Back to top

Image: Bigstock

Things You Must Know Ahead of Crocs' (CROX) Q1 Earnings Report

Read MoreHide Full Article

Crocs, Inc. (CROX - Free Report) is scheduled to release first-quarter 2021 results on Apr 27. The leading footwear company is expected to have witnessed revenue and earnings growth in the to-be-reported quarter.

The Zacks Consensus Estimate for first-quarter earnings is pegged at 86 cents, which suggests substantial growth from 22 cents reported in the prior-year quarter. Moreover, the consensus mark has been unchanged in the past 30 days. Further, the consensus mark for revenues is pegged at $414.5 million, indicating growth of 47.4% from the figure reported in the year-ago quarter.

In the last reported quarter, the company delivered an earnings surprise of 29.3%. Moreover, it delivered an earnings surprise of 194%, on average, in the trailing four quarters.

Crocs, Inc. Price and EPS Surprise


Crocs, Inc. Price and EPS Surprise

Crocs, Inc. price-eps-surprise | Crocs, Inc. Quote

Factors at Play

Crocs has been benefiting from the shift to casual wear trend due to the pandemic-induced longer stay-at-home practices. The company’s portfolio, which focuses on comfort and style through its iconic clog material, has been witnessing strength as consumers are confined to their homes due to the pandemic. Notably, Crocs offers a wide variety of footwear products, including sandals, wedges, flips and slides, which cater to people of all ages. Continued demand for casual clothing and footwear is likely to have worked in favor of the company in the to-be-reported quarter.

In the recent quarters, Crocs’ top line has been witnessing strength, owing to healthy demand in its key products, including Clogs, Sandals, Jibbitz and Visible Comfort technology. Moreover, the company’s revenues are likely to have gotten a boost from its strategy of innovative product launches and partnerships, including global launches with Justin Bieber and Post Malone, and a collaboration agreement with Rare Market in Korea. On the last reported quarter’s earnings call, management predicted that continued momentum in brands and robust growth in all regions will aid results in the first quarter.

Further, strong online demand, driven by expanded digital and omni-channel capabilities, bodes well. The solid momentum in the digital platform is expected to have continued in the first quarter as consumers have been increasingly shifting to online shopping.

On the last reported quarter’s earnings call, management outlined a strong view for first-quarter 2021. The company predicts revenue growth of 40-50% for the first quarter, with an adjusted operating margin of 17-18%.

However, Crocs is not free from cost headwinds stemming from the increased shift to the online platform. Elevated shipping costs due to the surge in online demand remain a drag. Moreover, on its last quarter’s earnings call, management expected gross margin to be negatively impacted by a $3-million investment related to distribution centers.

Zacks Model

Our proven model does not conclusively predict an earnings beat for Crocs this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Crocs currently has a Zacks Rank #2 and an Earnings ESP of 0.00%.

Stocks Poised to Beat Earnings Estimates

Here are a few companies you may want to consider, as our model shows that these have the right combination to post an earnings beat:

Rocky Brands, Inc. (RCKY - Free Report) has an Earnings ESP of +5.09% and it currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

World Wrestling Entertainment, Inc. (WWE - Free Report) has an Earnings ESP of +11.11% and it presently flaunts a Zacks Rank #1.

Ralph Lauren Corporation (RL - Free Report) currently has an Earnings ESP of +31.32% and a Zacks Rank #2.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?

Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

Access Zacks Top 10 Stocks for 2021 today >>