Crocs Stock

Crocs, Inc. operates as a footwear company worldwide.

The company and its consolidated subsidiaries are engaged in the design, development, worldwide marketing, distribution, and sale of casual lifestyle footwear and accessories for all. The company strives to be the world leader in innovative casual footwear.

The company owns 100% of the equity of a privately-owned casual footwear brand business (‘HEYDUDE’), which is engaged in the business of distributing and selling casual footwear under the brand name ‘HEYDUDE.’ The majority of HEYDUDE sales are in the United States.

The company has two reportable operating segments: the Crocs Brand and the HEYDUDE Brand. Within the regions in which the company operates, the company prioritizes six core markets for the Crocs Brand where the greatest opportunities for growth exist: (i) China, (ii) India, (iii) Japan, (iv) South Korea, (v) the U.S., and (vi) Western Europe.

Strategy

The company’s growth framework is driven by five strategic areas of focus: growing digital sales; gaining sandals market share for the Crocs Brand; increasing awareness and distribution for the HEYDUDE Brand; growth opportunities internationally; and ongoing product and marketing innovation.

Products

Since the company first introduced a single-style clog in six colors in 2002, the company has grown to be a world leader of casual footwear for women, men, and children. The company offers a broad portfolio of all-season products, while remaining true to the company’s core casual footwear heritage.

Crocs Brand

Recognized globally for the company’s unmistakable iconic molded clog silhouette, the company has taken the successful formula of a simple design aesthetic, paired it with modern comfort, and expanded into a wide variety of casual footwear products, including sandals—wedges, flips, and slides—that meet the needs of the whole family.

The vast majority of Crocs shoes feature Croslite material, a proprietary, revolutionary technology that gives each pair of shoes the soft, comfortable, lightweight, non-marking, and odor-resistant qualities that the company’s fans know and love. The company also uses Croslite material formulations in connection with material technologies used in the company’s visible comfort collections, such as the company’s LiteRide products. The company’s products containing LiteRide feature comfort-focused, proprietary foam insoles which are soft, lightweight, and resilient.

HEYDUDE Brand

The HEYDUDE Brand offers shoes with a versatile silhouette with many wearing occasions that focus on casualization, comfort-led functionality, and personalization. The HEYDUDE Brand utilizes leading technologies, including a flex-and-fold outsole and ergonomic insole. The shoes are known for being lightweight, flexible, and soft, with design and functional flexibility for convenience.

Marketing

Each season, the company focuses on presenting compelling brand stories and experiences for the company’s new product introductions, as well as its ongoing core products. The company employs social and digital marketing centered on showcasing its clog and sandal silhouettes and the company’s Jibbitz charms for the Crocs Brand and the company’s versatile loafer silhouette for the HEYDUDE Brand. The company continues to invest in globally integrated marketing campaigns, as well as designer, celebrity and influencer, and brand partnerships, ranging from popular designers like Salehe Bembury to a wide range of well-known brands, such as Mossy Oak, Levi’s, and Taco Bell.

Distribution Channels

The broad appeal of the company’s footwear has allowed the company to market its products in more than 80 countries through two distribution channels: wholesale and direct-to-consumer (‘DTC’). The company’s wholesale channel includes domestic and international multi-brand retailers, mono-branded partner stores, e-tailers, and distributors; the company’s DTC channel includes e-commerce, in which the company sells through company-operated e-commerce sites and third-party marketplaces, and retail, in which the company sells through company-operated stores.

Wholesale Channel

During the years ended December 31, 2023, 52.0% of the company’s consolidated revenues were derived through its wholesale channel. The company’s wholesale channel includes domestic and international, multi-brand, brick-and-mortar retailers, e-tailers, partner store operators, and international distributors. Brick-and-mortar customers typically include family footwear retailers, national and regional retail chains, sporting goods stores, and independent footwear retailers.

Outside the U.S., the company uses distributors when such arrangements are economically preferable to direct sales.

Direct-to-Consumer Channel

The company’s DTC channel includes company-operated e-commerce sites, third-party marketplaces, company-operated full-price retail stores, outlet stores, and kiosks/store-in-store locations. During the year ended December 31, 2023, 48.0% of the company’s consolidated revenues were derived through its DTC channel.

E-commerce

As of December 31, 2023, the company offered its products through 16 company-operated e-commerce sites worldwide and also on third-party marketplaces. The company’s e-commerce presence facilitates a greater connection with its consumers and provides the company with an opportunity to educate them about its products and brand. The company continues to leverage increasingly sophisticated digital marketing activities to enhance the consumer experience and drive sales, thereby benefiting from the continued migration of consumers to online shopping.

Retail

With the continued worldwide consumer shift toward e-commerce, the company carefully manages its retail fleet, especially full-priced retail stores. As of December 31, 2023, the company had 349 and 14 company-operated stores for the Crocs Brand and HEYDUDE Brand, respectively.

The company-operated full-price retail stores allow the company to effectively showcase the full extent of its product range to consumers and provide the company with the opportunity to interact with those consumers directly. The company has full-price Crocs Brand retail stores.

The company-operated outlet stores allow the company to sell discontinued and overstocked merchandise directly to consumers at discounted prices. The company also sells full-priced products in its outlet stores, as well as built-for-outlet products. The company has Crocs Brand outlet stores. The company also has 5 HEYDUDE Brand outlet stores and HEYDUDE Brand temporary clearance stores.

The company-operated kiosks and store-in-store locations allow the company to market specific product lines, with flexibility to tailor products to consumer preferences in shopping malls and other high foot-traffic areas. The company has Crocs Brand kiosks and store-in-store locations.

Distribution and Logistics

As of December 31, 2023, the company principally stored its finished goods inventory in company-operated warehouses and distribution and logistics facilities located in the U.S. and the Netherlands. During 2023, the company further expanded its U.S. distribution centers in Nevada for the HEYDUDE Brand to increase distribution capacity. The company also utilized third-party operated distribution centers located in the United States, Japan, China, Australia, Korea, Singapore, India, Brazil, and the United Kingdom. As of December 31, 2023, the company-operated warehouse and distribution facilities provided the company with 3.4 million square feet, and the company’s third-party operated distribution facilities provided the company with 0.9 million square feet, with additional area available based on inventory levels. The company also ships directly to certain of its wholesale customers from its third-party manufacturers, and certain distributors pick up orders directly from the company’s third-party manufacturers.

Intellectual Property and Trademarks

The company’s major trademarks for the Crocs Brand include the Crocs logo and the Crocs word mark, both of which are registered or pending registration in the U.S., the European Union, Japan, Taiwan, China, and Canada, among other countries. The company’s major trademarks for the HEYDUDE Brand include the HEYDUDE logo and word mark. The HEYDUDE word mark is registered in the U.S., the European Union, China, and Singapore, among others. Protection for the HEYDUDE logo has been filed in the U.S. and the company intends to extend to foreign jurisdictions within the required time period. The company also has registrations or pending trademark applications for other marks and logos in various countries around the world.

In the U.S., the company’s patents are generally in effect for up to 20 years from the date of filing the patent application. The company considers the formulations of the materials used to produce the company’s Crocs Brand footwear covered by the company’s trademark Croslite and LiteRide, among others, valuable trade secrets.

Research, Design and Development Expenses

The company incurred expenses of $21.4 million in research, design, and development activities for the year ended December 31, 2023.

History

Crocs, Inc. was founded in 1999. The company was incorporated in 2005.