Crocs naysayers are once again eating their words. On Thursday, the clog brand capped off another strong quarter of earnings, sending its stock soaring more than 11% in morning trading.
On a call with analysts and investors, Crocs CEO and president Andrew Rees credited his team’s aggressive efforts to reposition the product and brand for the “very, very strong traction” it saw across channels. Over the past several years, the company has paired up on collaborations with a wide range of brands, celebrities and retailers; whittled its store count down by more than 150 locations; doubled down on customization by way of its playful Jibbitz charms; and concentrated its efforts on its Classic clog style.
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It has paid off, particularly in the Americas, where sales were up by double digits across wholesale, retail and e-commerce during the second quarter, and 24.2% overall on a constant currency basis. Across all regions, the Niwot, Colo.-based company saw revenues increase 12.5% to $358.9 million, even as store closures knocked about $6 million from the top line.
Crocs has benefited from the cultural shift toward more casual, comfortable footwear, analysts say, as well as the “ugly shoe” trend that’s boosted sales of dad sneakers like the Balenciaga Triple S and Fila Disruptor. The brand has leaned into both, making overtures to the fashion industry and offering an increasing array of options for its core customer.
“On one hand, you have the practical uses for people in the food service, health-care and education industries, which target that important demographic segment,” said Hallie Spradlin, accessories director of Fashion Snoops, a trend-forecasting firm. “On the other hand, the more fashion-conscious consumers are also driving the conversation. It started a few seasons ago with luxury brands like Christopher Kane and Balenciaga introducing collaborations at their respective runway shows, but it has only continued from there.”
Crocs has also recently announced partnerships in the streetwear world with Chinatown Market and Pleasures, and on the call, Rees highlighted two very different collaborations: one with the printed handbag maker Vera Bradley, which targeted Crocs’ core customer and rolled out across both brands’ stores and e-commerce channels, and another with rapper Post Malone, which sold out three limited-edition drops.
The brand’s collaboration strategy, he said, “is to appeal to our very democratic and diverse consumer base. So they’ll be at the high end, they’ll be with the designers, they’ll be with musicians, they’ll be with other brands, they’ll be with retailers.” While there will be large-scale partnerships, he added, “they’ll be mixed in with others that are very focused and niche.”
Crocs is also tapping into what Rees called the “global megatrend” of personalization by repositioning its Jibbitz charms as a customization option for all ages, rather than just kids. While the company previously thought of the high-margin, $3.99 embellishments — which include rubberized American flags, avocado toasts and astrological signs — as add-ons for clog purchases, it’s now seeing customers come to its direct-to-consumer channels to buy charms for shoes they already own.
“Particularly your younger consumer is very focused on buying not necessarily a generic product, but they’re looking to buy a product that is customized for them,” he said. “Our way of enabling that — and I think it’s a very compelling way — is Jibbitz. It allows the consumer to make that purchase a unique purchase for them. It allows them to express key attributes that they want to express about themselves to others and then, frankly, to change that over time.”
The movement toward more self-expression is helping Crocs in other ways, too, said Alexis DeSalva, a senior research analyst at Mintel, a market research firm. “There’s been a shift within the fashion industry as a whole to be more inclusive . . . to be less about strict dress codes and who’s invited and who’s not,” she said. “And I think that has really helped maybe move away from a negative stigma associated with Crocs and really allowed people to adopt a sense of that individuality and dressing for themselves rather than for someone else.”
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