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Our demand is coming from repositioning of the brand and company: Crocs CEO

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Andrew Rees, Crocs CEO joins the Yahoo Finance Live panel to discuss the latest on Crocs earnings.

Video Transcript

[DIGITAL EFFECT]

ZACK GUZMAN: Welcome back to Yahoo Finance. We are keeping our eyes on shares of Crocs. That company delivering a top and bottom line beat, but shares are in the red here slightly. The clog slash sandal company reported a record $411.5 million in revenue, up more than 56%. That was a record, as I said. Crocs that it expects revenue to rise 40% to 50% in the first quarter, and between 20% to 25% for the full year. The stock has more than doubled over the last year.

So for more on the future of Crocs, want to bring on that company's CEO. Andrew Rees joins us now. And Andrew, congrats on hitting that record. I guess a lot of questions around what's driving the demand here for Crocs, because as we've highlighted on the show a few times, they're comfortable shoes, but some people might say that might be tied to the pandemic. What are you seeing in where this demand is coming from?

ANDREW REES: Yeah, great question, thank you, Zack. I would say, look, I think our demand is coming from a fundamental repositioning of the brand and the company. We've been at that for about five years now, and we're really started to see traction. Frankly, we were seeing traction ahead of the pandemic where we had a great 2019. And then I think the pandemic hasn't hurt, right?

So we did a lot of things during 2020 appealing to frontline health care workers. We donated over 860,000 pairs of shoes to that community. That was extremely well received. We've also done a lot in terms of sort of broader philanthropic efforts, raising money through, for Feeding America, et cetera. But importantly, I think what's happened a little bit in the pandemic, people have, casualization has increased.

Digitalization has increased. And we were really well-positioned for digital consumption. And people are really loving what we're offering them. So we're very optimistic about the future, and as you referenced in your intro there, have guided to between 40% and 50% growth in the first quarter.

AKIKO FUJITA: When you talk about a fundamental repositioning in the brand, you've also really sort of pursued these high profile partnerships with celebrities. Zack just alluding to the partnership you have with Post Malone. But how is that allowed you to expand the demographic that you reach? I imagine that is much more of a play for a younger consumer who you hope to keep on board with the Crocs brand.

ANDREW REES: Yeah, I think, you know, collaborations, and we've done a lot of them, you highlight Post Malone. But last year, that also included Justin Bieber, it included KFC. So we collaborate with a very broad variety of individuals and brands. And that allows us to appeal to a broad variety of consumers. One of the great things about Crocs is our audience is extremely broad. It could be teenagers, it could be mums and dads, it could be kids.

And we use our collaboration as a way of engaging all of those different audience members and bringing them into the brand and exciting them about what we're offering. And it's been incredibly effective. And I think it's also a tool and a mechanism that will last. So we've got a lot of opportunities to continue to do that. And we have an incredible lineup of collaborations for this year.

ZACK GUZMAN: Yeah, on the demographic front, it does seem like teenagers seem to be playing a rather important piece of the Crocs brand here. I'd be remiss if I didn't highlight Jibbitz, those things that you can pop into the holes in crocs to really personalize them. And I don't know a lot of older people who might be doing that to personalize their shoes out there. Maybe, I'm wrong. But is that really where you're seeing the acceleration right now is that younger Gen Z on top of millennials? Talk to me about that.

ANDREW REES: Yeah, absolutely. So that just absolutely helped. And I'm sorry I didn't address that in last question, but yes. I think we've really managed to engage that younger millennial Gen Z consumer. And you're right, they are a really important consumer base. They consume a lot themselves. But they also influence a lot of people. They have incredible social media presence, they influence people, they influence their parents, their siblings, et cetera.

So we've engaged them, they're coming into the brand in a significant way. They do love Jibbitz, they do love personalization. So behind Jibbitz, is that kind of global megatrend of personalization. They absolutely love it. And so it really brought them into the brand. And importantly, as we increasingly emphasize our sandal business, we have new introductions both last year and this year. This is a two-strap sandal, which is actually introduced next month. But that is also Jibbitable. So we're extending the element of personalization into sandals, which we think will be incredibly well-received.

AKIKO FUJITA: I like that term, Jibbitable. Andrew, let me ask you about a conversation we were having before the break, which is this discussion around bringing supply chains back closer to home. And this is something we have heard from so many different companies across sectors. The lesson learned from the pandemic is that you want manufacturing closer to home. You operate internationally. You've got production lines in about, what? Half a dozen countries? How are you looking at the mix right now given what played out over the last year?

ANDREW REES: Yeah, that is a really good question. And we're looking pretty hard at that. So the majority of our production today is really Vietnam. So that's a long way from this market. But also, we do have a very big business in Asia as well. So it's obviously much closer to that market. We use also production in Bosnia and Mexico and other places to be closer to market.

And as we go forward, I think you'll see us and probably most other companies continue to evolve a manufacturing footprint to balance cost with certainty of supply, and also being closer to market and be able to move faster. One thing we do see, the consumer environment moves faster and faster kind of every year. And ability to react to that is rewarded. So if we can react faster, we're confident we'll get rewarded for that.

AKIKO FUJITA: Well, I can attest to the comfort of your shoes. As somebody who owns a pair of Crocs, I will admit to it. Zack maybe getting on board with the brand too.

ZACK GUZMAN: Yeah, we'll see.

AKIKO FUJITA: Andrew Rees, CEO of Crocs, it's good to talk to you. Appreciate your time today.