Crocs, Inc. (CROX - Free Report) has been benefiting from healthy consumer demand for new clogs and sandals, as well as continued momentum in the Crocs and HEYDUDE brands and strong direct-to-consumer growth. In the second quarter of 2023, the company’s revenues increased 11.2% year over year to $1,072.4 million, driven by growth across all regions and channels. Its direct-to-consumer sales in the quarter surged 26% year-over-year.
Shares of this Zacks Rank #3 (Hold) company increased by 32.2% in the past year against the industry’s decline of 7.5%.
CROXs acquisition of HEYDUDE, which sells lightweight, casual shoes and sandals for men, women and children, has added value to its fast-growing footwear business. Crocs believes that HEYDUDE’s consumer-insight-driven casual, comfortable and lightweight products complement its existing product portfolio. The acquisition has added to the company’s digital penetration, as HEYDUDE already has a strong online presence.
HEYDUDE brand’s second-quarter revenues advanced 3% year over year to $239.4 million. For 2023, revenues related to the HEYDUDE buyout are likely to grow in the range of 14%-18% on a reported basis. Management remains optimistic about HEYDUDE, which is expected to achieve its sales target of $1 billion this year.
Driven by these factors, management raised its guidance for 2023. Revenues are anticipated to grow 12.5-14.5% (from the previously projected 11-14%) to $4,000-$4,065 million. Adjusted earnings are expected in the range of $11.83-$12.22 per share, up from the previous guidance of $11.17-$11.73. The adjusted operating margin is projected to be 27.5%, higher than the previously anticipated range of 26-27%.
For third-quarter 2023, revenues are expected to grow 3-5% to $1,013-$1,034 million. Adjusted earnings are projected in the range of $3.07-$3.15 per share. The adjusted operating margin is anticipated to be 27%.
However, CROX has been experiencing rising costs and expenses over time. In the second quarter, its adjusted SG&A expenses increased 23.1% year over year to $298.3 million. The metric grew 17.1% in the first quarter. The persistence of this trend may weigh on the company’s profitability in the upcoming quarters.
Although inflationary pressure has somewhat eased, rising interest rates have also been a concern for Crocs. For instance, in the second quarter, its interest expenses increased by 30.6% on a year-over-year basis.
Stocks to Consider
Some better-ranked companies in the consumer discretionary sector are Royal Caribbean (RCL - Free Report) , lululemon athletica (LULU - Free Report) and Alto Ingredients (ALTO - Free Report) .
Royal Caribbean sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
RCL delivered a trailing four-quarter earnings surprise of 28.5%, on average.
The Zacks Consensus Estimate for RCL’s 2023 sales and earnings per share (EPS) indicates growth of 53.6% and 177.7%, respectively, from the 2022 reported numbers.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for lululemon athletica’s current fiscal year sales and EPS implies growth of 17.1% and 18.4%, respectively, year over year.
LULU delivered a trailing four-quarter earnings surprise of 9.9%, on average.
Alto Ingredients has a Zacks Rank #2 at present.
ALTO delivered an earnings surprise of 242.9% in the last reported quarter. The Zacks Consensus Estimate for ALTO’s upcoming quarter’s EPS indicates growth of 125% from the previous year’s reported figure.
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Crocs, Inc. (CROX - Free Report) has been benefiting from healthy consumer demand for new clogs and sandals, as well as continued momentum in the Crocs and HEYDUDE brands and strong direct-to-consumer growth. In the second quarter of 2023, the company’s revenues increased 11.2% year over year to $1,072.4 million, driven by growth across all regions and channels. Its direct-to-consumer sales in the quarter surged 26% year-over-year.
Shares of this Zacks Rank #3 (Hold) company increased by 32.2% in the past year against the industry’s decline of 7.5%.
CROXs acquisition of HEYDUDE, which sells lightweight, casual shoes and sandals for men, women and children, has added value to its fast-growing footwear business. Crocs believes that HEYDUDE’s consumer-insight-driven casual, comfortable and lightweight products complement its existing product portfolio. The acquisition has added to the company’s digital penetration, as HEYDUDE already has a strong online presence.
HEYDUDE brand’s second-quarter revenues advanced 3% year over year to $239.4 million. For 2023, revenues related to the HEYDUDE buyout are likely to grow in the range of 14%-18% on a reported basis. Management remains optimistic about HEYDUDE, which is expected to achieve its sales target of $1 billion this year.
Driven by these factors, management raised its guidance for 2023. Revenues are anticipated to grow 12.5-14.5% (from the previously projected 11-14%) to $4,000-$4,065 million. Adjusted earnings are expected in the range of $11.83-$12.22 per share, up from the previous guidance of $11.17-$11.73. The adjusted operating margin is projected to be 27.5%, higher than the previously anticipated range of 26-27%.
For third-quarter 2023, revenues are expected to grow 3-5% to $1,013-$1,034 million. Adjusted earnings are projected in the range of $3.07-$3.15 per share. The adjusted operating margin is anticipated to be 27%.
However, CROX has been experiencing rising costs and expenses over time. In the second quarter, its adjusted SG&A expenses increased 23.1% year over year to $298.3 million. The metric grew 17.1% in the first quarter. The persistence of this trend may weigh on the company’s profitability in the upcoming quarters.
Although inflationary pressure has somewhat eased, rising interest rates have also been a concern for Crocs. For instance, in the second quarter, its interest expenses increased by 30.6% on a year-over-year basis.
Stocks to Consider
Some better-ranked companies in the consumer discretionary sector are Royal Caribbean (RCL - Free Report) , lululemon athletica (LULU - Free Report) and Alto Ingredients (ALTO - Free Report) .
Royal Caribbean sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
RCL delivered a trailing four-quarter earnings surprise of 28.5%, on average.
The Zacks Consensus Estimate for RCL’s 2023 sales and earnings per share (EPS) indicates growth of 53.6% and 177.7%, respectively, from the 2022 reported numbers.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for lululemon athletica’s current fiscal year sales and EPS implies growth of 17.1% and 18.4%, respectively, year over year.
LULU delivered a trailing four-quarter earnings surprise of 9.9%, on average.
Alto Ingredients has a Zacks Rank #2 at present.
ALTO delivered an earnings surprise of 242.9% in the last reported quarter. The Zacks Consensus Estimate for ALTO’s upcoming quarter’s EPS indicates growth of 125% from the previous year’s reported figure.
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
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