Crocs, Inc., a world leader in innovative casual footwear for men, women, and children, announced its first quarter 2020 financial results.
Andrew Rees, President and Chief Executive Officer, said, “Despite this recent softness, Crocs remains a strong, vibrant brand that is very well positioned. In the near-term, we have no liquidity concerns and have taken quick action to ensure we will be strongly cash flow positive for the remainder of the year. Over the long-term, we are confident we will restore our momentum in 2021 and continue our positive growth trajectory for years to come.
First quarter revenues were $281.2 million, declining 5.0% from the first quarter of 2019, or 3.3% on a constant currency basis. Currency negatively impacted revenues by approximately $5.2 million. Wholesale revenues declined 5.6% and retail comparable store sales grew 7.5% with total retail revenues down 15.0% due to COVID-19 closures. The decline in wholesale and retail are partially offset by e-commerce revenue growth of 15.8%.
Gross margin was 47.7%, compared to 46.5% in last year’s first quarter. Adjusted gross margin, which excludes 30 basis points of non-recurring expenditures related to U.S. and EMEA distribution centers, was 48.0%. Adjusted gross margin rose 110 basis points compared to last year’s first quarter, benefiting from product mix, higher prices on certain product, and lower levels of promotions and discounts in the Americas, somewhat offset by 50 basis points of currency.
Selling, general and administrative expenses (“SG&A”) were $113.4 million, up from $105.0 million in the first quarter of 2019. Non-recurring charges that primarily relate to bad debt expense and donations were $4.6 million compared to $0.7 million in last year’s first quarter. The company has committed to total donations of up to $11.0 million, the majority of which will be reflected in second quarter non-recurring charges. SG&A represented 40.3% of revenues compared to 35.5% in the first quarter of 2019. Croc’s adjusted SG&A was 38.7% of revenues versus 35.3%, in last year’s first quarter.
Income from operations declined 36.1% to $20.8 million from $32.6 million in the first quarter of 2019, and operating margin fell 360 basis points to 7.4%. Excluding non-recurring gross margin and SG&A charges, adjusted income from operations fell 23.7% to $26.4 million and adjusted operating margin was 9.4% compared to 11.7% in the first quarter of 2019.
Diluted earnings per share fell to $0.16, as compared with $0.33 in the first quarter of 2019. Excluding non-recurring gross margin and SG&A charges, adjusted diluted earnings per share was $0.22 compared to $0.36 in the first quarter of 2019.