Crocs reports positive Q3 but adjusts full year outlook

Consolidated third quarter revenues at Crocs were 1,062 million dollars, an increase of 1.6 percent or 2 percent on a constant currency basis.

Crocs forecasts full year revenues for the Crocs brand to grow approximately 8 percent versus growth of 7 percent to 9 percent prior. Revenues for the Heydude brand are expected to be down approximately 14.5 percent versus prior estimate of 10 percent to 8 percent decline.

"We reported third quarter results which exceeded our enterprise guidance on sales and profitability," said Andrew Rees, the company’s chief executive officer, adding, “While we are resetting our full-year outlook for HEYDUDE, I remain confident in the long-term trajectory of the brand."

Crocs posts Q3 earnings growth

The company’s direct-to-consumer (DTC) revenues grew 4.4 percent or 4.6 percent on a constant currency basis and wholesale revenues contracted 1.4 percent or 0.9 percent on a constant currency basis.

The company said in a release that gross margin rose to 59.6 percent and adjusted gross margin improved 220 basis points to 59.6 percent. Crocs diluted earnings per share of 3.36 dollars increased by 17.1 percent, while adjusted diluted earnings per share of 3.60 dollars increased 10.8 percent.

Crocs brand revenues increased 7.4 percent to 858 million dollars or 7.9 percent on a constant currency basis. DTC revenues increased 7.7 percent to 463 million dollars or 8 percent on a constant currency basis and wholesale revenues increased 7.1 percent to 396 million dollars or 7.8 percent on a constant currency basis.

The company added that revenues in North America increased 2.1 percent to 491 million dollars or 2.2 percent on a constant currency basis and international revenues increased 15.5 percent to 367 million dollars or 16.5 percent on a constant currency basis.

Heydude brand revenues decreased 17.4 percent to 204 million dollars with DTC revenues down 9.3 percent to 91 million dollars and wholesale revenues down 22.9 percent to 113 million dollars.

Crocs forecasts full revenue growth at lower end of prior outlook

For the fourth quarter of 2024, Crocs expects revenues to be flat to up slightly. Crocs brand to grow approximately 2 percent and Heydude brand to be down 6 percent to 4 percent compared to fourth quarter 2023.

Fourth quarter adjusted operating margin is forecasted to be approximately 19.5 percent and adjusted diluted earnings per share to be in the range of 2.20 dollars to 2.28 dollars.

For the full year, the company now expects revenue growth of approximately 3 percent at currency rates, at the lower end of prior guidance of 3 percent to 5 percent.

The company expects an adjusted operating margin of more than 25 percent, adjusted diluted earnings per share between 12.82 dollars to 12.90 dollars, at the high end of prior guidance of 12.45 dollars to 12.90 dollars.