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» Crocs' CEO Discusses Q1 2011 Results - Earnings Call Transcript
John McCarvelThank you. Thank you for joining us this afternoon. With me on the call is our Chief Financial Officer, Jeff Lasher. In a moment, Jeff will go through our first quarter financials in detail. I’d like to begin with a review of our highlights from the recent quarter and then discuss some of the factors that we see impacting our business over the remainder of the year. And then finally, having just spent a good deal of time on the road, I would like to give everyone more insight into our global operations and the state of our business in international markets. We are very pleased with the strength of our first quarter results. Retailer and consumer response to our expanded spring line is very positive, driving sales gains across our three distribution channels in Asia and the Americas, combined with increases in our European consumer direct business. In total, sales increased 20% in the first quarter of 2012, on top of a 36% increase in the same quarter a year ago. From a product perspective, sales continue to be very broad-based, with new introductions representing approximately 38% of first quarter sales, while non-clog silhouettes made up more than half of the quarterly volume. Our top-performing styles included our A-Leigh collection, women’s flats and wedges including our new Springi product, Duet Sport line and our Crosmesh series of products. As I just mentioned, our retail and e-commerce channels were up in all three regions. We are pleased to share our retail store sale on a global basis in more detail starting this quarter. Comp store sales increased 10% in Q1, and our direct-to-consumer channel is providing an avenue to showcase our lifestyle products to new and existing consumers. They are obviously voting yes. Jeff will go into more detail in retail metrics in his portion of the presentation.
Our top line results are certainly a good start to the year, and where we expected to be when we developed and sold in our most comprehensive line of footwear ever. In addition to securing more shelf space with several key wholesale partners and selectively expanding door count, we are confident that we are gaining important market share and mind share with consumers. This is also being noticed by our wholesale partners.Our new Crocs inside marketing campaign has been successful, connecting with existing customers who are adding more Crocs styles to their closet and new consumers are being drawn to the brand for the first time by the wider selection of great-looking, casual lifestyle footwear. As we move deeper into our busiest selling period, we are very comfortable with the overall pace of our business and very pleased with how the first half of the year is shaping up. We’ve evolved our business model to be less at once, but still have the culture and abilities to support our wholesale partners and direct-to-consumer channel with additional products. International expansion is on plan. Some new product selections are exceeding expectation. New stores are performing well and the global expansion of our internet sites are almost complete, with Japan, Korea, Poland and Brazil slated for completion this year. Looking to the back half of the year, we remain encouraged about our ability to expand the brand’s relevancy at retail in fall-winter. We’re cognizant of the near-term challenges facing the footwear sector with a short selling season in the fall holiday ‘11 season and the carry-over of high inventory level in the wholesale channel. We continue to contend with additional impact of a stronger U.S. dollar. Read the rest of this transcript for free on seekingalpha.com