Crocs (CROX) Reaffirms Q3 and FY Guidance

Crocs, Inc. (NASDAQ: CROX), a world leader in innovative casual footwear for men, women and children, today reiterated its guidance for the third quarter and full year ended December 31, 2018 in anticipation of its presentation at the Goldman Sachs 25th Annual Global Retailing Conference.

Andrew Rees, President and Chief Executive Officer, said, “It’s been a good summer, and the momentum we saw throughout June and July has continued as back to school shopping escalated. Our clogs and sandals, in particular, continue to be in demand. We are well positioned for the balance of the year, and are reiterating our previously issued third quarter and full year 2018 guidance.”

Third Quarter 2018:

With respect to the third quarter of 2018, the Company continues to expect:

• Revenues of $240 to $250 million compared to $243.3 million in the third quarter of 2017.
• Gross margin to be approximately 50 basis points above last year’s 50.8% rate.
• SG&A to be slightly higher than last year’s third quarter SG&A of $120.8 million. This includes non-recurring charges of approximately $6 million, compared to $3.6 million in the third quarter of 2017. These non-recurring charges consist of approximately $5 million relating to the closure of our manufacturing facilities, approximately $4 million of which will be non-cash, and approximately $1 million associated with our SG&A reduction plan.

Full Year 2018:

With respect to 2018, the Company continues to expect:

• Revenues to increase low single digits over 2017 revenues of $1,023.5 million, as we expect double digit e-commerce growth and moderate wholesale growth to more than offset lower retail revenues due to operating fewer stores and business model changes.
• Gross margin to increase approximately 70 to 100 basis points over 2017 gross margin of 50.5%.
• SG&A to be slightly higher than our prior guidance of $485 million, compared to $499.9 million last year. This includes approximately $18 million of non-recurring charges, compared to our prior guidance of approximately $15 million, and $17 million of non-recurring charges in 2017. These non-recurring charges consist of approximately $14 million relating to the closure of our manufacturing facilities, approximately $8 million of which will be non-cash, and approximately $4 million associated with our SG&A reduction plan.
• Income from operations to be approximately $50 million compared to $17.3 million in 2017.
• Depreciation and amortization to be approximately $30 million compared to $33.1 million in 2017.
• Income tax expense of approximately $17 million compared to $7.9 million in 2017.

Goldman Sachs 25th Annual Global Retailing Conference

Crocs, Inc. will be presenting at the Goldman Sachs 25th Annual Global Retailing Conference on Wednesday, September 5, 2018 at 11:15 am EST. The presentation will be webcast live and can be accessed on the Crocs website, www.crocs.com, and will remain available through March 5, 2019. The conference is being held at the Plaza Hotel in New York, New York.

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