Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2024 | Jul. 25, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 000-51754 | |
Entity Registrant Name | CROCS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-2164234 | |
Entity Address, Address Line One | 500 Eldorado Blvd., Building 5 | |
Entity Address, City or Town | Broomfield | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80021 | |
City Area Code | 303 | |
Local Phone Number | 848-7000 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | CROX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 59,385,132 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2024 | |
Entity Central Index Key | 0001334036 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Statement [Abstract] | ||||
Revenues | $ 1,111,502 | $ 1,072,367 | $ 2,050,135 | $ 1,956,533 |
Cost of sales | 429,586 | 451,060 | 846,142 | 858,856 |
Gross profit | 681,916 | 621,307 | 1,203,993 | 1,097,677 |
Selling, general and administrative expenses | 356,178 | 302,818 | 651,826 | 544,260 |
Income from operations | 325,738 | 318,489 | 552,167 | 553,417 |
Foreign currency gains (losses), net | (1,323) | 551 | (3,596) | 148 |
Interest income | 1,126 | 548 | 1,542 | 719 |
Interest expense | (29,161) | (43,063) | (59,724) | (85,700) |
Other income, net | 45 | 717 | 65 | 424 |
Income before income taxes | 296,425 | 277,242 | 490,454 | 469,008 |
Income tax expense | 67,518 | 64,830 | 109,093 | 107,053 |
Net income | $ 228,907 | $ 212,412 | $ 381,361 | $ 361,955 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 3.79 | $ 3.42 | $ 6.31 | $ 5.84 |
Diluted (in dollars per share) | $ 3.77 | $ 3.39 | $ 6.26 | $ 5.78 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 60,320 | 62,037 | 60,442 | 61,937 |
Diluted (in shares) | 60,766 | 62,603 | 60,910 | 62,616 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 228,907 | $ 212,412 | $ 381,361 | $ 361,955 |
Derivatives designated as hedging instruments: | ||||
Unrealized gains (losses) on derivative instruments | 269 | 223 | 694 | (156) |
Reclassification adjustment for realized (gains) losses on derivative instruments | (256) | 217 | (426) | 600 |
Net increase from derivatives designated as hedging instruments | 13 | 440 | 268 | 444 |
Foreign currency translation gains (losses), net | (6,419) | 1,190 | (17,831) | 5,143 |
Total comprehensive income, net of tax | $ 222,501 | $ 214,042 | $ 363,798 | $ 367,542 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 167,734 | $ 149,288 |
Restricted cash - current | 2 | 2 |
Accounts receivable, net of allowances of $34,899 and $27,591, respectively | 420,199 | 305,747 |
Inventories | 376,599 | 385,054 |
Income taxes receivable | 2,502 | 4,413 |
Other receivables | 20,282 | 21,071 |
Prepaid expenses and other assets | 39,586 | 45,129 |
Total current assets | 1,026,904 | 910,704 |
Property and equipment, net of accumulated depreciation of $133,215 and $120,510, respectively | 244,067 | 238,315 |
Intangible assets, net of accumulated amortization of $150,026 and $138,611, respectively | 1,785,303 | 1,792,562 |
Goodwill | 711,542 | 711,588 |
Deferred tax assets, net | 640,587 | 667,972 |
Restricted cash | 3,292 | 3,807 |
Right-of-use assets | 292,089 | 287,440 |
Other assets | 16,014 | 31,446 |
Total assets | 4,719,798 | 4,643,834 |
Current liabilities: | ||
Accounts payable | 244,853 | 260,978 |
Accrued expenses and other liabilities | 285,095 | 285,771 |
Income taxes payable | 92,550 | 65,952 |
Current borrowings | 0 | 23,328 |
Current operating lease liabilities | 63,918 | 62,267 |
Total current liabilities | 686,416 | 698,296 |
Deferred tax liabilities, net | 12,841 | 12,912 |
Long-term income taxes payable | 557,581 | 565,171 |
Long-term borrowings | 1,529,566 | 1,640,996 |
Long-term operating lease liabilities | 277,112 | 269,769 |
Other liabilities | 3,071 | 2,767 |
Total liabilities | 3,066,587 | 3,189,911 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, par value $0.001 per share, 250.0 million shares authorized, 110.3 million and 110.1 million issued, 59.6 million and 60.5 million outstanding, respectively | 110 | 110 |
Treasury stock, at cost, 50.8 million and 49.6 million shares, respectively | (2,071,289) | (1,888,869) |
Additional paid-in capital | 844,595 | 826,685 |
Retained earnings | 2,993,126 | 2,611,765 |
Accumulated other comprehensive loss | (113,331) | (95,768) |
Total stockholders’ equity | 1,653,211 | 1,453,923 |
Total liabilities and stockholders’ equity | $ 4,719,798 | $ 4,643,834 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, net of allowance | $ 34,899 | $ 27,591 |
Accumulated depreciation | 133,215 | 120,510 |
Intangible assets, net of accumulated amortization | $ 150,026 | $ 138,611 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock issued (in shares) | 110,300,000 | 110,100,000 |
Common stock outstanding (in shares) | 59,600,000 | 60,500,000 |
Treasury stock (in shares) | 50,800,000 | 49,600,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2022 | 61,749,000 | |||||
Beginning balance at Dec. 31, 2022 | $ 817,931 | $ 110 | $ (1,695,501) | $ 797,614 | $ 1,819,199 | $ (103,491) |
Beginning balance (in shares) at Dec. 31, 2022 | 47,730,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 15,852 | 15,852 | ||||
Exercises of stock options, issuance of restricted stock awards, and vests of restricted stock units, net of shares withheld for taxes (in shares) | 318,000 | 95,000 | ||||
Exercises of stock options, issuance of restricted stock awards, and vests of restricted stock units, net of shares withheld for taxes | (11,635) | $ (11,635) | ||||
Repurchases of common stock, including excise tax (in shares) | 0 | |||||
Net income | 361,955 | 361,955 | ||||
Other comprehensive (loss) income | 5,587 | 5,587 | ||||
Ending balance (in shares) at Jun. 30, 2023 | 62,067,000 | |||||
Ending balance at Jun. 30, 2023 | 1,189,690 | $ 110 | $ (1,707,136) | 813,466 | 2,181,154 | (97,904) |
Ending balance (in shares) at Jun. 30, 2023 | 47,825,000 | |||||
Beginning balance (in shares) at Mar. 31, 2023 | 62,023,000 | |||||
Beginning balance at Mar. 31, 2023 | 968,500 | $ 110 | $ (1,705,896) | 805,078 | 1,968,742 | (99,534) |
Beginning balance (in shares) at Mar. 31, 2023 | 47,813,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 8,388 | 8,388 | ||||
Exercises of stock options, issuance of restricted stock awards, and vests of restricted stock units, net of shares withheld for taxes (in shares) | 44,000 | 12,000 | ||||
Exercises of stock options, issuance of restricted stock awards, and vests of restricted stock units, net of shares withheld for taxes | (1,240) | $ (1,240) | ||||
Repurchases of common stock, including excise tax (in shares) | 0 | |||||
Net income | 212,412 | 212,412 | ||||
Other comprehensive (loss) income | 1,630 | 1,630 | ||||
Ending balance (in shares) at Jun. 30, 2023 | 62,067,000 | |||||
Ending balance at Jun. 30, 2023 | $ 1,189,690 | $ 110 | $ (1,707,136) | 813,466 | 2,181,154 | (97,904) |
Ending balance (in shares) at Jun. 30, 2023 | 47,825,000 | |||||
Beginning balance (in shares) at Dec. 31, 2023 | 60,500,000 | 60,495,000 | ||||
Beginning balance at Dec. 31, 2023 | $ 1,453,923 | $ 110 | $ (1,888,869) | 826,685 | 2,611,765 | (95,768) |
Beginning balance (in shares) at Dec. 31, 2023 | 49,600,000 | 49,558,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | $ 17,744 | 17,744 | ||||
Exercises of stock options, issuance of restricted stock awards, and vests of restricted stock units, net of shares withheld for taxes (in shares) | 227,000 | 47,000 | ||||
Exercises of stock options, issuance of restricted stock awards, and vests of restricted stock units, net of shares withheld for taxes | (5,747) | $ (5,913) | 166 | |||
Repurchases of common stock, including excise tax (in shares) | (1,170,000) | (1,170,000) | ||||
Repurchases of common stock, including excise tax | (176,507) | $ (175,000) | $ (176,507) | |||
Net income | 381,361 | 381,361 | ||||
Other comprehensive (loss) income | $ (17,563) | (17,563) | ||||
Ending balance (in shares) at Jun. 30, 2024 | 59,600,000 | 59,552,000 | ||||
Ending balance at Jun. 30, 2024 | $ 1,653,211 | $ 110 | $ (2,071,289) | 844,595 | 2,993,126 | (113,331) |
Ending balance (in shares) at Jun. 30, 2024 | 50,800,000 | 50,775,000 | ||||
Beginning balance (in shares) at Mar. 31, 2024 | 60,696,000 | |||||
Beginning balance at Mar. 31, 2024 | $ 1,597,055 | $ 110 | $ (1,894,782) | 834,433 | 2,764,219 | (106,925) |
Beginning balance (in shares) at Mar. 31, 2024 | 49,605,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 10,162 | 10,162 | ||||
Exercises of stock options, issuance of restricted stock awards, and vests of restricted stock units, net of shares withheld for taxes (in shares) | 26,000 | |||||
Repurchases of common stock, including excise tax (in shares) | (1,170,000) | (1,170,000) | ||||
Repurchases of common stock, including excise tax | (176,507) | $ (175,000) | $ (176,507) | |||
Net income | 228,907 | 228,907 | ||||
Other comprehensive (loss) income | $ (6,406) | (6,406) | ||||
Ending balance (in shares) at Jun. 30, 2024 | 59,600,000 | 59,552,000 | ||||
Ending balance at Jun. 30, 2024 | $ 1,653,211 | $ 110 | $ (2,071,289) | $ 844,595 | $ 2,993,126 | $ (113,331) |
Ending balance (in shares) at Jun. 30, 2024 | 50,800,000 | 50,775,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities: | ||
Net income | $ 381,361 | $ 361,955 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 33,705 | 25,780 |
Operating lease cost | 40,654 | 36,592 |
Share-based compensation | 17,744 | 15,852 |
Asset impairment | 24,081 | 0 |
Other non-cash items | 18,517 | 769 |
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities: | ||
Accounts receivable | (119,159) | (113,838) |
Inventories | 5,172 | 34,884 |
Prepaid expenses and other assets | 2,247 | (32,413) |
Accounts payable, accrued expenses and other liabilities | (19,034) | 27,819 |
Right-of-use assets and operating lease liabilities | (42,069) | (35,176) |
Income taxes | 30,443 | 8,389 |
Cash provided by operating activities | 373,662 | 330,613 |
Cash flows from investing activities: | ||
Purchases of property, equipment, and software | (32,806) | (51,645) |
Cash used in investing activities | (32,806) | (51,645) |
Cash flows from financing activities: | ||
Proceeds from borrowings | 78,156 | 214,634 |
Repayments of borrowings | (216,405) | (513,703) |
Deferred debt issuance costs | (1,173) | (612) |
Repurchases of common stock | (175,011) | 0 |
Repurchases of common stock for tax withholding | (5,913) | (11,636) |
Other | 168 | 0 |
Cash used in financing activities | (320,178) | (311,317) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (2,747) | 7,049 |
Net change in cash, cash equivalents, and restricted cash | 17,931 | (25,300) |
Cash, cash equivalents, and restricted cash—beginning of period | 153,097 | 194,885 |
Cash, cash equivalents, and restricted cash—end of period | $ 171,028 | $ 169,585 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Unless otherwise noted in this report, any description of the “Company,” “we,” “us,” or “our” includes Crocs, Inc. and our consolidated subsidiaries within our reportable operating segments and corporate operations. We are engaged in the design, development, worldwide marketing, distribution, and sale of casual lifestyle footwear and accessories for all. We strive to be the global leader in the sale of casual footwear characterized by functionality, comfort, color, and lightweight design. Our reportable operating segments include: (i) the Crocs Brand and (ii) the HEYDUDE Brand. See Note 13 — Operating Segments and Geographic Information for additional information. The accompanying unaudited condensed consolidated interim financial statements include our accounts and those of our wholly-owned subsidiaries and reflect all adjustments which are necessary for a fair statement of the financial position, results of operations, and cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Such unaudited condensed consolidated interim financial statements have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The year-end condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. These unaudited condensed consolidated interim financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2023 (“Annual Report”) and have been prepared on a consistent basis with the accounting policies described in Note 1 of the Notes to Consolidated Financial Statements included in our Annual Report. Our accounting policies did not change during the six months ended June 30, 2024, other than with respect to the new accounting pronouncements adopted, as applicable, as described in Note 2 — Recent Accounting Pronouncements. Reclassifications We have reclassified certain amounts in Note 3 — Accrued Expenses and Other Liabilities, Note 9 — Revenues, and Note 13 — Operating Segments and Geographic Information to conform to current period presentation. Use of Estimates U.S. GAAP requires us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions used to determine certain amounts that affect the financial statements are reasonable, based on information available at the time they are made. Management believes that the estimates, judgments, and assumptions made when accounting for items and matters such as, but not limited to, the allowance for doubtful accounts, customer rebates, sales returns and allowances, impairment assessments and charges, recoverability of long-lived assets, deferred tax assets, valuation allowances, uncertain tax positions, income tax expense, share-based compensation expense, the assessment of lower of cost or net realizable value on inventory, useful lives assigned to long-lived assets, goodwill, and indefinite-lived intangible assets are reasonable based on information available at the time they are made. To the extent there are differences between these estimates and actual results, our condensed consolidated financial statements may be materially affected. Condensed Consolidated Statements of Cash Flows - Supplemental Disclosures Six Months Ended June 30, 2024 2023 (in thousands) Cash paid for interest $ 54,708 $ 81,354 Cash paid for income taxes 71,829 102,107 Cash paid for operating leases 43,226 35,259 Non-Cash Investing and Financing Activities: Right-of-use assets obtained in exchange for operating lease liabilities, net of terminations $ 50,423 $ 19,062 Accrued purchases of property, equipment, and software 9,589 20,657 |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS New Accounting Pronouncement Not Yet Adopted Pillar Two Global Minimum Tax The Organization for Economic Co-operation and Development (“OECD”) has released Pillar Two model rules introducing a 15% global minimum tax rate for large multinational corporations to be effective starting with tax periods ending in 2024. Various jurisdictions we operate in have enacted or plan to enact legislation beginning in 2024 or in subsequent years. There remains uncertainty as to the final Pillar Two rules as the OECD continues to release guidance and modifications to the rules. We do not anticipate the Pillar Two rules will have a material impact on our 2024 consolidated financial statements. Income Taxes: Improvements to Income Tax Disclosure In December 2023, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance related to the disclosure of rate reconciliation and income taxes paid. This guidance becomes effective for annual periods beginning after December 15, 2024 with early adoption permitted and should be applied on a prospective basis. We do not expect this standard to have a material impact on our consolidated financial statements, but it will require increased disclosures within the notes to our consolidated financial statements. Segment Reporting: Improvements to Reportable Segment Disclosures In November 2023, the FASB issued authoritative guidance related to the segment disclosures. This guidance becomes effective for annual periods beginning after December 15, 2023 and interim periods beginning after December 15, 2024, with early adoption permitted and should be applied on a retrospective basis. We do not expect this standard to have a material impact on our consolidated financial statements, but it will require increased disclosures within the notes to our consolidated financial statements. Other new pronouncements issued but not effective until after June 30, 2024 are not expected to have a material impact on our condensed consolidated financial statements. |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 6 Months Ended |
Jun. 30, 2024 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | ACCRUED EXPENSES AND OTHER LIABILITIES Amounts reported in ‘Accrued expenses and other liabilities’ in the condensed consolidated balance sheets were: June 30, 2024 December 31, 2023 (in thousands) Professional services $ 69,584 $ 80,986 Accrued compensation and benefits 48,883 70,245 Return liabilities 33,179 38,644 Sales/use and value added taxes payable 30,478 23,768 Fulfillment, freight, and duties 35,042 22,269 Royalties payable (1) 10,492 10,097 Accrued rent and occupancy 10,699 8,246 Customer deposit liability and deferred revenue (1) 10,182 7,568 Accrued legal fees 6,198 2,546 Other (1) 30,358 21,402 Total accrued expenses and other liabilities $ 285,095 $ 285,771 (1) Amounts as of December 31, 2023 have been reclassified to conform to current period presentation. |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
LEASES | LEASES Right-of-Use Assets and Operating Lease Liabilities Amounts reported in the condensed consolidated balance sheets were: June 30, 2024 December 31, 2023 (in thousands) Assets: Right-of-use assets $ 292,089 $ 287,440 Liabilities: Current operating lease liabilities $ 63,918 $ 62,267 Long-term operating lease liabilities 277,112 269,769 Total operating lease liabilities $ 341,030 $ 332,036 Lease Costs and Other Information Lease-related costs reported within ‘Cost of sales’ and ‘Selling, general and administrative expenses’ in our condensed consolidated statements of income were: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands) Operating lease cost $ 20,409 $ 18,393 $ 40,654 $ 36,592 Short-term lease cost 5,214 4,192 10,013 7,234 Variable lease cost 15,944 14,570 23,307 20,118 Total lease costs $ 41,567 $ 37,155 $ 73,974 $ 63,944 The weighted average remaining lease term and discount rate related to our lease liabilities as of June 30, 2024 were 6.6 years and 6.3%, respectively. As of June 30, 2023, the weighted average remaining lease term and discount rate related to our lease liabilities were 6.6 years and 4.1%, respectively. During the six months ended June 30, 2024, we impaired our right-of-use assets for our former HEYDUDE Brand warehouses in Las Vegas, Nevada and our former Crocs Brand warehouse in Oudenbosch, the Netherlands, as described in Note 5 — Fair Value Measurements. Maturities The maturities of our operating lease liabilities were: As of June 30, 2024 (in thousands) 2024 (remainder of year) $ 36,311 2025 75,419 2026 64,100 2027 55,168 2028 46,099 Thereafter 144,622 Total future minimum lease payments 421,719 Less: imputed interest (80,689) Total operating lease liabilities $ 341,030 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Recurring Fair Value Measurements All of our derivative instruments are classified as Level 2 of the fair value hierarchy and are reported in the condensed consolidated balance sheets within either ‘Prepaid expenses and other assets’ or ‘Accrued expenses and other liabilities’ at June 30, 2024 and December 31, 2023. The fair values of our derivative instruments were an insignificant asset and insignificant liability at June 30, 2024 and an insignificant asset and insignificant liability at December 31, 2023. See Note 6 — Derivative Financial Instruments for more information. The carrying amounts of our cash, cash equivalents, and restricted cash, accounts receivable, accounts payable, current accrued expenses and other liabilities, and our Citibank Facility (as defined below) approximate their fair value as recorded due to the short-term maturity of these instruments. Our borrowing instruments are recorded at their carrying values in the condensed consolidated balance sheets, which may differ from their respective fair values. The Term Loan B Facility (as defined below) and the Notes (as defined below) are classified as Level 1 of the fair value hierarchy and are reported in our condensed consolidated balance sheet at face value, less unamortized issuance costs. The fair value of our Revolving Facility (as defined below) approximates its carrying value at June 30, 2024 and December 31, 2023 based on interest rates currently available to us for similar borrowings. The carrying value and fair value of our borrowing instruments as of June 30, 2024 and December 31, 2023 were: June 30, 2024 December 31, 2023 Carrying Value Fair Value Carrying Value Fair Value (in thousands) Term Loan B Facility $ 685,000 $ 690,994 $ 820,000 $ 824,100 2029 Notes 350,000 318,682 350,000 313,987 2031 Notes 350,000 304,518 350,000 296,742 Revolving Facility 190,000 190,000 190,000 190,000 Non-Financial Assets and Liabilities Our non-financial assets, which primarily consist of property and equipment, right-of-use assets, goodwill, and other intangible assets, are not required to be carried at fair value on a recurring basis and are reported at carrying value. The fair values of these assets are determined, as required, based on Level 3 measurements, including estimates of the amount and timing of future cash flows based upon historical experience, expected market conditions, and management’s plans. We recorded impairments within ‘Selling, general and administrative expenses’ in our condensed consolidated statements of income as follows: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands) Information technology systems impairment (1) $ — $ — $ 18,172 $ — Right-of-use assets impairment (2) — — 5,909 — Total asset impairments $ — $ — $ 24,081 $ — (1) During the six months ended June 30, 2024, we recognized an impairment charge for information technology systems related to the HEYDUDE integration of $17.4 million to prepaid assets and $0.8 million to intangible assets. (2) During the six months ended June 30, 2024, we recognized an impairment of $5.5 million for our former HEYDUDE Brand warehouses in Las Vegas, Nevada and $0.4 million for our former Crocs Brand warehouse in Oudenbosch, the Netherlands. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS We transact business in various foreign entities and are therefore exposed to foreign currency exchange rate risk that impacts the reported U.S. Dollar (“USD”) amounts of revenues, expenses, and certain foreign currency monetary assets and liabilities. In order to manage exposure to fluctuations in foreign currency and to reduce the volatility in earnings caused by fluctuations in foreign exchange rates, we may enter into forward contracts to buy and sell foreign currency. By policy, we do not enter into these contracts for trading purposes or speculation. Counterparty default risk is considered low because the forward contracts we enter into are over-the-counter instruments transacted with highly-rated financial institutions. We were not required to and did not post collateral as of June 30, 2024 or December 31, 2023. Our derivative instruments are recorded at fair value as a derivative asset or liability in the condensed consolidated balance sheets within either ‘Prepaid expenses and other assets’ or ‘Accrued expenses and other liabilities’ at June 30, 2024 and December 31, 2023. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged transactions in a cash flow hedge. We may enter into derivative contracts that are intended to economically hedge certain components of its risk, even though hedge accounting does not apply, or we elect not to apply hedge accounting. We report derivative instruments with the same counterparty on a net basis when a master netting arrangement is in place. For the condensed consolidated statements of cash flows, we classify cash flows from derivative instruments at settlement in the same category as the cash flows from the related hedged items within ‘Cash provided by operating activities.’ As of June 30, 2024, we have derivatives not designated as hedging instruments (“non-hedged derivatives”), which consist of foreign currency forward contracts primarily used to hedge monetary assets and liabilities denominated in non-functional currencies. For our non-hedged derivatives, changes in fair value are recognized within ‘Foreign currency gains (losses), net’ in the condensed consolidated statements of income. We also have cash flow hedges (“hedged derivatives”) as of June 30, 2024. We are exposed to fluctuations in various foreign currencies against our functional currency, the U.S. Dollar. Specifically, we have subsidiaries that transact in currencies other than their functional currency. We use cash flow hedges to minimize the variability in cash flows caused by fluctuations in foreign currency exchange rates related to our external sales and external purchases of inventory. Currency forward agreements involve fixing the exchange rates for delivery of a specified amount of foreign currency on a specified date. The currency forward agreements are typically cash settled in USD for their fair value at or close to their settlement date. We may also use currency option contracts under which we will pay a premium for the right to sell a specified amount of a foreign currency prior to the maturity date of the option. For derivatives designated and that qualify as cash flow hedges of foreign exchange risk, the gain or loss on the derivative is recorded in ‘Accumulated other comprehensive loss’ in the condensed consolidated balance sheets. In the period during which the hedged transaction affects earnings, the related gain or loss is subsequently reclassified to ‘Revenues’ or ‘Cost of sales’ in the condensed consolidated statements of income, which is consistent with the nature of the hedged transaction. During the three and six months ended June 30, 2024, there was a gain of $0.3 million and $0.6 million, respectively, recognized due to reclassification from ‘Accumulated other comprehensive loss’ to ‘Revenues’ or ‘Cost of sales’ related to our hedged derivatives. During the next twelve months, we estimate that a gain of $0.3 million will be reclassified to our condensed consolidated statements of income. The fair values of derivative assets and liabilities, net, all of which are classified as Level 2, reported within either ‘Accrued expenses and other liabilities’ or ‘Prepaid expenses and other assets’ in the condensed consolidated balance sheets, were: June 30, 2024 December 31, 2023 Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities (in thousands) Non-hedged derivatives: Forward foreign currency exchange contracts $ 922 $ (665) $ 2,850 $ (1,333) Hedged derivatives: Cash flow foreign currency contracts 572 (301) 142 (229) Total derivatives 1,494 (966) 2,992 (1,562) Netting of counterparty contracts (502) 502 (1,547) 1,547 Total derivatives, net of counterparty contracts $ 992 $ (464) $ 1,445 $ (15) The notional amounts of outstanding foreign currency forward exchange contracts presented below report the total U.S. Dollar equivalent position and the net contract fair values for each foreign currency position. June 30, 2024 December 31, 2023 Notional Fair Value Notional Fair Value (in thousands) Non-hedged derivatives: Singapore Dollar $ 37,742 $ 101 $ 41,441 $ 1,507 Euro 17,770 102 30,757 1,343 British Pound Sterling 10,182 (172) 17,662 (835) South Korean Won 21,308 (92) 9,759 (428) Indian Rupee 14,537 (60) 5,291 (23) Japanese Yen 13,604 667 969 (47) Other currencies 36,869 (289) — — Total non-hedged derivatives 152,012 257 105,879 1,517 Hedged derivatives: Euro 19,843 402 40,014 (186) British Pound Sterling 20,649 78 22,320 135 South Korean Won 5,398 92 11,093 (42) Indian Rupee 3,786 (9) 5,703 6 Chinese Yuan 32,779 (292) — — Total hedged derivatives 82,455 271 79,130 (87) Total derivatives $ 234,467 $ 528 $ 185,009 $ 1,430 Latest maturity date, non-hedged derivatives July 2024 January 2024 Latest maturity date, hedged derivatives March 2025 December 2024 Amounts reported in ‘Foreign currency gains (losses), net’ in the condensed consolidated statements of income include both realized and unrealized gains (losses) from foreign currency transactions and derivative contracts and were: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands) Foreign currency transaction gains (losses) $ (1,513) $ 402 $ (2,933) $ (369) Foreign currency forward exchange contracts gains (losses) 190 149 (663) 517 Foreign currency gains (losses), net $ (1,323) $ 551 $ (3,596) $ 148 |
BORROWINGS
BORROWINGS | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
BORROWINGS | BORROWINGS Our long-term borrowings were as follows: Maturity Stated Interest Rate Effective Interest Rate June 30, 2024 December 31, 2023 (in thousands) Notes issuance of $350.0 million 2029 4.250 % 4.64 % $ 350,000 $ 350,000 Notes issuance of $350.0 million 2031 4.125 % 4.35 % 350,000 350,000 Term Loan B Facility 2029 685,000 820,000 Revolving Facility 190,000 190,000 Total face value of long-term borrowings 1,575,000 1,710,000 Less: Unamortized issuance costs 45,434 49,004 Current portion of long-term borrowings (1) — 20,000 Total long-term borrowings $ 1,529,566 $ 1,640,996 (1) Represents the current portion of the borrowings under the Term Loan B facility. At June 30, 2024 and December 31, 2023, $10.6 million and $10.7 million, respectively, of accrued interest related to our borrowings was reported in ‘Accounts payable’ in the condensed consolidated balance sheets. Senior Revolving Credit Facility In July 2019, the Company and certain of its subsidiaries (the “Borrowers”) entered into a Second Amended and Restated Credit Agreement (as amended, the “Credit Agreement”), with the lenders named therein and PNC Bank, National Association, as a lender and administrative agent for the lenders. Since that time, we have amended the Credit Agreement, which, as amended to date, provides for a revolving credit facility of $750.0 million, which can be increased by an additional $250.0 million subject to certain conditions (the “Revolving Facility”). Borrowings under the Credit Agreement bear interest at a variable interest rate based on (A) a Base Rate (defined as the highest of (i) the Overnight Bank Funding Rate (as defined in the Credit Agreement), plus 0.25%, (ii) the Prime Rate (as defined in the Credit Agreement), and (iii) the Daily Simple SOFR (as defined in the Credit Agreement), plus 1.00%), plus an applicable margin ranging from 0.25% to 0.875% based on our leverage ratio or 1.35% to 1.975% for the Daily Simple SOFR based on the leverage ratio, or (B) the Term SOFR Rate (as defined in the Credit Agreement), plus an applicable margin ranging from 1.35% to 1.975% based on our leverage ratio for one-month interest periods and 1.40% to 2.025% based on our leverage ratio for three month interest periods. Borrowings under the Credit Agreement are secured by all of the assets of the Borrowers and guaranteed by certain other subsidiaries of the Borrowers. The Credit Agreement requires or required, as applicable, us to maintain a minimum interest coverage ratio of 3.00 to 1.00, and a maximum leverage ratio of (i) 4.00 to 1.00 from the quarter ended March 31, 2022 through, and including, the quarter ended December 31, 2023, (ii) 3.75 to 1.00 for the quarter ended March 31, 2024, (iii) 3.50 to 1.00 for the quarter ended June 30, 2024, and (iv) 3.25 to 1.00 for the quarter ending September 30, 2024 and thereafter (subject to adjustment in certain circumstances). The Credit Agreement permits, among other things, (i) stock repurchases subject to certain restrictions, including after giving effect to such stock repurchases, the maximum leverage ratio does not exceed certain levels; and (ii) certain acquisitions so long as there is borrowing availability under the Credit Agreement of at least $40.0 million. As of June 30, 2024, we were in compliance with all financial covenants under the Credit Agreement. As of June 30, 2024, the total commitments available from the lenders under the Revolving Facility were $750.0 million. At June 30, 2024, we had $190.0 million in outstanding borrowings and $1.3 million in outstanding letters of credit under the Revolving Facility, which reduces amounts available for borrowing under the Revolving Facility. As of June 30, 2024 and December 31, 2023, we had $558.7 million of available borrowing capacity under the Revolving Facility, which matures in November 2027. Term Loan B Facility On February 17, 2022, the Company entered into a credit agreement (the “Original Term Loan B Credit Agreement”) with Citibank, N.A., as administrative agent and lender, to among other things, finance a portion of the cash consideration for the Acquisition, which was amended on August 8, 2023 (the “August 2023 Amendment”) and on February 13, 2024 (the “February 2024 Amendment”). The Original Term Loan B Credit Agreement, as amended by the August 2023 Amendment and the February 2024 Amendment is referred to herein as the “Term Loan B Credit Agreement.” The Original Term Loan B Credit Agreement provided for an aggregate term loan B facility in the principal amount of $2.0 billion. Prior to the February 2024 Amendment, the outstanding balance was $820.0 million. Among other things, the February 2024 Amendment provided for a new $820.0 million tranche of term loans (the “2024 Refinancing Term Loans” and, such facility, the "Term Loan B Facility"), to refinance the then-outstanding principal balance. The 2024 Refinancing Term Loans are secured by substantially all of the Company’s and each subsidiary guarantor’s assets on a pari passu basis with their obligations arising from the Term Loan B Credit Agreement and is scheduled to mature on February 17, 2029, subject to certain exceptions set forth in the Term Loan B Credit Agreement. Additionally, subject to certain conditions, including, without limitation, satisfying certain leverage ratios, the Company may, at any time, on one or more occasions, add one or more new classes of term facilities and/or increase the principal amount of the loans of any existing class by requesting one or more incremental term facilities. Pursuant to the reduced interest rate margins applicable to the 2024 Refinancing Term Loans, each term loan borrowing which is an alternate base rate borrowing bears interest at a rate per annum equal to the Alternate Base Rate (as defined in the Term Loan B Credit Agreement), plus 1.25%. Each term loan borrowing which is a term SOFR borrowing bears interest at a rate per annum equal to the Adjusted Term SOFR Rate (as defined in the Term Loan B Credit Agreement) plus 2.25%. As of June 30, 2024, the Term Loan B Facility was fully drawn with no remaining borrowing capacity, and we had $685.0 million in outstanding principal on the Term Loan B Facility, which matures on February 17, 2029. The Term Loan B Credit Agreement also contains customary affirmative and negative covenants, incurrence financial covenants, representations and warranties, events of default and other provisions. As of June 30, 2024, we were in compliance with all financial covenants under the Term Loan B Credit Agreement. Asia Revolving Credit Facility During the six months ended June 30, 2024, we had one revolving credit facility in Asia with Citibank (China) Company Limited, Shanghai Branch (the “Citibank Facility”), which, as amended, provides up to an equivalent of $15.0 million. As of June 30, 2024, we had no borrowings outstanding on the Citibank Facility. As of December 31, 2023, we had borrowings outstanding of $3.3 million on the Citibank Facility. Senior Notes Issuances In March 2021, the Company completed the issuance and sale of $350.0 million aggregate principal amount of 4.250% Senior Notes due March 15, 2029 (the “2029 Notes”), pursuant to the indenture related thereto (as amended and/or supplemented to date, the “2029 Notes Indenture”). Additionally, in August 2021, the Company completed the issuance and sale of $350.0 million aggregate principal amount of 4.125% Senior Notes due August 15, 2031 (the “2031 Notes”), pursuant to the indenture related thereto (as amended and/or supplemented to date, “the 2031 Notes Indenture” and, together with the 2029 Notes Indenture, the “Indentures” and, each, an “Indenture”). Interest on each of the 2029 Notes and the 2031 Notes (collectively, the “Notes”) is payable semi-annually. The Company had or will have, as applicable, the option to redeem all or any portion of the 2029 Notes, at once or over time, at any time on or after March 15, 2024, at a redemption price equal to 100% of the principal amount thereof, plus a premium declining ratably on an annual basis to par and accrued and unpaid interest, if any, to, but excluding, the date of redemption. The Company also had the option to redeem some or all of the 2029 Notes at any time before March 15, 2024 at a redemption price of 100% of the principal amount to be redeemed, plus a “make-whole” premium and accrued and unpaid interest, if any, to, but excluding, the date of redemption. In addition, at any time before March 15, 2024, the Company could have redeemed up to 40% of the aggregate principal amount of the 2029 Notes at a redemption price of 104.250% of the principal amount with the proceeds from certain equity issuances, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. The Company will have the option to redeem all or any portion of the 2031 Notes, at once or over time, at any time on or after August 15, 2026, at a redemption price equal to 100% of the principal amount thereof, plus a premium declining ratably on an annual basis to par and accrued and unpaid interest, if any, to, but excluding, the date of redemption. The Company will also have the option to redeem some or all of the 2031 Notes at any time before August 15, 2026 at a redemption price of 100% of the principal amount to be redeemed, plus a “make-whole” premium and accrued and unpaid interest, if any, to, but excluding, the date of redemption. In addition, at any time before August 15, 2024, the Company may redeem up to 40% of the aggregate principal amount of the 2031 Notes at a redemption price of 104.125% of the principal amount with the proceeds from certain equity issuances, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. The Notes rank pari passu in right of payment with all of the Company’s existing and future senior debt, including the Credit Agreement, and are senior in right of payment to any of the Company’s future debt that is, by its term, expressly subordinated in right of payment to the Notes. The Notes are unconditionally guaranteed by each of the Company’s restricted subsidiaries that is a borrower or guarantor under the Credit Agreement and by each of the Company’s wholly-owned restricted subsidiaries that guarantees any debt of the Company or any guarantor under any syndicated credit facility or capital markets debt in an aggregate principal amount in excess of $25.0 million. The Indentures contain covenants that, among other things, limit the ability of the Company and its restricted subsidiaries to incur additional debt or issue certain preferred stock; pay dividends or repurchase or redeem capital stock or make other restricted payments; declare or pay dividends or other payments; incur liens; enter into certain types of transactions with the Company’s affiliates; and consolidate or merge with or into other companies. As of June 30, 2024, we were in compliance with all financial covenants under the Notes. |
COMMON STOCK REPURCHASE PROGRAM
COMMON STOCK REPURCHASE PROGRAM | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
COMMON STOCK REPURCHASE PROGRAM | COMMON STOCK REPURCHASE PROGRAM During the three and six months ended June 30, 2024, we repurchased 1.2 million shares of our common stock at a cost of $175.0 million, including commissions. As of June 30, 2024, we also have recorded an accrual for the stock repurchase excise tax, which is reported in ‘Accrued expenses and other liabilities’ and ‘Treasury stock’ in our condensed consolidated balance sheet. During the three and six months ended June 30, 2023, we did not repurchase any shares of our common stock. As of June 30, 2024, we had remaining authorization to repurchase $700.0 million of our common stock, subject to restrictions under our Indentures, Credit Agreement, and Term Loan B Credit Agreement. |
REVENUES
REVENUES | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES Revenues by reportable operating segment and by channel were: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands) Crocs Brand: North America: Wholesale $ 173,987 $ 181,085 $ 354,325 $ 353,140 Direct-to-consumer 314,728 293,473 517,304 472,727 Total North America (1) 488,715 474,558 871,629 825,867 International: Wholesale 261,294 226,257 542,959 464,765 Direct-to-consumer 163,980 132,135 243,218 191,096 Total International 425,274 358,392 786,177 655,861 Total Crocs Brand $ 913,989 $ 832,950 $ 1,657,806 $ 1,481,728 Crocs Brand: Wholesale $ 435,281 $ 407,342 $ 897,284 $ 817,905 Direct-to-consumer 478,708 425,608 760,522 663,823 Total Crocs Brand 913,989 832,950 1,657,806 1,481,728 HEYDUDE Brand: Wholesale 113,829 148,825 248,582 316,688 Direct-to-consumer 83,684 90,592 143,747 158,117 Total HEYDUDE Brand (2) 197,513 239,417 392,329 474,805 Total consolidated revenues $ 1,111,502 $ 1,072,367 $ 2,050,135 $ 1,956,533 (1) North America includes the United States and Canada. (2) The vast majority of HEYDUDE Brand revenues are derived from North America. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income tax expense and effective tax rates were: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands, except effective tax rate) Income before income taxes $ 296,425 $ 277,242 $ 490,454 $ 469,008 Income tax expense 67,518 64,830 109,093 107,053 Effective tax rate 22.8 % 23.4 % 22.2 % 22.8 % During the three months ended June 30, 2024, income tax expense increased $2.7 million compared to the same period in 2023. The effective tax rate for the three months ended June 30, 2024 was 22.8% compared to an effective tax rate of 23.4% for the same period in 2023, a 0.6% decrease. This decrease in the effective tax rate was primarily driven by a shift in the mix of the Company's domestic and foreign earnings. Our effective income tax rate, for each period presented, also differs from the federal U.S. statutory rate due to differences in income tax rates between U.S. and foreign jurisdictions. We had unrecognized tax benefits of $547.2 million and $556.5 million at June 30, 2024 and December 31, 2023, respectively, and we do not expect any significant changes in tax benefits in the next twelve months. During the six months ended June 30, 2024, income tax expense increased $2.0 million compared to the same period in 2023. The effective tax rate for the six months ended June 30, 2024 was 22.2% compared to an effective tax rate of 22.8% for the same period in 2023, a 0.6% decrease. This decrease in the effective tax rate was primarily driven by a shift in the mix of the Company’s domestic and foreign earnings. Our effective income tax rate, for each period presented, also differs from the federal U.S. statutory rate due to differences in income tax rates between U.S. and foreign jurisdictions. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic and diluted earnings per common share (“EPS”) for the three and six months ended June 30, 2024 and 2023 were: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands, except per share data) Numerator: Net income $ 228,907 $ 212,412 $ 381,361 $ 361,955 Denominator: Weighted average common shares outstanding - basic 60,320 62,037 60,442 61,937 Plus: Dilutive effect of stock options and unvested restricted stock units 446 566 468 679 Weighted average common shares outstanding - diluted 60,766 62,603 60,910 62,616 Net income per common share: Basic $ 3.79 $ 3.42 $ 6.31 $ 5.84 Diluted $ 3.77 $ 3.39 $ 6.26 $ 5.78 In the three and six months ended June 30, 2024 and 2023, an insignificant number of outstanding shares issued under share-based compensation awards were anti-dilutive and, therefore, excluded from the calculation of diluted EPS. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Purchase Commitments As of June 30, 2024, we had purchase commitments to third-party manufacturers, primarily for materials and supplies used in the manufacture of our products, for an aggregate of $234.9 million. We expect to fulfill our commitments under these agreements in the normal course of business, and as such, no liability has been recorded. Other We are regularly subject to, and are currently undergoing, audits by various tax authorities in the United States and several foreign jurisdictions, including customs duties, import, and other taxes for prior tax years. During our normal course of business, we may make certain indemnities, commitments, and guarantees under which we may be required to make payments. We cannot determine a range of estimated future payments and have not recorded any liability for indemnities, commitments, and guarantees in the accompanying condensed consolidated balance sheets. We are also subject to litigation from time to time in the ordinary course of business, including employment, intellectual property, and product liability claims. We are not party to any significant pending legal proceedings that we believe would reasonably have a material adverse impact on our business, financial results, and cash flows. For all legal claims and disputes, we have accrued estimated losses of $2.3 million within ‘Accrued expenses and other liabilities’ in the condensed consolidated balance sheet as of June 30, 2024. As we are able, we estimate reasonably possible losses or a range of reasonably possible losses. As of June 30, 2024, we estimated that reasonably possible losses associated with these legal claims and other disputes could potentially exceed amounts accrued by an insignificant amount. |
OPERATING SEGMENTS AND GEOGRAPH
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION | OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION We have two reportable operating segments: the Crocs Brand and the HEYDUDE Brand. Each of the reportable operating segments derives its revenues from the sale of footwear and accessories to external customers. Additionally, ‘Enterprise corporate’ costs include global corporate costs associated with both brands, including legal, information technology, human resources, and finance. Each segment’s performance is evaluated based on segment results without allocating Enterprise corporate expenses. Segment profits or losses include adjustments to eliminate inter-segment sales. Reconciling items between segment income from operations and income from operations consist of unallocated enterprise corporate expenses. We do not report asset information by segment because that information is not used to evaluate performance or allocate resources between segments. The following tables set forth information related to reportable operating segments: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands) Revenues: Crocs Brand (1) $ 913,989 $ 832,950 $ 1,657,806 $ 1,481,728 HEYDUDE Brand 197,513 239,417 392,329 474,805 Total consolidated revenues $ 1,111,502 $ 1,072,367 $ 2,050,135 $ 1,956,533 Income from operations: Crocs Brand (1)(2) $ 355,532 $ 317,684 $ 619,657 $ 535,691 HEYDUDE Brand (2) 42,367 65,509 82,513 142,129 Reconciliation of total segment income from operations to income before income taxes: Enterprise corporate (2) (72,161) (64,704) (150,003) (124,403) Income from operations 325,738 318,489 552,167 553,417 Foreign currency gains (losses), net (1,323) 551 (3,596) 148 Interest income 1,126 548 1,542 719 Interest expense (29,161) (43,063) (59,724) (85,700) Other income, net 45 717 65 424 Income before income taxes $ 296,425 $ 277,242 $ 490,454 $ 469,008 Depreciation and amortization: Crocs Brand (1) $ 8,861 $ 7,099 $ 17,397 $ 14,536 HEYDUDE Brand 4,542 3,562 8,758 7,068 Enterprise corporate 4,141 1,983 7,550 4,176 Total consolidated depreciation and amortization $ 17,544 $ 12,644 $ 33,705 $ 25,780 (1) Our business has continued to evolve in the period following the consummation of the HEYDUDE acquisition, as we have grown the brand and staffed and developed our leadership team at HEYDUDE. In the fourth quarter of 2023, to reflect changes in the way management evaluates performance, makes operating decisions, and allocates resources, we updated our reportable operating segments to be (i) Crocs Brand and (ii) HEYDUDE Brand. Our ‘North America,’ ‘Asia Pacific,’ and ‘EMEALA’ segments as well as revenues and expenses related to Crocs ‘Brand corporate’ have been consolidated to the ‘Crocs Brand.’ As a result of these changes, the previously reported amounts for revenues, income from operations, and depreciation and amortization for the three and six months ended June 30, 2023 have been recast to conform to current period presentation. (2) In the first quarter of 2024, to reflect a change in the way management evaluates segment performance, makes operating decisions, and allocates resources, we made changes to segment profitability related to certain foreign currency amounts impacting cost of sales. These amounts have shifted costs or benefits that were previously presented in each of our reportable segments to ‘Enterprise corporate.’ We believe that the impact of these changes on prior periods is insignificant to each segment and thus have not recast prior periods. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||
Net income | $ 228,907 | $ 212,412 | $ 381,361 | $ 361,955 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 6 Months Ended |
Jun. 30, 2024 shares | Jun. 30, 2024 shares | |
Trading Arrangements, by Individual | ||
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Expiration Date | 3/23/2026 | |
Anne Mehlman [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | The following table shows all directors or officers who adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K, during the three months ended June 30, 2024. Except as shown below, during the three months ended June 30, 2024, no other directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. Trading Arrangement Name and Position Action Date Rule 10b5-1* Non-Rule 10b5-1** Total Number of Shares to be Sold Expiration Date Andrew Rees, Chief Executive Officer Adopt 5/24/2024 X 100,000 3/23/2026 * Intended to satisfy the affirmative defense of Rule 10b5-1(c). ** Not intended to satisfy the affirmative defense of Rule 10b5-1(c). | |
Name | Andrew Rees | |
Title | Chief Executive Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | 5/24/2024 | |
Arrangement Duration | 564 days | |
Aggregate Available | 100,000 | 100,000 |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Unless otherwise noted in this report, any description of the “Company,” “we,” “us,” or “our” includes Crocs, Inc. and our consolidated subsidiaries within our reportable operating segments and corporate operations. We are engaged in the design, development, worldwide marketing, distribution, and sale of casual lifestyle footwear and accessories for all. We strive to be the global leader in the sale of casual footwear characterized by functionality, comfort, color, and lightweight design. |
Segment Reporting | Our reportable operating segments include: (i) the Crocs Brand and (ii) the HEYDUDE Brand. See Note 13 — Operating Segments and Geographic Information for additional information. |
Principles of Consolidation | The accompanying unaudited condensed consolidated interim financial statements include our accounts and those of our wholly-owned subsidiaries and reflect all adjustments which are necessary for a fair statement of the financial position, results of operations, and cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Such unaudited condensed consolidated interim financial statements have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The year-end condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. |
Reclassifications | Reclassifications We have reclassified certain amounts in Note 3 — Accrued Expenses and Other Liabilities, Note 9 — Revenues, and Note 13 — Operating Segments and Geographic Information to conform to current period presentation. |
Use of Estimates | Use of Estimates U.S. GAAP requires us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions used to determine certain amounts that affect the financial statements are reasonable, based on information available at the time they are made. Management believes that the estimates, judgments, and assumptions made when accounting for items and matters such as, but not limited to, the allowance for doubtful accounts, customer rebates, sales returns and allowances, impairment assessments and charges, recoverability of long-lived assets, deferred tax assets, valuation allowances, uncertain tax positions, income tax expense, share-based compensation expense, the assessment of lower of cost or net realizable value on inventory, useful lives assigned to long-lived assets, goodwill, and indefinite-lived intangible assets are reasonable based on information available at the time they are made. To the extent there are differences between these estimates and actual results, our condensed consolidated financial statements may be materially affected. |
New Accounting Pronouncement Not Yet Adopted | New Accounting Pronouncement Not Yet Adopted Pillar Two Global Minimum Tax The Organization for Economic Co-operation and Development (“OECD”) has released Pillar Two model rules introducing a 15% global minimum tax rate for large multinational corporations to be effective starting with tax periods ending in 2024. Various jurisdictions we operate in have enacted or plan to enact legislation beginning in 2024 or in subsequent years. There remains uncertainty as to the final Pillar Two rules as the OECD continues to release guidance and modifications to the rules. We do not anticipate the Pillar Two rules will have a material impact on our 2024 consolidated financial statements. Income Taxes: Improvements to Income Tax Disclosure In December 2023, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance related to the disclosure of rate reconciliation and income taxes paid. This guidance becomes effective for annual periods beginning after December 15, 2024 with early adoption permitted and should be applied on a prospective basis. We do not expect this standard to have a material impact on our consolidated financial statements, but it will require increased disclosures within the notes to our consolidated financial statements. Segment Reporting: Improvements to Reportable Segment Disclosures In November 2023, the FASB issued authoritative guidance related to the segment disclosures. This guidance becomes effective for annual periods beginning after December 15, 2023 and interim periods beginning after December 15, 2024, with early adoption permitted and should be applied on a retrospective basis. We do not expect this standard to have a material impact on our consolidated financial statements, but it will require increased disclosures within the notes to our consolidated financial statements. Other new pronouncements issued but not effective until after June 30, 2024 are not expected to have a material impact on our condensed consolidated financial statements. |
Fair Value of Non-Financial Assets and Liabilities | Non-Financial Assets and Liabilities |
Derivatives Financial Instruments | We transact business in various foreign entities and are therefore exposed to foreign currency exchange rate risk that impacts the reported U.S. Dollar (“USD”) amounts of revenues, expenses, and certain foreign currency monetary assets and liabilities. In order to manage exposure to fluctuations in foreign currency and to reduce the volatility in earnings caused by fluctuations in foreign exchange rates, we may enter into forward contracts to buy and sell foreign currency. By policy, we do not enter into these contracts for trading purposes or speculation. Counterparty default risk is considered low because the forward contracts we enter into are over-the-counter instruments transacted with highly-rated financial institutions. We were not required to and did not post collateral as of June 30, 2024 or December 31, 2023. Our derivative instruments are recorded at fair value as a derivative asset or liability in the condensed consolidated balance sheets within either ‘Prepaid expenses and other assets’ or ‘Accrued expenses and other liabilities’ at June 30, 2024 and December 31, 2023. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged transactions in a cash flow hedge. We may enter into derivative contracts that are intended to economically hedge certain components of its risk, even though hedge accounting does not apply, or we elect not to apply hedge accounting. We report derivative instruments with the same counterparty on a net basis when a master netting arrangement is in place. For the condensed consolidated statements of cash flows, we classify cash flows from derivative instruments at settlement in the same category as the cash flows from the related hedged items within ‘Cash provided by operating activities.’ As of June 30, 2024, we have derivatives not designated as hedging instruments (“non-hedged derivatives”), which consist of foreign currency forward contracts primarily used to hedge monetary assets and liabilities denominated in non-functional currencies. For our non-hedged derivatives, changes in fair value are recognized within ‘Foreign currency gains (losses), net’ in the condensed consolidated statements of income. We also have cash flow hedges (“hedged derivatives”) as of June 30, 2024. We are exposed to fluctuations in various foreign currencies against our functional currency, the U.S. Dollar. Specifically, we have subsidiaries that transact in currencies other than their functional currency. We use cash flow hedges to minimize the variability in cash flows caused by fluctuations in foreign currency exchange rates related to our external sales and external purchases of inventory. Currency forward agreements involve fixing the exchange rates for delivery of a specified amount of foreign currency on a specified date. The currency forward agreements are typically cash settled in USD for their fair value at or close to their settlement date. We may also use currency option contracts under which we will pay a premium for the right to sell a specified amount of a foreign currency prior to the maturity date of the option. |
RECENT ACCOUNTING PRONOUNCEME_2
RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncement Not Yet Adopted | New Accounting Pronouncement Not Yet Adopted Pillar Two Global Minimum Tax The Organization for Economic Co-operation and Development (“OECD”) has released Pillar Two model rules introducing a 15% global minimum tax rate for large multinational corporations to be effective starting with tax periods ending in 2024. Various jurisdictions we operate in have enacted or plan to enact legislation beginning in 2024 or in subsequent years. There remains uncertainty as to the final Pillar Two rules as the OECD continues to release guidance and modifications to the rules. We do not anticipate the Pillar Two rules will have a material impact on our 2024 consolidated financial statements. Income Taxes: Improvements to Income Tax Disclosure In December 2023, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance related to the disclosure of rate reconciliation and income taxes paid. This guidance becomes effective for annual periods beginning after December 15, 2024 with early adoption permitted and should be applied on a prospective basis. We do not expect this standard to have a material impact on our consolidated financial statements, but it will require increased disclosures within the notes to our consolidated financial statements. Segment Reporting: Improvements to Reportable Segment Disclosures In November 2023, the FASB issued authoritative guidance related to the segment disclosures. This guidance becomes effective for annual periods beginning after December 15, 2023 and interim periods beginning after December 15, 2024, with early adoption permitted and should be applied on a retrospective basis. We do not expect this standard to have a material impact on our consolidated financial statements, but it will require increased disclosures within the notes to our consolidated financial statements. Other new pronouncements issued but not effective until after June 30, 2024 are not expected to have a material impact on our condensed consolidated financial statements. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Supplemental Non-Cash Investing and Financing Activities | Condensed Consolidated Statements of Cash Flows - Supplemental Disclosures Six Months Ended June 30, 2024 2023 (in thousands) Cash paid for interest $ 54,708 $ 81,354 Cash paid for income taxes 71,829 102,107 Cash paid for operating leases 43,226 35,259 Non-Cash Investing and Financing Activities: Right-of-use assets obtained in exchange for operating lease liabilities, net of terminations $ 50,423 $ 19,062 Accrued purchases of property, equipment, and software 9,589 20,657 |
ACCRUED EXPENSES AND OTHER LI_2
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | Amounts reported in ‘Accrued expenses and other liabilities’ in the condensed consolidated balance sheets were: June 30, 2024 December 31, 2023 (in thousands) Professional services $ 69,584 $ 80,986 Accrued compensation and benefits 48,883 70,245 Return liabilities 33,179 38,644 Sales/use and value added taxes payable 30,478 23,768 Fulfillment, freight, and duties 35,042 22,269 Royalties payable (1) 10,492 10,097 Accrued rent and occupancy 10,699 8,246 Customer deposit liability and deferred revenue (1) 10,182 7,568 Accrued legal fees 6,198 2,546 Other (1) 30,358 21,402 Total accrued expenses and other liabilities $ 285,095 $ 285,771 (1) Amounts as of December 31, 2023 have been reclassified to conform to current period presentation. |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Schedule of Rights-of-Use Assets and Operating Lease Liabilities | Amounts reported in the condensed consolidated balance sheets were: June 30, 2024 December 31, 2023 (in thousands) Assets: Right-of-use assets $ 292,089 $ 287,440 Liabilities: Current operating lease liabilities $ 63,918 $ 62,267 Long-term operating lease liabilities 277,112 269,769 Total operating lease liabilities $ 341,030 $ 332,036 |
Schedule of Lease Costs and Other Information | Lease-related costs reported within ‘Cost of sales’ and ‘Selling, general and administrative expenses’ in our condensed consolidated statements of income were: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands) Operating lease cost $ 20,409 $ 18,393 $ 40,654 $ 36,592 Short-term lease cost 5,214 4,192 10,013 7,234 Variable lease cost 15,944 14,570 23,307 20,118 Total lease costs $ 41,567 $ 37,155 $ 73,974 $ 63,944 |
Schedule of Maturities of Operating Lease Liabilities | The maturities of our operating lease liabilities were: As of June 30, 2024 (in thousands) 2024 (remainder of year) $ 36,311 2025 75,419 2026 64,100 2027 55,168 2028 46,099 Thereafter 144,622 Total future minimum lease payments 421,719 Less: imputed interest (80,689) Total operating lease liabilities $ 341,030 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of the Company's Outstanding Borrowings | The carrying value and fair value of our borrowing instruments as of June 30, 2024 and December 31, 2023 were: June 30, 2024 December 31, 2023 Carrying Value Fair Value Carrying Value Fair Value (in thousands) Term Loan B Facility $ 685,000 $ 690,994 $ 820,000 $ 824,100 2029 Notes 350,000 318,682 350,000 313,987 2031 Notes 350,000 304,518 350,000 296,742 Revolving Facility 190,000 190,000 190,000 190,000 |
Schedule of Fair Value Measurements, Nonrecurring | The fair values of these assets are determined, as required, based on Level 3 measurements, including estimates of the amount and timing of future cash flows based upon historical experience, expected market conditions, and management’s plans. We recorded impairments within ‘Selling, general and administrative expenses’ in our condensed consolidated statements of income as follows: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands) Information technology systems impairment (1) $ — $ — $ 18,172 $ — Right-of-use assets impairment (2) — — 5,909 — Total asset impairments $ — $ — $ 24,081 $ — (1) During the six months ended June 30, 2024, we recognized an impairment charge for information technology systems related to the HEYDUDE integration of $17.4 million to prepaid assets and $0.8 million to intangible assets. (2) During the six months ended June 30, 2024, we recognized an impairment of $5.5 million for our former HEYDUDE Brand warehouses in Las Vegas, Nevada and $0.4 million for our former Crocs Brand warehouse in Oudenbosch, the Netherlands. |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Values of Derivative Assets and Liabilities | The fair values of derivative assets and liabilities, net, all of which are classified as Level 2, reported within either ‘Accrued expenses and other liabilities’ or ‘Prepaid expenses and other assets’ in the condensed consolidated balance sheets, were: June 30, 2024 December 31, 2023 Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities (in thousands) Non-hedged derivatives: Forward foreign currency exchange contracts $ 922 $ (665) $ 2,850 $ (1,333) Hedged derivatives: Cash flow foreign currency contracts 572 (301) 142 (229) Total derivatives 1,494 (966) 2,992 (1,562) Netting of counterparty contracts (502) 502 (1,547) 1,547 Total derivatives, net of counterparty contracts $ 992 $ (464) $ 1,445 $ (15) |
Schedule of Derivative Financial Instruments Notional Amounts on Outstanding Positions | The notional amounts of outstanding foreign currency forward exchange contracts presented below report the total U.S. Dollar equivalent position and the net contract fair values for each foreign currency position. June 30, 2024 December 31, 2023 Notional Fair Value Notional Fair Value (in thousands) Non-hedged derivatives: Singapore Dollar $ 37,742 $ 101 $ 41,441 $ 1,507 Euro 17,770 102 30,757 1,343 British Pound Sterling 10,182 (172) 17,662 (835) South Korean Won 21,308 (92) 9,759 (428) Indian Rupee 14,537 (60) 5,291 (23) Japanese Yen 13,604 667 969 (47) Other currencies 36,869 (289) — — Total non-hedged derivatives 152,012 257 105,879 1,517 Hedged derivatives: Euro 19,843 402 40,014 (186) British Pound Sterling 20,649 78 22,320 135 South Korean Won 5,398 92 11,093 (42) Indian Rupee 3,786 (9) 5,703 6 Chinese Yuan 32,779 (292) — — Total hedged derivatives 82,455 271 79,130 (87) Total derivatives $ 234,467 $ 528 $ 185,009 $ 1,430 Latest maturity date, non-hedged derivatives July 2024 January 2024 Latest maturity date, hedged derivatives March 2025 December 2024 |
Schedule of Gain (Losses) from Foreign Currency Transactions and Derivative Contracts | Amounts reported in ‘Foreign currency gains (losses), net’ in the condensed consolidated statements of income include both realized and unrealized gains (losses) from foreign currency transactions and derivative contracts and were: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands) Foreign currency transaction gains (losses) $ (1,513) $ 402 $ (2,933) $ (369) Foreign currency forward exchange contracts gains (losses) 190 149 (663) 517 Foreign currency gains (losses), net $ (1,323) $ 551 $ (3,596) $ 148 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Other Term Borrowings | Our long-term borrowings were as follows: Maturity Stated Interest Rate Effective Interest Rate June 30, 2024 December 31, 2023 (in thousands) Notes issuance of $350.0 million 2029 4.250 % 4.64 % $ 350,000 $ 350,000 Notes issuance of $350.0 million 2031 4.125 % 4.35 % 350,000 350,000 Term Loan B Facility 2029 685,000 820,000 Revolving Facility 190,000 190,000 Total face value of long-term borrowings 1,575,000 1,710,000 Less: Unamortized issuance costs 45,434 49,004 Current portion of long-term borrowings (1) — 20,000 Total long-term borrowings $ 1,529,566 $ 1,640,996 (1) Represents the current portion of the borrowings under the Term Loan B facility. |
REVENUES (Tables)
REVENUES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenues by Channel and Brand | Revenues by reportable operating segment and by channel were: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands) Crocs Brand: North America: Wholesale $ 173,987 $ 181,085 $ 354,325 $ 353,140 Direct-to-consumer 314,728 293,473 517,304 472,727 Total North America (1) 488,715 474,558 871,629 825,867 International: Wholesale 261,294 226,257 542,959 464,765 Direct-to-consumer 163,980 132,135 243,218 191,096 Total International 425,274 358,392 786,177 655,861 Total Crocs Brand $ 913,989 $ 832,950 $ 1,657,806 $ 1,481,728 Crocs Brand: Wholesale $ 435,281 $ 407,342 $ 897,284 $ 817,905 Direct-to-consumer 478,708 425,608 760,522 663,823 Total Crocs Brand 913,989 832,950 1,657,806 1,481,728 HEYDUDE Brand: Wholesale 113,829 148,825 248,582 316,688 Direct-to-consumer 83,684 90,592 143,747 158,117 Total HEYDUDE Brand (2) 197,513 239,417 392,329 474,805 Total consolidated revenues $ 1,111,502 $ 1,072,367 $ 2,050,135 $ 1,956,533 (1) North America includes the United States and Canada. (2) The vast majority of HEYDUDE Brand revenues are derived from North America. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense and Effective Tax Rates | Income tax expense and effective tax rates were: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands, except effective tax rate) Income before income taxes $ 296,425 $ 277,242 $ 490,454 $ 469,008 Income tax expense 67,518 64,830 109,093 107,053 Effective tax rate 22.8 % 23.4 % 22.2 % 22.8 % |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | Basic and diluted earnings per common share (“EPS”) for the three and six months ended June 30, 2024 and 2023 were: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands, except per share data) Numerator: Net income $ 228,907 $ 212,412 $ 381,361 $ 361,955 Denominator: Weighted average common shares outstanding - basic 60,320 62,037 60,442 61,937 Plus: Dilutive effect of stock options and unvested restricted stock units 446 566 468 679 Weighted average common shares outstanding - diluted 60,766 62,603 60,910 62,616 Net income per common share: Basic $ 3.79 $ 3.42 $ 6.31 $ 5.84 Diluted $ 3.77 $ 3.39 $ 6.26 $ 5.78 |
OPERATING SEGMENTS AND GEOGRA_2
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Information Related to Reportable Operating Segments | The following tables set forth information related to reportable operating segments: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in thousands) Revenues: Crocs Brand (1) $ 913,989 $ 832,950 $ 1,657,806 $ 1,481,728 HEYDUDE Brand 197,513 239,417 392,329 474,805 Total consolidated revenues $ 1,111,502 $ 1,072,367 $ 2,050,135 $ 1,956,533 Income from operations: Crocs Brand (1)(2) $ 355,532 $ 317,684 $ 619,657 $ 535,691 HEYDUDE Brand (2) 42,367 65,509 82,513 142,129 Reconciliation of total segment income from operations to income before income taxes: Enterprise corporate (2) (72,161) (64,704) (150,003) (124,403) Income from operations 325,738 318,489 552,167 553,417 Foreign currency gains (losses), net (1,323) 551 (3,596) 148 Interest income 1,126 548 1,542 719 Interest expense (29,161) (43,063) (59,724) (85,700) Other income, net 45 717 65 424 Income before income taxes $ 296,425 $ 277,242 $ 490,454 $ 469,008 Depreciation and amortization: Crocs Brand (1) $ 8,861 $ 7,099 $ 17,397 $ 14,536 HEYDUDE Brand 4,542 3,562 8,758 7,068 Enterprise corporate 4,141 1,983 7,550 4,176 Total consolidated depreciation and amortization $ 17,544 $ 12,644 $ 33,705 $ 25,780 (1) Our business has continued to evolve in the period following the consummation of the HEYDUDE acquisition, as we have grown the brand and staffed and developed our leadership team at HEYDUDE. In the fourth quarter of 2023, to reflect changes in the way management evaluates performance, makes operating decisions, and allocates resources, we updated our reportable operating segments to be (i) Crocs Brand and (ii) HEYDUDE Brand. Our ‘North America,’ ‘Asia Pacific,’ and ‘EMEALA’ segments as well as revenues and expenses related to Crocs ‘Brand corporate’ have been consolidated to the ‘Crocs Brand.’ As a result of these changes, the previously reported amounts for revenues, income from operations, and depreciation and amortization for the three and six months ended June 30, 2023 have been recast to conform to current period presentation. (2) In the first quarter of 2024, to reflect a change in the way management evaluates segment performance, makes operating decisions, and allocates resources, we made changes to segment profitability related to certain foreign currency amounts impacting cost of sales. These amounts have shifted costs or benefits that were previously presented in each of our reportable segments to ‘Enterprise corporate.’ We believe that the impact of these changes on prior periods is insignificant to each segment and thus have not recast prior periods. |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Cash paid for interest | $ 54,708 | $ 81,354 |
Cash paid for income taxes | 71,829 | 102,107 |
Cash paid for operating leases | 43,226 | 35,259 |
Non-Cash Investing and Financing Activities: | ||
Right-of-use assets obtained in exchange for operating lease liabilities, net of terminations | 50,423 | 19,062 |
Accrued purchases of property, equipment, and software | $ 9,589 | $ 20,657 |
ACCRUED EXPENSES AND OTHER LI_3
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Payables and Accruals [Abstract] | ||
Professional services | $ 69,584 | $ 80,986 |
Accrued compensation and benefits | 48,883 | 70,245 |
Return liabilities | 33,179 | 38,644 |
Sales/use and value added taxes payable | 30,478 | 23,768 |
Fulfillment, freight, and duties | 35,042 | 22,269 |
Royalties payable | 10,492 | 10,097 |
Accrued rent and occupancy | 10,699 | 8,246 |
Customer deposit liability and deferred revenue | 10,182 | 7,568 |
Accrued legal fees | 6,198 | 2,546 |
Other | 30,358 | 21,402 |
Total accrued expenses and other liabilities | $ 285,095 | $ 285,771 |
LEASES - Schedule of Rights-of-
LEASES - Schedule of Rights-of-Use Assets and Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Assets: | ||
Right-of-use assets | $ 292,089 | $ 287,440 |
Liabilities: | ||
Current operating lease liabilities | 63,918 | 62,267 |
Long-term operating lease liabilities | 277,112 | 269,769 |
Total operating lease liabilities | $ 341,030 | $ 332,036 |
LEASES - Schedule of Lease Cost
LEASES - Schedule of Lease Costs and Other Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Leases [Abstract] | ||||
Operating lease cost | $ 20,409 | $ 18,393 | $ 40,654 | $ 36,592 |
Short-term lease cost | 5,214 | 4,192 | 10,013 | 7,234 |
Variable lease cost | 15,944 | 14,570 | 23,307 | 20,118 |
Total lease costs | $ 41,567 | $ 37,155 | $ 73,974 | $ 63,944 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | Jun. 30, 2024 | Jun. 30, 2023 |
Leases [Abstract] | ||
Weighted average remaining lease term (in years) | 6 years 7 months 6 days | 6 years 7 months 6 days |
Weighted average discount rate (in percent) | 6.30% | 4.10% |
LEASES - Schedule of Maturities
LEASES - Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
2024 (remainder of year) | $ 36,311 | |
2025 | 75,419 | |
2026 | 64,100 | |
2027 | 55,168 | |
2028 | 46,099 | |
Thereafter | 144,622 | |
Total future minimum lease payments | 421,719 | |
Less: imputed interest | (80,689) | |
Total operating lease liabilities | $ 341,030 | $ 332,036 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value of the Company's Outstanding Borrowings (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Carrying Value | Line of Credit | Term Loan B Facility | ||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Outstanding borrowings | $ 685,000 | $ 820,000 |
Carrying Value | Line of Credit | Revolving Facility | ||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Outstanding borrowings | 190,000 | 190,000 |
Carrying Value | 2029 Notes | Senior Notes | ||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Outstanding borrowings | 350,000 | 350,000 |
Carrying Value | 2031 Notes | Senior Notes | ||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Outstanding borrowings | 350,000 | 350,000 |
Fair Value | Line of Credit | Term Loan B Facility | ||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Outstanding borrowings | 690,994 | 824,100 |
Fair Value | Line of Credit | Revolving Facility | ||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Outstanding borrowings | 190,000 | 190,000 |
Fair Value | 2029 Notes | Senior Notes | ||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Outstanding borrowings | 318,682 | 313,987 |
Fair Value | 2031 Notes | Senior Notes | ||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Outstanding borrowings | $ 304,518 | $ 296,742 |
FAIR VALUE MEASUREMENTS - Impai
FAIR VALUE MEASUREMENTS - Impairments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total asset impairments | $ 24,081 | $ 0 | ||
HEYDUDE, Prepaid Assets | ||||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Information technology systems impairment | 17,400 | |||
HEYDUDE, Intangible Assets | ||||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Information technology systems impairment | 800 | |||
HEYDUDE Brand | ||||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Right-of-use assets impairment | 5,500 | |||
Crocs Brand | ||||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Right-of-use assets impairment | 400 | |||
Level 3 | Fair Value | Fair Value Measurements, Nonrecurring | ||||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Information technology systems impairment | $ 0 | $ 0 | 18,172 | 0 |
Right-of-use assets impairment | 0 | 0 | 5,909 | 0 |
Total asset impairments | $ 0 | $ 0 | $ 24,081 | $ 0 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2024 USD ($) | Jun. 30, 2024 USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Foreign currency cash flow hedge gain (loss) reclassified to earnings, net | $ 0.3 | $ 0.6 |
Foreign currency cash flow hedge gain to be reclassified during next 12 months | $ 0.3 | $ 0.3 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Schedule of Fair Value of Derivative Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Foreign Currency Derivatives | ||
Derivative asset, statement of financial position [Extensible Enumeration] | Prepaid expenses and other assets | Prepaid expenses and other assets |
Derivative liability, statement of financial position [Extensible Enumeration] | Accrued expenses and other liabilities | Accrued expenses and other liabilities |
Level 2 | ||
Foreign Currency Derivatives | ||
Derivative asset, net foreign currency forward contract derivatives | $ 992 | $ 1,445 |
Derivative liability, net foreign currency forward contract derivatives | (464) | (15) |
Level 2 | Not Designated as Hedging Instrument | ||
Foreign Currency Derivatives | ||
Derivative asset, gross forward foreign currency exchange contracts | 922 | 2,850 |
Derivative liability, gross forward foreign currency exchange contracts | (665) | (1,333) |
Level 2 | Designated as Hedging Instrument | ||
Foreign Currency Derivatives | ||
Derivative asset, gross forward foreign currency exchange contracts | 1,494 | 2,992 |
Derivative asset, netting of counterparty contracts | (502) | (1,547) |
Derivative liability, gross forward foreign currency exchange contracts | (966) | (1,562) |
Derivative liability, netting of counterparty contracts | 502 | 1,547 |
Level 2 | Designated as Hedging Instrument | Cash flow foreign currency contracts | ||
Foreign Currency Derivatives | ||
Derivative asset, gross forward foreign currency exchange contracts | 572 | 142 |
Derivative liability, gross forward foreign currency exchange contracts | $ (301) | $ (229) |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS - Schedule of Derivative Financial Instruments Notional Amounts on Outstanding Positions (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Derivatives - Fair Value [Line Items] | ||
Notional | $ 234,467 | $ 185,009 |
Fair Value | 528 | 1,430 |
Not Designated as Hedging Instrument | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 152,012 | 105,879 |
Fair Value | 257 | 1,517 |
Designated as Hedging Instrument | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 82,455 | 79,130 |
Fair Value | 271 | (87) |
Singapore Dollar | Not Designated as Hedging Instrument | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 37,742 | 41,441 |
Fair Value | 101 | 1,507 |
Euro | Not Designated as Hedging Instrument | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 17,770 | 30,757 |
Fair Value | 102 | 1,343 |
Euro | Designated as Hedging Instrument | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 19,843 | 40,014 |
Fair Value | 402 | (186) |
British Pound Sterling | Not Designated as Hedging Instrument | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 10,182 | 17,662 |
Fair Value | (172) | (835) |
British Pound Sterling | Designated as Hedging Instrument | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 20,649 | 22,320 |
Fair Value | 78 | 135 |
South Korean Won | Not Designated as Hedging Instrument | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 21,308 | 9,759 |
Fair Value | (92) | (428) |
South Korean Won | Designated as Hedging Instrument | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 5,398 | 11,093 |
Fair Value | 92 | (42) |
Indian Rupee | Not Designated as Hedging Instrument | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 14,537 | 5,291 |
Fair Value | (60) | (23) |
Indian Rupee | Designated as Hedging Instrument | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 3,786 | 5,703 |
Fair Value | (9) | 6 |
Japanese Yen | Not Designated as Hedging Instrument | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 13,604 | 969 |
Fair Value | 667 | (47) |
Other currencies | Not Designated as Hedging Instrument | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 36,869 | 0 |
Fair Value | (289) | 0 |
Chinese Yuan | Designated as Hedging Instrument | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 32,779 | 0 |
Fair Value | $ (292) | $ 0 |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS - Schedule of Gain (Losses) from Foreign Currency Transactions and Derivative Contracts (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Derivatives - Fair Value [Line Items] | ||||
Foreign currency gains (losses), net | $ (1,323) | $ 551 | $ (3,596) | $ 148 |
Not Designated as Hedging Instrument | ||||
Derivatives - Fair Value [Line Items] | ||||
Foreign currency transaction gains (losses) | (1,513) | 402 | (2,933) | (369) |
Foreign currency forward exchange contracts gains (losses) | 190 | 149 | (663) | 517 |
Foreign currency gains (losses), net | $ (1,323) | $ 551 | $ (3,596) | $ 148 |
BORROWINGS - Schedule of Other
BORROWINGS - Schedule of Other Term Borrowings (Details) - USD ($) | Jun. 30, 2024 | Jan. 31, 2024 | Dec. 31, 2023 | Aug. 31, 2021 | Mar. 31, 2021 |
Debt Instrument [Line Items] | |||||
Total face value of long-term borrowings | $ 1,575,000,000 | $ 1,710,000,000 | |||
Unamortized issuance costs | 45,434,000 | 49,004,000 | |||
Current portion of long-term borrowings | 0 | 23,328,000 | |||
Total long-term borrowings | 1,529,566,000 | 1,640,996,000 | |||
Senior Notes | 2029 Notes | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 350,000,000 | $ 350,000,000 | |||
Stated Interest Rate | 4.25% | 4.25% | |||
Effective Interest Rate | 4.64% | ||||
Total face value of long-term borrowings | $ 350,000,000 | 350,000,000 | |||
Senior Notes | 2031 Notes | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 350,000,000 | $ 350,000,000 | |||
Stated Interest Rate | 4.125% | 4.125% | |||
Effective Interest Rate | 4.35% | ||||
Total face value of long-term borrowings | $ 350,000,000 | 350,000,000 | |||
Line of Credit | Term Loan B Facility | |||||
Debt Instrument [Line Items] | |||||
Total face value of long-term borrowings | 685,000,000 | $ 820,000,000 | 820,000,000 | ||
Current portion of long-term borrowings | 0 | 20,000,000 | |||
Line of Credit | Revolving Facility | |||||
Debt Instrument [Line Items] | |||||
Total face value of long-term borrowings | $ 190,000,000 | $ 190,000,000 |
BORROWINGS - Credit Facilities
BORROWINGS - Credit Facilities (Details) | 1 Months Ended | 6 Months Ended | ||||
Feb. 17, 2022 USD ($) | Jul. 31, 2019 USD ($) | Jun. 30, 2024 USD ($) facility | Feb. 29, 2024 USD ($) | Jan. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | |
Revolving Credit Facilities and Bank Borrowings | ||||||
Total face value of long-term borrowings | $ 1,575,000,000 | $ 1,710,000,000 | ||||
Number of credit facility | facility | 1 | |||||
Revolving Facility | Line of Credit | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Total face value of long-term borrowings | $ 190,000,000 | 190,000,000 | ||||
Revolving Facility | Senior Revolving Credit Facility | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Borrowing capacity under revolving credit facility | $ 750,000,000 | |||||
Additional borrowing under credit agreement | $ 250,000,000 | |||||
Minimum interest coverage ratio | 3 | |||||
Minimum borrowing availability for certain acquisitions | $ 40,000,000 | |||||
Line of credit facility, current borrowing capacity | 750,000,000 | |||||
Line of credit facility, remaining borrowing capacity | 558,700,000 | 558,700,000 | ||||
Revolving Facility | Senior Revolving Credit Facility | From Quarter Ended March 31, 2022 to Quarter Ended December 31, 2023 | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Maximum leverage coverage ratio | 4 | |||||
Revolving Facility | Senior Revolving Credit Facility | From Quarter Ended March 31, 2024 | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Maximum leverage coverage ratio | 3.75 | |||||
Revolving Facility | Senior Revolving Credit Facility | From Quarter Ended June 30, 2024 | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Maximum leverage coverage ratio | 3.50 | |||||
Revolving Facility | Senior Revolving Credit Facility | From Quarter Ended September 30, 2024 | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Maximum leverage coverage ratio | 3.25 | |||||
Revolving Facility | Senior Revolving Credit Facility | Federal Funds Open Rate | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (in percent) | 0.25% | |||||
Revolving Facility | Senior Revolving Credit Facility | SOFR | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (in percent) | 1% | |||||
Revolving Facility | Senior Revolving Credit Facility | SOFR | Minimum | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (in percent) | 1.40% | |||||
Revolving Facility | Senior Revolving Credit Facility | SOFR | Minimum | Debt Instrument, Redemption, Period One | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (in percent) | 1.35% | |||||
Revolving Facility | Senior Revolving Credit Facility | SOFR | Maximum | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (in percent) | 2.025% | |||||
Revolving Facility | Senior Revolving Credit Facility | SOFR | Maximum | Debt Instrument, Redemption, Period One | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (in percent) | 1.975% | |||||
Revolving Facility | Senior Revolving Credit Facility | Base Rate | Minimum | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (in percent) | 0.25% | |||||
Revolving Facility | Senior Revolving Credit Facility | Base Rate | Maximum | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (in percent) | 0.875% | |||||
Revolving Facility | Senior Revolving Credit Facility | Simple Secured Overnight Financing Rate (SOFR) | Minimum | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (in percent) | 1.35% | |||||
Revolving Facility | Senior Revolving Credit Facility | Simple Secured Overnight Financing Rate (SOFR) | Maximum | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (in percent) | 1.975% | |||||
Revolving Facility | Revolving Facility | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Outstanding letters of credit | 1,300,000 | |||||
Revolving Facility | Asia Pacific Citibank Revolving Credit Facility | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Line of credit facility, current borrowing capacity | 15,000,000 | |||||
Outstanding borrowings | 0 | 3,300,000 | ||||
Term Loan B Facility | Line of Credit | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Borrowing capacity under revolving credit facility | $ 2,000,000,000 | |||||
Total face value of long-term borrowings | 685,000,000 | $ 820,000,000 | 820,000,000 | |||
Line of credit facility, remaining borrowing capacity | 0 | |||||
Term Loan B Facility | SOFR | Line of Credit | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (in percent) | 2.25% | |||||
Term Loan B Facility | Base Rate | Line of Credit | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (in percent) | 1.25% | |||||
Term Loan B Credit Agreement | Line of Credit | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Borrowing capacity under revolving credit facility | $ 820,000,000 | |||||
Accounts Payable | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Interest payable | $ 10,600,000 | $ 10,700,000 |
BORROWINGS - Senior Notes Issua
BORROWINGS - Senior Notes Issuance (Details) - Senior Notes - USD ($) | 1 Months Ended | ||
Aug. 31, 2021 | Mar. 31, 2021 | Jun. 30, 2024 | |
2029 Notes | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 350,000,000 | $ 350,000,000 | |
Interest rate, stated percentage (in percent) | 4.25% | 4.25% | |
2029 Notes | Debt Instrument, Redemption, Period One | |||
Debt Instrument [Line Items] | |||
Redemption price, percentage (in percent) | 100% | ||
2029 Notes | Debt Instrument, Redemption, Period Two | |||
Debt Instrument [Line Items] | |||
Redemption price, percentage (in percent) | 100% | ||
2029 Notes | Debt Instrument, Redemption, Period Three | |||
Debt Instrument [Line Items] | |||
Redemption price, percentage (in percent) | 104.25% | ||
Percentage of principal amount redeemable (in percent) | 40% | ||
2031 Notes | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 350,000,000 | $ 350,000,000 | |
Interest rate, stated percentage (in percent) | 4.125% | 4.125% | |
Guarantor | $ 25,000,000 | ||
2031 Notes | Debt Instrument, Redemption, Period One | |||
Debt Instrument [Line Items] | |||
Redemption price, percentage (in percent) | 100% | ||
2031 Notes | Debt Instrument, Redemption, Period Two | |||
Debt Instrument [Line Items] | |||
Redemption price, percentage (in percent) | 100% | ||
2031 Notes | Debt Instrument, Redemption, Period Three | |||
Debt Instrument [Line Items] | |||
Redemption price, percentage (in percent) | 104.125% | ||
Percentage of principal amount redeemable (in percent) | 40% |
COMMON STOCK REPURCHASE PROGR_2
COMMON STOCK REPURCHASE PROGRAM (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Class of Stock [Line Items] | ||||
Stock repurchased during period | $ 176,507 | $ 176,507 | ||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Stock repurchased during period (in shares) | 1,170,000 | 0 | 1,170,000 | 0 |
Stock repurchased during period | $ 175,000 | $ 175,000 | ||
Remaining authorization to repurchase common stock | $ 700,000 | $ 700,000 |
REVENUES (Details)
REVENUES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 1,111,502 | $ 1,072,367 | $ 2,050,135 | $ 1,956,533 |
Crocs Brand | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 913,989 | 832,950 | 1,657,806 | 1,481,728 |
Crocs Brand | Wholesale | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 435,281 | 407,342 | 897,284 | 817,905 |
Crocs Brand | Direct-to-consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 478,708 | 425,608 | 760,522 | 663,823 |
Crocs Brand | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 488,715 | 474,558 | 871,629 | 825,867 |
Crocs Brand | North America | Wholesale | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 173,987 | 181,085 | 354,325 | 353,140 |
Crocs Brand | North America | Direct-to-consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 314,728 | 293,473 | 517,304 | 472,727 |
Crocs Brand | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 425,274 | 358,392 | 786,177 | 655,861 |
Crocs Brand | International | Wholesale | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 261,294 | 226,257 | 542,959 | 464,765 |
Crocs Brand | International | Direct-to-consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 163,980 | 132,135 | 243,218 | 191,096 |
HEYDUDE Brand | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 197,513 | 239,417 | 392,329 | 474,805 |
HEYDUDE Brand | Wholesale | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 113,829 | 148,825 | 248,582 | 316,688 |
HEYDUDE Brand | Direct-to-consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 83,684 | $ 90,592 | $ 143,747 | $ 158,117 |
INCOME TAXES -Schedule of Incom
INCOME TAXES -Schedule of Income Tax Expense and Effective Tax Rates (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | ||||
Income before income taxes | $ 296,425 | $ 277,242 | $ 490,454 | $ 469,008 |
Income tax expense | $ 67,518 | $ 64,830 | $ 109,093 | $ 107,053 |
Effective tax rate | 22.80% | 23.40% | 22.20% | 22.80% |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |||||
Increase in income tax expense | $ 2.7 | $ 2 | |||
Effective tax rate | 22.80% | 23.40% | 22.20% | 22.80% | |
Decrease in effective income tax rate | 0.60% | 0.60% | |||
Unrecognized tax benefits | $ 547.2 | $ 547.2 | $ 556.5 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Numerator: | ||||
Net income | $ 228,907 | $ 212,412 | $ 381,361 | $ 361,955 |
Denominator: | ||||
Weighted average common shares outstanding - basic (in shares) | 60,320 | 62,037 | 60,442 | 61,937 |
Plus: Dilutive effect of stock options and unvested restricted stock units (in shares) | 446 | 566 | 468 | 679 |
Weighted average common shares outstanding - diluted (in shares) | 60,766 | 62,603 | 60,910 | 62,616 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 3.79 | $ 3.42 | $ 6.31 | $ 5.84 |
Diluted (in dollars per share) | $ 3.77 | $ 3.39 | $ 6.26 | $ 5.78 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Jun. 30, 2024 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase commitments with third party manufacturers | $ 234.9 |
Estimate of possible loss | $ 2.3 |
OPERATING SEGMENTS AND GEOGRA_3
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION - Narrative (Details) | 6 Months Ended |
Jun. 30, 2024 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
OPERATING SEGMENTS AND GEOGRA_4
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION - Schedule of Information Related to Reportable Operating Business Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 1,111,502 | $ 1,072,367 | $ 2,050,135 | $ 1,956,533 |
Income from operations | 325,738 | 318,489 | 552,167 | 553,417 |
Foreign currency gains (losses), net | (1,323) | 551 | (3,596) | 148 |
Interest income | 1,126 | 548 | 1,542 | 719 |
Interest expense | (29,161) | (43,063) | (59,724) | (85,700) |
Other income, net | 45 | 717 | 65 | 424 |
Income before income taxes | 296,425 | 277,242 | 490,454 | 469,008 |
Depreciation and amortization | 17,544 | 12,644 | 33,705 | 25,780 |
Crocs Brand | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 913,989 | 832,950 | 1,657,806 | 1,481,728 |
HEYDUDE Brand | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 197,513 | 239,417 | 392,329 | 474,805 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,111,502 | 1,072,367 | 2,050,135 | 1,956,533 |
Operating Segments | Crocs Brand | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 913,989 | 832,950 | 1,657,806 | 1,481,728 |
Income from operations | 355,532 | 317,684 | 619,657 | 535,691 |
Depreciation and amortization | 8,861 | 7,099 | 17,397 | 14,536 |
Operating Segments | HEYDUDE Brand | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 197,513 | 239,417 | 392,329 | 474,805 |
Income from operations | 42,367 | 65,509 | 82,513 | 142,129 |
Depreciation and amortization | 4,542 | 3,562 | 8,758 | 7,068 |
Enterprise corporate | ||||
Segment Reporting Information [Line Items] | ||||
Income from operations | (72,161) | (64,704) | (150,003) | (124,403) |
Depreciation and amortization | $ 4,141 | $ 1,983 | $ 7,550 | $ 4,176 |