Highlights from Crocs Q413 Earnings Conference Call - Crocs (NASDAQ:CROX)

Below are some highlights from Crocs'

CROX

fourth-quarter earnings conference call:

Crocs aim will be a sharper focus on earnings growth with less emphasis on top-line growth.
Moderated the pace of investments in new retail stores as well as consolidating some existing locations.
Given the transition that the company will be going through, they will not be providing earnings guidance in 2014.
- Crocs is in the process of recruiting a new Chief Executive Officer
Global retail comp store sales were down 4% in the fourth quarter and down 3% for the full year.
Internet sales in the quarter were up 10% and wholesale revenues for the quarter were up 4%.
Full-year revenues increased primarily due to a 42% increase in footwear unit sales, driven by wholesale doors, expansion, and market recovery.
- The traditional clog continues to generate the majority of footwear sales in Europe, making up approximately 70% of total footwear unit sales.
Gross margin decreased year over year by 180 basis points to 52.3%.
- The decline in gross margin is primarily driven by rising product costs, the evolution of our changing product assortment, and the continual impact of unfavorable currency trends.
In the full year of 2013, selling, general, and administrative expenses increased $89 million, or 19%, to $549 million compared with the full year 2012.
- About $20 million of this increase was associated with the nonrecurring, unusual, or infrequent items in Q4.
- Retail asset impairments of $11 million for 59 stores, of which 35 are in Europe and 22 are in Americas.
- Expenses and accelerated depreciation associated with our new ERP system of $2 million.
- Contingency accruals and other changes of $7 million related to certain legal matters.
Excluding nonrecurring, unusual, or infrequent items, non-GAAP gross profit for the year was up $15 million.
A total of $27 million for certain unusual tax related items impacted the quarter
- Repatriation efforts and valuation allowances for deferred tax assets in the United States.
Despite conservative at-once ordering and inventory levels from wholesale partners, for the year Crocs experienced a 7% increase in wholesale revenue on a constant currency basis.

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