Crocs Shares Jump After Clog-Maker Raises Full Year Guidance
Shares for Crocs Inc. closed up more than 14% on Thursday after the footwear company raised its forecast for 2022.
The clog maker, which completed its acquisition of Hey Dude earlier this year, reported that revenues were up 57.4% in Q3 to $985.1 million, which beats analysts’ expectations. Diluted earnings per share were $2.72, which was also ahead of expectations.
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Given the strong performance in the quarter, which got a boost from back-to-school sales, Crocs raised its full-year outlook and expects consolidated revenues for they year to be between $3.455 and $3.520 billion, which would represent growth between 49% and 52% over 2021. This includes a forecast for Hey Dude revenues to land between approximately $850 and $890 million for the year.
Shares of Crocs were up 5% as of Thursday morning.
“Our exceptional third quarter results, including record revenue and industry-leading adjusted operating margin of 28% are a testament to the strength of the Crocs and Hey Dude brands,” said CEO Andrew Rees in a statement. “We are raising 2022 guidance following our strong back-to-school performance and 20% constant currency revenue growth in the Crocs brand.”
Crocs also reaffirmed its long-term projections for the brand, which include a goal to have Crocs brand revenue hit $5 billion by 2026 and Hey Dude revenues to hit $1 billion in 2023.
In Q3, Hey Dude revenues were $269.4 million. Wholesale revenues made up $181.8 million of sales and DTC revenues were $87.6 million.
Despite the overall strong performance, the quarter was not without its challenges. Crocs brand’s gross margin was 57.3%, down 660 basis points from last year due to pressures from inflation as well as higher freight and inventory handling costs. In Q2, Rees said that uncertainty around the future macroeconomic environment and changing consumer behavior led to the planning for a dip in growth at Crocs in the short-term.
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