Crocs, Inc. (NASDAQ:CROX) Q4 2023 Earnings Call Transcript

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So we’re really focused on as you mentioned letting it be a pull model and if we are a little bit short on some things and it sells out fast enough, right? And that’s more demand for next year. So that’s kind of how we’re thinking about it. That’s how we think about it existing on the Crocs side.

Andrew Rees : Great. So your second question, so look at me my flippant answer is important right? Like we have great confidence in on both the knowledge of the business, the commercial acumen, her understanding of kind of the consumer trends, beyond her abilities as a CFO. So, that’s important. I would say this transition is part of the succession planning that we’ve been doing for some time. We do it for all of us senior leaders. We do that in conjunction with the Board as you’d expect. And we have a very thorough process around this. So, it’s definitely something we take very seriously and we think this is, listen this, Michelle is retiring and we wish her well. I mean she’s done an amazing job and as I also said in my prepared remarks, she has been doing this in the footwear industry for a long time and have some other things that she would like to like spend a bit more time doing. So, I think it’s a very natural transition and very well planned.

Sam poser : Thanks. And then I just have a real quick follow-up for Anne, it was just somebody else’s question about, comfort that the Hated business would grow in the back half of the year. How much of the sort of the way this looks like it’s going to flow is retailers and you overreacted, put too much product into the marketplace at the beginning of last year given sort of the way things were in the middle of this year when they were writing spring retailers over probably over reacted and may not have written enough. And now they’re sort of seeing what’s going on and then that started to normalize as the orders move throughout the year. Am I thinking about that correctly?

Andrew Rees : I think mostly Sam. Yeah, that’s mostly a very thoughtful understanding of the marketplace.

Sam poser : Thanks very much. Good luck.

Andrew Rees : Thanks, Sam.

Anne Mehlman : Thanks, Sam.

Operator: The next question comes from Aubrey Tianello of BNP Paribas. Please go ahead.

Aubrey Tianello: Hey, good morning. Thanks for taking the question. I wanted to follow up on Crocs North America. You mentioned changing the distribution model with Amazon. Could you maybe give a little more detail on what’s changing? How those changes was with the P&L? And also what the timeframes for that?

Anne Mehlman : Yeah, yeah great question. So as we talked after our third call, I think taking a step back really at the highest level globally, we are trying to have more brand control in global marketplaces where our brand is sold. So we talk about marketplaces that’s on a digital front and those maybe Amazon or others. And so the best way to do that is for us to sell directly to the consumer on those marketplaces. So it’s direct-to-consumer sales versus a wholesale sales. So the dynamics is how it flows through the P&L. It’s a higher gross margin, higher Sg&A, higher revenue, but it’s really not – that’s not the focus point. The focus is just controlling our brand and how consumers should – how it shows up to the consumer and making sure that we provide a consistent and best experience for our consumer.

I would say, this distribution model performs – has been performing in line with our expectations these changes. And so, we will expect to continue down this path this year.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Andrew Rees for any closing remarks.

Andrew Rees: Thank you. I just wanted to express our sincere appreciation for everybody’s joining us today and their interest in our company. So, thank you so much and have a great day.

Operator: The conference is now concluded. Thank you for attending today’s presentation and you may now disconnect.

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