Crocs, Inc.

Good day and welcome to the Crocs Inc. First Quarter 2026 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Abigail Ritter, Investor Relations and Strategic Finance for Crocs, Inc. Please go ahead.

Good morning, and thank you for joining us to discuss Crocs, Inc. First Quarter 2026 results. With me today are Andrew Reese, Chief Executive Officer, and Patrick Reagan, Executive Vice President and Chief Financial Officer. Following their prepared remarks, we will open the call for your questions, which we ask you limit to one per caller. Before we begin, I would like to remind you that some of the information provided on this call is forward-looking and, accordingly, is subject to the safe harbor provisions of the federal securities laws. These statements involve known and unknown risks, uncertainties, and other factors which may cause our actual results, performance, or achievements to differ materially. Please refer to our most recent annual report on Form 10-K, quarterly report on Form 10-Q, and other reports filed with the SEC for more information on these risks and uncertainties. Certain financial metrics that we refer to as adjusted or non-GAAP are non-GAAP measures. A reconciliation of these amounts to their GAAP counterparts is contained in the press release we issued earlier this morning. All revenue growth rates will be cited on a constant currency basis unless otherwise stated. At this time, I'll turn the call over to Andrew Rees, Crocs Inc. Chief Executive Officer.

Thank you, Abby, and good morning, everyone. Thank you for joining us today. We delivered a better-than-expected first quarter, fueled by broad consumer relevance for both of our brands. Patrick will discuss our quarterly performance in more detail, but first I will share a few financial highlights and a review of our brand strategies. For the first quarter of 2026, We delivered better than expected enterprise revenue of $921 million, with the Crofts brand down 2% and Hey Dude brand down 13% as we work to return both of our brands to growth. Healthy direct-to-consumer growth, including Crofts brand up 11% despite pulling back on promotional activity, and Hey Dude up 8% despite lower performance marketing spent. International revenue for the Crofts brand was up 7% on a reported basis, consistent with our expectations, despite an unanticipated impact of the war in the Middle East. Best-in-class inventory management with total footwear units down high single digits and overall inventory turning up more than four times. Our powerful value creation model continues to support meaningful return of cash to shareholders in the form of repurchases. With second quarter repurchases now underway, quarter to date, we have brought back 800,000 shares. Now, turning to a discussion by brand and starting with Crocs. We had a strong start to the year as consumers responded positively to product newness across all categories. We continue to make excellent progress against our five strategic pillars. First, we are driving brand relevance globally as a clogged market share leader. During the quarter, our Focus Clog franchises, Crocband, Crafted, and Echo performed well, enabling diversification of our overall Clog portfolio. The reintroduction of Crocband has been well-received, with strengths seen across channels, colors, and iterations. The Crafted franchise is building globally, and consumer response has been strong, with canvas and floral embroidery offers. We continue to scale our existing Echo franchise with new Echo RO colorways and expanded distribution. Within our Classics franchise, we are prioritizing maintaining tight inventory control and driving further segmentation across our key partners in North America. Second, we are scaling our product pillars outside of clogs through new category expansion. Our sandal business started the year off strong. and we expect this pillar to approach a half billion dollars in revenue this year, up double digits from 2025. Our three core style franchises, Getaway, Brooklyn, and Miami, are capturing incremental shelf space and winning with consumers. Earlier this spring, we introduced our personalizable two-strap Saturday Sandal, a cross-channel, and saw exceptional response from both consumers and retailers. Moving beyond sandals, we launched the classic ballet flat, which saw a notable sellout globally. In response, we're chasing supply, and we further strengthened our assortment within this trending style. Momentum was further amplified by our first quarter Love Shack Fancy collaboration, which sold out completely. Our broader personalization pillar saw standout performance within bags and accessories. during the quarter led by the Disney collaboration featuring Mickey Mouse on a number of products. We also saw continued strength in elevated gibbets during the quarter. Third, we are fueling consumer engagement through disruptive social and digital marketing. In February, we kicked off a multi-year global partnership with a Lego brand by launching the highly disruptive Lego Brick Clog which quickly became one of our best performing partnerships on social media and drove significant consumer engagement and digital traffic. Also in February, we released Charm to Meet You, our first micro drama mini series on real shorts, a platform where Gen Z consumers are increasingly spending time consuming bite-sized content. The launch drove over 10 million views, reinforcing our ability to engage with consumers through bold, innovative, and disruptive channels. Fourth, we continue to create compelling consumer experiences across all channels. Beginning with social commerce, we continue to scale and deepen our consumer touchpoints across both digital and social. In fact, Crocs was recently awarded Top Seller of the Year on TikTok Shop for 2025, underscoring our ability to continue to reach consumers on their preferred social channels. In March, we activated at the NBA All-Star Week and introduced our updated Echo Club, the Echo 2.0, a key second half product launch this year. We also released the Ripple, a bold silhouette designed to engage the sneaker community through a number of events from Complexicon in Hong Kong to our Soho store in New York City. Globally, we continue to expand our presence on TikTok Shop as this is a critical social selling platform over in the medium to long term. During the quarter, we scaled meaningfully in the UK and Malaysia, and looking forward, we'll be launching in Japan, landing Crocs as the first major footwear brand on the platform in the country. Fifth and finally, we're continuing to gain market share across the world in our international markets. In the first quarter, we saw broad-based strength across our tier one markets, led by direct-to-consumer channels. We saw outsized growth in our high priority markets, China, India, Japan, and Western Europe. In China, we hosted our first ever Superbrand Day on Doyun, which not only outperformed our expectations, but also drove strong consumer touchpoints through celebrity live streaming. In India, performance was led by growth in our digital traffic, stimulated by Let Them Talk campaign, which introduced the Echo RO for a local cricketer and celebrity, KL Raul. In Japan, performance was driven by strengthening brand presence in Tokyo retail with high consumer affinity for personalization in our DTC channels. Lastly, Western Europe saw notable growth across the UK, France, and Germany led by digital marketplace performance. Sandal started the year strong in the region and we see meaningful opportunity to scale this category going forward. During the quarter, we opened approximately 40 monobrand stores and kiosks, including six owned and operated stores internationally. To strengthen our international opportunity further, on April 1, we converted our Malaysia distributor business to a directly owned and operated, which resulted in the absorption of 21 highly productive retail stores. We see this as an opportunity to take further share in this vibrant market in 2026 and beyond. Now turning to Hey Dude, the first quarter came in ahead of expectations, tied largely to outperformance in DTC, despite significant reduction of performance marketing spend as we continue to deliver against our three pillar strategic plan. First, we are building a community laser focused on our core consumer. During the quarter, we launched several relevant collaborations, including our partnership with the Houston Rodeo. This was supported by retail presence at the rodeo for the third consecutive year as we continue to drive authentic connections with our core Hey Dude consumer. In addition, we released collaborations with Chevy, Jelly Roll, and New Roto, while accelerating the growth of our Hey Dude community through scaling social commerce. In fact, during the quarter, Hey Dude received the top growth seller of the year award on TikTok Shop, a nod to the progress and commitment we've made to scale this strategic channel. Second, we are building the core and thoughtfully adding more. We're building our leadership within the slip-on category, led by our icons, the Wally and Wendy. Stretch socks continues to drive our core business, and we're seeing momentum building in our newest stretch jersey franchise. This style, which we fondly refer to as a t-shirt for your feet, launched in all channels during the quarter and outperformed expectations. As we look into spring, we're seeing our sandal business start to gain material traction. with key highlights including the Maui Breeze franchise and sandal extensions of some of our already successful lines, the Austin Slide and the Hay 2.0 Flip. Beyond sandals, we continue to see strong response to our work offering, led by the Wally Compto, and we're excited to expand further into this category as we move throughout the year. Third, we're focused on stabilizing the North American marketplace. Our first quarter outperformance signals a meaningful step in our journey to return the brand to growth in the back half of this year. During the quarter, direct-to-consumer revenues increased 8%, led by strength in digital marketplaces. Wholesale declined as anticipated, while we remain laser-focused on managing our in-channel inventory levels. Wholesale sellouts are still below our aspirations, improved sequentially versus the fourth quarter. Importantly, we're receiving positive feedback from our key partners, around new products like our H2O work and sandals offering, as well as our core products like Stretch Jersey franchise and new introductions of our Stretch Socks platform. Turning back to the enterprise, I wanted to address the conflict in the Middle East as it relates to our business. As of today, it's too early to fully quantify the impact. However, we see this affecting Crocs in three ways. One, reduction of revenues from our Middle East distributor business. which has been contemplated within our annual guidance. Two, increased raw material and transportation costs associated with elevated oil prices. And three, a broader impact to the global macro economy, which is uncertain at this time. Patrick will speak to our guidance later in the call, which we feel prudently captures the current environment to the best of our ability. Before concluding, I wanted to highlight the publication of our 2025 Crocsync Comfort Report being released today. This annual report highlights our commitment to and progress against our purpose to create a more comfortable world for all. To conclude, we are focused on executing our near-term initiatives to drive diversified growth across both brands, DTC and wholesale, as well as domestic and international markets. We believe we have compelling strategies to grow both brands enabled by a clear consumer focus, innovative product and marketing, and our global go-to-market capabilities. I will now turn the call over to Patrick.