Document




 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of Report (date of earliest event reported): November 7, 2017
 
CROCS, INC.
(Exact name of registrant as specified in its charter)
 
Delaware
 
 
 
0-51754
 
 
 
20-2164234
 
(State or other jurisdiction
 
 
 
(Commission File Number)
 
 
 
(I.R.S. Employer
 
of incorporation)
 
 
 
 
 
 
 
Identification No.)
 
 
 
 
 
 
 
7477 East Dry Creek Parkway 
Niwot, Colorado
 
 
 
80503
 
(Address of principal executive offices)
 
 
 
(Zip Code)
 
 
 Registrant’s telephone number, including area code: (303) 848-7000
 
Not Applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.45) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o




1



Item 2.02. Results of Operations and Financial Condition.
 
On November 7, 2017, Crocs, Inc. issued a press release reporting its results of operations for the three and nine months ended September 30, 2017. A copy of the press release is furnished as Exhibit 99.1 to this report.

Item 9.01. Financial Statements and Exhibits.
 
(d) Exhibits.
 
Exhibit
No.
 
 
 
Description
 
99.1
 
 
 
 

2



 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
CROCS, INC.
 
 
 
 
 
 
 
Date: November 7, 2017
By:
 
/s/ Carrie W. Teffner
 
 
 
 
Carrie W. Teffner 
 
 
 
 
Executive Vice President and Chief Financial Officer
 
 



3
Exhibit


Exhibit 99.1
 
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11875739&doc=3
 
 
 
Investor Contacts:
 
Marisa Jacobs, Crocs, Inc.
 
 
 
(303) 848-7322
 
 
mjacobs@crocs.com
 
 
 
 
 
           and
 
 
 
 
 
Brendon Frey, ICR
 
 
(203) 682-8200
 
 
 
 
brendon.frey@icrinc.com
 
 
 
 
 
 
Media Contact:
 
Ryan Roccaforte, Crocs, Inc.
 
 
 
 
(303) 848-7116
 
 
 
 
 
rroccaforte@crocs.com
 

Crocs, Inc. Reports Third Quarter 2017 Results
Revenues and Gross Margin Exceed Guidance; SG&A In-Line with Guidance
______________________________________________________________________________
 
NIWOT, COLORADO November 7, 2017 — Crocs, Inc. (NASDAQ: CROX) a world leader in innovative casual footwear for men, women and children, today announced its financial results for the third quarter of 2017. These results cover the three months ended September 30, 2017, and are compared to the three months ended September 30, 2016.
 
Andrew Rees, President and Chief Executive Officer, said, “The third quarter was another strong quarter for us, both in terms of our financial performance and the progress made against our strategic initiatives. Consistent with the first half of this year, we again met or exceeded our guidance metrics. Furthermore, the perception of the brand continued to rise, with results from our latest annual brand survey showing double digit increases in brand desirability, relevance and consideration compared to last year. Looking ahead, we are confident that further operational improvements and a disciplined approach to expense management will facilitate a return to double digit EBIT margins.”

Third Quarter 2017 Operating Results:
 
Revenues were $243.3 million, above the top end of our revenue guidance, and decreased 1.1% compared to the third quarter of 2016. On a constant currency basis, revenues decreased 1.6% compared to the third quarter of 2016.

Third quarter gross margin was 50.8%, an increase of 100 basis points over last year’s third quarter. Our focus on core molded product and our continued focus on inventory management resulted in higher quality revenue that delivered stronger gross margins.

Selling, general and administrative expenses (“SG&A”) were $120.8 million compared to $123.6 million in the third quarter of 2016, a decrease of 2.3%. As a percent of revenues, SG&A improved 70 basis points. Our third quarter 2017 SG&A includes $3.6 million of charges relating to our SG&A reduction plan.

Income from operations improved by $3.9 million, coming in at $2.7 million compared to last year’s third quarter loss of $1.2 million.

Net loss attributable to common stockholders was $2.3 million, or $0.03 per diluted share. This amount includes $3.6 million related to our SG&A reduction plan. For the quarter ended September 30, 2017, we had 71.9 million weighted average diluted common shares outstanding.




1



Balance Sheet and Cash Flow Highlights:

Cash and cash equivalents as of September 30, 2017 were $178.2 million, compared to $150.2 million as of September 30, 2016.

Inventory was $140.3 million as of September 30, 2017, compared to $169.4 million as of September 30, 2016. This 17.2% decline reflects our ongoing efforts to carefully manage inventory levels and improve the quality of goods on hand.

Cash provided by operating activities was $80.4 million during the first nine months of 2017, compared to $29.4 million during the first nine months of 2016.

Capital expenditures totaled $2.0 million during the third quarter of 2017, compared to $5.4 million during the third quarter of 2016.

Cash flows from financing activities during the third quarter of 2017 include $15.6 million used to repurchase 1.9 million shares of our common stock.

At September 30, 2017, there were no borrowings outstanding on our credit facility, and in October 2017, we increased the borrowing capacity of the facility to $100 million from $80 million.

Financial Outlook:

Fourth Quarter 2017:

The Company expects fourth quarter 2017 revenues to be between $180 and $190 million.

The Company expects the gross margin for the fourth quarter to be approximately 43%, or 100 basis points above last year’s 42% gross margin.

The Company expects SG&A of approximately $115 million, including approximately $2 million of charges associated with our SG&A reduction plan. This represents a $3 million reduction to last year’s $118.5 million of SG&A in the fourth quarter.

Full Year 2017:

The Company continues to expect 2017 revenues to be down low single digits compared to 2016.

The Company continues to expect gross margin for 2017 to be approximately 50%.

The Company continues to expect SG&A for 2017 to be between $490 and $495 million. Included in the range is approximately $10 million of charges associated with our SG&A reduction plan.



2



Conference Call Information:
 
A conference call to discuss third quarter 2017 results is scheduled for today, Tuesday, November 7, 2017, at 8:30 a.m. EDT. The call participation number is (888) 771-4371. A replay of the conference call will be available two hours after the completion of the call at (888) 843-7419. International participants can dial (847) 585-4405 to take part in the conference call, and can access a replay of the call at (630) 652-3042. All of the above calls will require the input of the conference identification number 45783019. The call will also be streamed live on the Crocs website, www.crocs.com, and that audio recording will be available at www.crocs.com through November 7, 2018.

About Crocs, Inc.:
 
Crocs, Inc. (NASDAQ: CROX) is a world leader in innovative casual footwear for men, women and children. Crocs offers a broad portfolio of all-season products, while remaining true to its core molded footwear heritage. All Crocs™ shoes feature Croslite™ material, a proprietary, revolutionary technology that gives each pair of shoes the soft, comfortable, lightweight and non-marking qualities that Crocs fans know and love.

 Visit www.crocs.com for additional information.

Forward Looking Statements:

This news release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding prospects, expectations and our EBIT margin, revenues, gross margin, and SG&A outlook. These statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to be materially different from any future results, performances, or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the following: current global financial conditions; the effect of competition in our industry; our ability to effectively manage our future growth or declines in revenues; changing consumer preferences; our ability to maintain and expand revenues and gross margin; our ability to accurately forecast consumer demand for our products; our ability to successfully implement our strategic plans; our ability to develop and sell new products; our ability to obtain and protect intellectual property rights; the effect of potential adverse currency exchange rate fluctuations and other international operating risks; and other factors described in our most recent Annual Report on Form 10-K under the heading “Risk Factors” and our subsequent filings with the Securities and Exchange Commission. Readers are encouraged to review that section and all other disclosures appearing in our filings with the Securities and Exchange Commission.

All information in this document speaks as of November 7, 2017. We do not undertake any obligation to update publicly any forward-looking statements, including, without limitation, any estimate regarding revenues, margins, or SG&A, whether as a result of the receipt of new information, future events, or otherwise.


3



CROCS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Revenues
$
243,273

 
$
245,888

 
$
824,401

 
$
848,856

Cost of sales
119,810

 
123,454

 
397,547

 
427,416

Gross profit
123,463

 
122,434

 
426,854

 
421,440

Selling, general and administrative expenses
120,778

 
123,649

 
379,141

 
387,807

Income (loss) from operations
2,685

 
(1,215
)
 
47,713

 
33,633

Foreign currency gain (loss), net
(257
)
 
1,379

 
181

 
(1,568
)
Interest income
269

 
178

 
576

 
558

Interest expense
(167
)
 
(184
)
 
(539
)
 
(661
)
Other income (expense)
54

 
(1
)
 
187

 
(108
)
Income before income taxes
2,584

 
157

 
48,118

 
31,854

Income tax expense
955

 
1,690

 
13,519

 
7,704

Net income (loss)
1,629

 
(1,533
)
 
34,599

 
24,150

Dividends on Series A convertible preferred stock
(3,000
)
 
(3,000
)
 
(9,000
)
 
(9,000
)
Dividend equivalents on Series A convertible preferred shares related to redemption value accretion and beneficial conversion feature
(892
)
 
(819
)
 
(2,621
)
 
(2,406
)
Net income (loss) attributable to common stockholders
$
(2,263
)
 
$
(5,352
)
 
$
22,978

 
$
12,744

Net income (loss) per common share:
 

 
 

 
 
 
 
Basic
$
(0.03
)
 
$
(0.07
)
 
$
0.26

 
$
0.15

Diluted
$
(0.03
)
 
$
(0.07
)
 
$
0.26

 
$
0.14

 
 
 
 
 
 
 
 
Weighted average common shares outstanding - basic
71,895

 
73,493

 
73,212

 
73,323

Weighted average common shares outstanding - diluted
71,895

 
73,493

 
74,160

 
74,730




4



CROCS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except share and par value amounts)
 
 
September 30,
2017
 
December 31,
2016
ASSETS
 

 
 

Current assets:
 

 
 

Cash and cash equivalents
$
178,189

 
$
147,565

Accounts receivable, net of allowances of $49,360 and $48,138, respectively
92,708

 
78,297

Inventories
140,282

 
147,029

Income tax receivable
7,421

 
2,995

Other receivables
14,547

 
14,642

Restricted cash - current
2,175

 
2,534

Prepaid expenses and other assets
24,416

 
32,413

Total current assets
459,738

 
425,475

Property and equipment, net of accumulated depreciation and amortization of $95,512 and $88,603, respectively
38,412

 
44,090

Intangible assets, net
66,505

 
72,700

Goodwill
1,663

 
1,480

Deferred tax assets, net
7,098

 
6,825

Restricted cash
2,895

 
2,547

Other assets
13,342

 
13,273

Total assets
$
589,653

 
$
566,390

 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 

 
 

Current liabilities:
 

 
 

Accounts payable
$
55,181

 
$
61,927

Accrued expenses and other liabilities
84,836

 
78,282

Income taxes payable
14,096

 
6,593

Current portion of borrowings and capital lease obligations
1,070

 
2,338

Total current liabilities
155,183

 
149,140

Long-term income tax payable
4,926

 
4,464

Long-term capital lease obligations
35

 
40

Other liabilities
13,931

 
13,462

Total liabilities
174,075

 
167,106

Commitments and contingencies
 
 
 
Series A convertible preferred stock, 1.0 million authorized, 0.2 million shares outstanding, liquidation preference $203 million
181,522

 
178,901

Stockholders’ equity:
 

 
 

Preferred stock, par value $0.001 per share, 4.0 million shares authorized, none outstanding

 

Common stock, par value $0.001 per share, 94.7 million and 93.9 million issued, 71.0 million and 73.6 million shares outstanding, respectively
95

 
94

Treasury stock, at cost, 23.7 million and 20.3 million shares, respectively
(311,302
)
 
(284,237
)
Additional paid-in capital
370,567

 
364,397

Retained earnings
218,703

 
195,725

Accumulated other comprehensive loss
(44,007
)
 
(55,596
)
Total stockholders’ equity
234,056

 
220,383

Total liabilities and stockholders’ equity
$
589,653

 
$
566,390

 

5



CROCS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)

 
Nine Months Ended September 30,
 
2017
 
2016
Cash flows from operating activities:
 

 
 

Net income
$
34,599

 
$
24,150

Adjustments to reconcile net income to net cash provided by operating activities:
 

 
 

Depreciation and amortization
24,701

 
25,473

Unrealized foreign currency gain (loss), net
1,017

 
(7,863
)
Share-based compensation
6,851

 
8,006

Other non-cash items
(1,208
)
 
3,669

Changes in operating assets and liabilities:
 
 
 

Accounts receivable, net of allowances
(9,068
)
 
(15,762
)
Inventories
12,435

 
3,750

Prepaid expenses and other assets
12,997

 
(7,559
)
Accounts payable, accrued expenses and other liabilities
(1,909
)
 
(4,510
)
Cash provided by operating activities
80,415

 
29,354

Cash flows from investing activities:
 

 
 

Cash paid for purchases of property and equipment
(6,553
)
 
(12,651
)
Proceeds from disposal of property and equipment
1,562

 
2,425

Cash paid for intangible assets
(7,710
)
 
(5,598
)
Change in restricted cash
383

 
953

Cash used in investing activities
(12,318
)
 
(14,871
)
Cash flows from financing activities:
 

 
 

Proceeds from bank borrowings
5,500

 
29,582

Repayments of bank borrowings and capital lease obligations
(8,222
)
 
(32,378
)
Dividends—Series A preferred stock
(9,000
)
 
(9,000
)
Repurchases of common stock
(25,645
)
 

Other
(233
)
 
(338
)
Cash used in financing activities
(37,600
)
 
(12,134
)
Effect of exchange rate changes on cash
127

 
4,526

Net change in cash and cash equivalents
30,624

 
6,875

Cash and cash equivalents—beginning of period
147,565

 
143,341

Cash and cash equivalents—end of period
$
178,189

 
$
150,216
















6



CROCS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(UNAUDITED)
 
In addition to financial measures presented on the basis of accounting principles generally accepted in the United States of America (“U.S. GAAP”), we present “Non-GAAP selling, general, and administrative expenses” and “Non-GAAP net income attributable to common stockholders”, which are non-GAAP financial measures. Non-GAAP results exclude the impact of items that management believes affect the comparability or underlying business trends in our condensed consolidated financial statements in the periods presented.
 
We also present certain information related to our current period results of operations through “constant currency”, which is a non-GAAP financial measure and should be viewed as a supplement to our results of operations and presentation of reportable segments under U.S. GAAP. Constant currency represents current period results that have been retranslated using exchange rates used in the prior year comparative period to enhance the visibility of the underlying business trends excluding the impact of foreign currency exchange rate fluctuations.
 
Management uses non-GAAP results to assist in comparing business trends from period to period on a consistent basis in communications with the board of directors, stockholders, analysts, and investors concerning our financial performance. We believe that these non-GAAP measures are useful to investors and other users of our condensed consolidated financial statements as an additional tool for evaluating operating performance. We believe they also provide a useful baseline for analyzing trends in our operations. Investors should not consider these non-GAAP measures in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP.
 



7



 CROCS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(UNAUDITED)
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2017
 
2016
 
2017
 
2016
 
 
(in thousands)
SG&A expenses reconciliation:
 
 
 
 
 
 
 
 
U.S. GAAP SG&A expenses
 
$
120,778

 
$
123,649

 
$
379,141

 
$
387,807

Reorganization charges (1)
 
(2,022
)
 

 
(3,649
)
 
(458
)
Strategic consulting services (2)
 
(1,481
)
 

 
(3,071
)
 

Other
 
(86
)
 

 
(863
)
 
(354
)
Total adjustments
 
(3,589
)
 

 
(7,583
)
 
(812
)
Non-GAAP SG&A expenses
 
$
117,189

 
$
123,649

 
$
371,558

 
$
386,995


 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2017
 
2016
 
2017
 
2016
 
 
(in thousands)
Net income (loss) attributable to common stockholders reconciliation:
 
 
 
 
 
 
 
 
GAAP net income (loss) attributable to common stockholders
 
$
(2,263
)
 
$
(5,352
)
 
$
22,978

 
$
12,744

Reorganization charges (1)
 
2,022

 

 
3,649

 
458

Strategic consulting services (2)
 
1,481

 

 
3,071

 

Other
 
86

 
3,344

 
863

 
354

 Total adjustments
 
3,589

 
3,344

 
7,583

 
812

Non-GAAP net income (loss) attributable to common stockholders
 
$
1,326

 
$
(2,008
)
 
$
30,561

 
$
13,556

(1) Represents severance and other expenses related to reorganization activities.
(2) Represents operating expenses incurred in 2017 related to strategic consulting.


8



CROCS, INC. AND SUBSIDIARIES
REVENUES BY CHANNEL
(UNAUDITED)

 
 
Three Months Ended September 30,
 
Change
 
Constant Currency
Change 
(1)
 
 
2017
 
2016
 
$
 
%
 
$
 
%
 
 
($ in thousands)
Wholesale:
 
 

 
 

 
 

 
 

 
 

 
 

Americas
 
$
41,642

 
$
41,389

 
$
253

 
0.6
 %
 
$
153

 
0.4
 %
Asia Pacific
 
41,005

 
45,565

 
(4,560
)
 
(10.0
)%
 
(4,034
)
 
(8.9
)%
Europe
 
23,857

 
21,909

 
1,948

 
8.9
 %
 
604

 
2.8
 %
Other businesses
 
254

 
271

 
(17
)
 
(6.3
)%
 
(28
)
 
(10.3
)%
Total wholesale
 
106,758

 
109,134

 
(2,376
)
 
(2.2
)%
 
(3,305
)
 
(3.0
)%
Retail:
 
 

 
 

 
 

 
 

 
 

 
 

Americas
 
57,404

 
56,607

 
797

 
1.4
 %
 
689

 
1.2
 %
Asia Pacific
 
29,497

 
37,259

 
(7,762
)
 
(20.8
)%
 
(7,213
)
 
(19.4
)%
Europe
 
12,434

 
13,194

 
(760
)
 
(5.8
)%
 
(1,457
)
 
(11.0
)%
Total retail
 
99,335

 
107,060

 
(7,725
)
 
(7.2
)%
 
(7,981
)
 
(7.5
)%
E-commerce:
 
 
 
 
 
 
 
 
 
 
 
 

Americas
 
21,413

 
16,662

 
4,751

 
28.5
 %
 
4,668

 
28.0
 %
Asia Pacific
 
9,537

 
8,096

 
1,441

 
17.8
 %
 
1,708

 
21.1
 %
Europe
 
6,230

 
4,936

 
1,294

 
26.2
 %
 
974

 
19.7
 %
Total e-commerce
 
37,180

 
29,694

 
7,486

 
25.2
 %
 
7,350

 
24.8
 %
Total revenues
 
$
243,273

 
$
245,888

 
$
(2,615
)
 
(1.1
)%
 
$
(3,936
)
 
(1.6
)%
(1) Reflects year over year change as if the current period results were in constant currency, which is a non-GAAP financial measure. See “Reconciliation of GAAP Measures to Non-GAAP Measures” on page 7 for more information.
 

9



CROCS, INC. AND SUBSIDIARIES
REVENUES BY CHANNEL
(UNAUDITED)

 
 
Nine Months Ended September 30,
 
Change
 
Constant Currency
Change 
(1)
 
 
2017
 
2016
 
$
 
%
 
$
 
%
 
 
($ in thousands)
Wholesale:
 
 

 
 

 
 

 
 

 
 

 
 

Americas
 
$
169,975

 
$
170,165

 
$
(190
)
 
(0.1
)%
 
$
(1,611
)
 
(0.9
)%
Asia Pacific
 
177,086

 
197,359

 
(20,273
)
 
(10.3
)%
 
(18,796
)
 
(9.5
)%
Europe
 
95,387

 
97,163

 
(1,776
)
 
(1.8
)%
 
(2,493
)
 
(2.6
)%
Other businesses
 
545

 
667

 
(122
)
 
(18.3
)%
 
(127
)
 
(19.0
)%
Total wholesale
 
442,993

 
465,354

 
(22,361
)
 
(4.8
)%
 
(23,027
)
 
(4.9
)%
Retail:
 
 
 
 
 
 
 
 
 
 
 
 
Americas
 
145,809

 
150,142

 
(4,333
)
 
(2.9
)%
 
(4,377
)
 
(2.9
)%
Asia Pacific
 
90,458

 
101,097

 
(10,639
)
 
(10.5
)%
 
(9,943
)
 
(9.8
)%
Europe
 
32,924

 
34,699

 
(1,775
)
 
(5.1
)%
 
(3,006
)
 
(8.7
)%
Total retail
 
269,191

 
285,938

 
(16,747
)
 
(5.9
)%
 
(17,326
)
 
(6.1
)%
E-commerce:
 
 
 
 
 
 
 
 
 
 
 
 
Americas
 
58,552

 
53,579

 
4,973

 
9.3
 %
 
4,935

 
9.2
 %
Asia Pacific
 
35,483

 
27,812

 
7,671

 
27.6
 %
 
8,819

 
31.7
 %
Europe
 
18,182

 
16,173

 
2,009

 
12.4
 %
 
1,845

 
11.4
 %
Total e-commerce
 
112,217

 
97,564

 
14,653

 
15.0
 %
 
15,599

 
16.0
 %
Total revenues
 
$
824,401

 
$
848,856

 
$
(24,455
)
 
(2.9
)%
 
$
(24,754
)
 
(2.9
)%
(1) Reflects year over year change as if the current period results were in constant currency, which is a non-GAAP financial measure. See “Reconciliation of GAAP Measures to Non-GAAP Measures” on page 7 for more information.
 

10



CROCS, INC. AND SUBSIDIARIES
RETAIL STORE COUNTS
(UNAUDITED)  
 
June 30, 2017
 
Opened
 
Closed (1)
 
September 30, 2017
Company-operated retail locations:
 
 
 
 
 
 
 
Type:
 
 
 
 
 
 
 
Kiosk/store-in-store
84

 

 
9

 
75

Retail stores
191

 
1

 
17

 
175

Outlet stores
228

 
3

 
7

 
224

Total
503

 
4

 
33

 
474

Operating segment:
 
 
 
 
 
 
 
Americas
184

 
1

 
6

 
179

Asia Pacific
228

 
3

 
25

 
206

Europe
91

 

 
2

 
89

Total
503

 
4

 
33

 
474

(1) We completed the transfer of one company-operated store in China to a distributor during the period.

 
December 31, 2016
 
Opened
 
Closed (1)
 
September 30, 2017
Company-operated retail locations:
 
 
 
 
 
 
 
Type:
 
 
 
 
 
 
 
Kiosk/store-in-store
98

 

 
23

 
75

Retail stores
228

 
5

 
58

 
175

Outlet stores
232

 
13

 
21

 
224

Total
558

 
18

 
102

 
474

Operating segment:
 
 
 
 
 
 
 
Americas
190

 
2

 
13

 
179

Asia Pacific
270

 
15

 
79

 
206

Europe
98

 
1

 
10

 
89

Total
558

 
18

 
102

 
474

(1) We completed the transfer of thirty-one company-operated stores in the Middle East and China to distributors during the period.

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Comparable retail sales and direct to consumer sales by operating segment are as follows:
 
Constant Currency (1)
 
Constant Currency (1)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Comparable store sales (retail only): (2)
 
 
 
 
 
 
 
  Americas
2.8
 %
 
(2.8
)%
 
(0.3
)%
 
(1.4
)%
  Asia Pacific
(2.9
)%
 
(5.8
)%
 
(1.7
)%
 
(4.4
)%
  Europe
(2.1
)%
 
(0.9
)%
 
(2.3
)%
 
2.1
 %
  Global
0.4
 %
 
(3.5
)%
 
(1.0
)%
 
(2.0
)%

 
Constant Currency (1)
 
Constant Currency (1)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Direct to consumer comparable store sales (includes retail and e-commerce): (2)
 
 
 
 
 
 
 
  Americas
9.2
%
 
(1.7
)%
 
2.4
%
 
3.0
%
  Asia Pacific
3.7
%
 
(2.4
)%
 
8.4
%
 
2.3
%
  Europe
4.8
%
 
(6.7
)%
 
2.6
%
 
0.3
%
  Global
7.0
%
 
(2.6
)%
 
4.3
%
 
2.4
%
(1)  Reflects period over period change as if the current period results were in constant currency, which is a non-GAAP financial measure. See “Reconciliation of GAAP to Non-GAAP Measures” on page 7 for more information.
(2) Comparable store status is determined on a monthly basis. Comparable store sales include the revenues of stores that have been in operation for more than twelve months. Stores in which selling square footage has changed more than 15% as a result of a remodel, expansion, or reduction are excluded until the thirteenth month in which they have comparable prior year sales. Temporarily closed stores are excluded from the comparable store sales calculation during the month of closure. Location closures in excess of three months are excluded until the thirteenth month post re-opening. E-commerce revenues are based on same site sales period over period.


12