition Classic Clog made from recycled materials [89] Q&A Session Summary Question: HEYDUDE’s performance and outlook [44] - HEYDUDE’s Q1 performance was solid but saw softening wholesale sell-out post-Easter, leading to a more cautious outlook for the year [45][46] - DTC is expected to outperform wholesale, with Q4 being the strongest quarter due to retail contributions and easier wholesale comparisons [46][47] Question: Crocs’ performance in China [129] - Crocs achieved triple-digit growth in China in Q1, driven by digital presence, consumer following, and incremental store openings [7] - The company expects strong growth to continue through Q2 and the rest of the year, supported by new franchise partner stores [7] Question: HEYDUDE’s margin outlook [61] - HEYDUDE’s margin guidance remains unchanged, with no incremental pressure expected from lower revenue, as DTC revenues are higher margin than wholesale [61] - The new HEYDUDE Las Vegas warehouse and technology implementation are expected to improve efficiency and support margins [62] Question: Crocs’ inventory management [55] - Inventory levels are down 18% YoY, with both brands achieving 4 times inventory turns, reflecting efficient inventory management [115] - Management expects inventory levels to flatten in Q2 and remain stable throughout the year [55] Question: HEYDUDE’s direct business performance [74] - HEYDUDE’s direct business saw a drop in units due to higher ASPs, but this was expected and is seen as productive for margins [68] - The company anticipates unit sales to improve as new products and marketing efforts gain traction [68] Question: Crocs’ North America DTC performance [44] - Crocs’ North America DTC grew 13% in Q1, supported by strong product offerings and a robust pipeline [47] - Q2 growth is expected to be more muted due to the Easter shift and leap year impact in Q1 [48]