Companies

Crocs posts strong first quarter

May 8, 2024 United States

The US-based casual footwear company kicked off the year with a first quarter revenue growth of 6.2% over the same period of last year, driven by the performance of the Crocs brand

“We delivered an exceptional first quarter, led by mid-teens growth of our Crocs Brand, driven by robust consumer demand both in North America and in international markets. Our record revenue, industry-leading gross margins and the power of our diversified business enabled us to raise our full-year adjusted diluted earnings per share outlook”, commented Andrew Rees, Chief Executive Officer.

First Quarter Results

In the first quarter of the current fiscal year, the company's consolidated revenue reached 938.6 million US dollars, an increase of 6.2% over the same period last year; on a constant currency basis, the growth was 6.9%.

During this period, direct-to-consumer revenue (DTC) grew by 11.8% (or 12.3% on a constant currency basis), while wholesale revenue increased by 3.2% (or 4.1% on a constant currency basis), as compared to the first quarter of last year.

Crocs’ gross margin improved significantly in the first quarter, rising by 170 percentage points to 55.6% from 53.9% in the same period of 2023. Accordingly, adjusted gross margin expanded by 180 basis points to 56.0% from 54.2%.

In the three months ended in March, the company’s diluted earnings per share increased by 4.6% year-over-year to 2.50 US dollars and adjusted diluted earnings per share increased by 15.7% year-over-year to 2.61 US dollars.

Brand Summary

The Crocs brand revenue rose by 14.6% (or 15.6% on a constant currency basis) in the first three months of the year to 744 million US dollars, on a comparable basis to the same period of the previous year.

By channel, the brand’s DTC revenue by 18.3% (or 19.0% on a constant currency basis) year-over-year to 282 million US dollars, while wholesale revenue increased by 12.5% (or 13.8% on a constant currency basis) year-over-year to 462 million US dollars. In North America, Crocs brand revenue grew by 9.0% year-over-year to 383 million US dollars and international revenue grew even faster at 21.3% (23.6% on a constant currency basis) year-over-year to 361 million US dollars.

On the other hand, in the first quarter of the year, Heydude’s revenue decreased by 12.7%, as compared to the same period in 2023, totalling 195 million US dollars. The DTC channel contributed 60 million US dollars to the brand's total revenue, down by 11.0% year-over-year, and wholesale sales contributed 135 million US dollars, down by 19.7% year-over-year.

“As we continue to prioritize brand health in the North American market for Heydude, and considering what we are seeing quarter-to-date, we are reducing our revenue expectations for the brand for the balance of the year. We are confident in the long-term opportunity for the Heydude brand and are excited to welcome a new Heydude President to fully unlock its future potential”, added Andrew Rees.

Outlook

For the full year 2024, Crocs expects currency-neutral revenue growth of 3% to 5% as compared to 2023 and adjusted diluted earnings per share from 12.25 to 12.73 US dollars. For the second quarter, the company expects revenue growth of 1% to 3% compared to the first quarter of the prior year and adjusted diluted earnings per share between 3.40 to 3.55 US dollars.

Image Credits: sepcleat.com

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