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Crocs (CROX) Strategic Efforts Good, Up 18.5% in 3 Months
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Crocs, Inc. (CROX - Free Report) is well-poised to tap the positive trends in the fashion world, thanks to its digital endeavors and other robust strategies. The company is gaining from brand strength and solid demand for its products that resonate well with customers. Undoubtedly, management is focused on creating a trend-right merchandise assortment, deepening relations with customers via marketing, enhancing the digital commerce agenda and efficiently controlling expenses.
Buoyed by such strengths, shares of this footwear dealer have increased 18.5% compared with the industry’s 14.2% growth in the three-month time frame. A Value Score of B further adds strength to this current Zacks Rank #3 (Hold) company.
Analysts also seem quite optimistic about the company. The Zacks Consensus Estimate for 2024 sales and earnings per share (EPS) is currently pegged at $4.1 billion and $11.93, respectively. These estimates show corresponding growth of 4.3% and 0.6% year over year.
What’s More?
Crocs has been gaining from solid consumer demand across the Crocs and HEYDUDE brands, supported by effective pricing actions. The company has been witnessing a decline in inbound freight costs, which contributed to margins in third-quarter 2023. In addition, favorable ocean freight rates, the absence of air freight and lower promotional activity in the Crocs brand acted as tailwinds.
The adjusted gross profit rose 10.7% year over year while the adjusted gross margin expanded 230 basis points (bps) to 57.4%. Also, adjusted operating income grew 7.8% year over year, while the adjusted operating margin expanded 40 bps to 28.3% from the prior-year quarter’s 27.9%.
Image Source: Zacks Investment Research
Recently, the company shared its holiday results. The strong performance can be attributed to a robust holiday season with market share gains for both the Crocs and HEYDUDE brands. Fourth-quarter revenues are poised to surpass the initial guidance, leading to an increased operating margin target for the year. Management now expects fourth-quarter revenues to increase more than 1% year over year, defying the earlier projections of a decline ranging from 1% to 4%. The Crocs brand is set to surge by almost 10% while HEYDUDE is anticipated to experience a decline of 19%.
Crocs guided annual revenues of approximately $3.95 billion. This suggests a noteworthy increase of more than 11% compared to 2022 and marks a slight uptick from the 10-11% growth estimated earlier. The company expects Crocs to achieve more than 13% revenue growth, surpassing the significant milestone of $3 billion, and HEYDUDE revenues to be approximately $949 million. It now expects the full-year non-GAAP operating margin to exceed 27%
As the company steps into 2024, it foresees a continued growth trajectory, with revenues anticipated to increase by 3% to 5% compared with 2023. The Crocs brand is projected to experience a 4% to 6% upswing while the HEYDUDE brand is expected to remain flat or see a slight increase. To fuel future expansion, Crocs plans to reinvest gross margin improvements from 2023 into strategic SG&A investments, targeting non-GAAP operating margins of approximately 25%.
In tandem with its financial success, Crocs is streamlining its segment reporting structure, moving from four segments to two — the Crocs brand and the HEYDUDE brand — and aligning its reporting with its operational focus. The company stands poised for sustained growth and strategic investments as it continues to carve its path in the competitive footwear industry.
The company sees long-term opportunities in Asia, primarily in China, which is the second-largest footwear market in the world. Management expects revenue growth to witness a CAGR of 25% and to represent 24% of total revenues in 2026. The company targets at least 50% of total revenues to come from digital channels by the end of 2026. Driven by strong revenue growth, the company anticipates improved profitability and cash flows through 2026. It expects the adjusted operating margin to be more than 26% and annual free cash flow in excess of $1 billion by the end of 2026.
Key Consumer Discretionary Picks
Some better-ranked companies are G-III Apparel Group (GIII), Royal Caribbean (RCL - Free Report) and lululemon athletica (LULU - Free Report) .
GIII Apparel has a trailing four-quarter earnings surprise of 541.8%, on average. The Zacks Consensus Estimate for GIII’s fiscal 2024 EPS indicates an increase of 33% from the year-ago period’s reported level.
Royal Caribbean sports a Zacks Rank of 1, at present. RCL has a trailing four-quarter earnings surprise of 28.3%, on average.
The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates increases of 57.7% and 187.9%, respectively, from the year-ago period’s reported levels.
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 financial-year sales and EPS suggests growth of 18.2% and 22.8%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 9.2%, on average.
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Crocs (CROX) Strategic Efforts Good, Up 18.5% in 3 Months
Crocs, Inc. (CROX - Free Report) is well-poised to tap the positive trends in the fashion world, thanks to its digital endeavors and other robust strategies. The company is gaining from brand strength and solid demand for its products that resonate well with customers. Undoubtedly, management is focused on creating a trend-right merchandise assortment, deepening relations with customers via marketing, enhancing the digital commerce agenda and efficiently controlling expenses.
Buoyed by such strengths, shares of this footwear dealer have increased 18.5% compared with the industry’s 14.2% growth in the three-month time frame. A Value Score of B further adds strength to this current Zacks Rank #3 (Hold) company.
Analysts also seem quite optimistic about the company. The Zacks Consensus Estimate for 2024 sales and earnings per share (EPS) is currently pegged at $4.1 billion and $11.93, respectively. These estimates show corresponding growth of 4.3% and 0.6% year over year.
What’s More?
Crocs has been gaining from solid consumer demand across the Crocs and HEYDUDE brands, supported by effective pricing actions. The company has been witnessing a decline in inbound freight costs, which contributed to margins in third-quarter 2023. In addition, favorable ocean freight rates, the absence of air freight and lower promotional activity in the Crocs brand acted as tailwinds.
The adjusted gross profit rose 10.7% year over year while the adjusted gross margin expanded 230 basis points (bps) to 57.4%. Also, adjusted operating income grew 7.8% year over year, while the adjusted operating margin expanded 40 bps to 28.3% from the prior-year quarter’s 27.9%.
Image Source: Zacks Investment Research
Recently, the company shared its holiday results. The strong performance can be attributed to a robust holiday season with market share gains for both the Crocs and HEYDUDE brands. Fourth-quarter revenues are poised to surpass the initial guidance, leading to an increased operating margin target for the year. Management now expects fourth-quarter revenues to increase more than 1% year over year, defying the earlier projections of a decline ranging from 1% to 4%. The Crocs brand is set to surge by almost 10% while HEYDUDE is anticipated to experience a decline of 19%.
Crocs guided annual revenues of approximately $3.95 billion. This suggests a noteworthy increase of more than 11% compared to 2022 and marks a slight uptick from the 10-11% growth estimated earlier. The company expects Crocs to achieve more than 13% revenue growth, surpassing the significant milestone of $3 billion, and HEYDUDE revenues to be approximately $949 million. It now expects the full-year non-GAAP operating margin to exceed 27%
As the company steps into 2024, it foresees a continued growth trajectory, with revenues anticipated to increase by 3% to 5% compared with 2023. The Crocs brand is projected to experience a 4% to 6% upswing while the HEYDUDE brand is expected to remain flat or see a slight increase. To fuel future expansion, Crocs plans to reinvest gross margin improvements from 2023 into strategic SG&A investments, targeting non-GAAP operating margins of approximately 25%.
In tandem with its financial success, Crocs is streamlining its segment reporting structure, moving from four segments to two — the Crocs brand and the HEYDUDE brand — and aligning its reporting with its operational focus. The company stands poised for sustained growth and strategic investments as it continues to carve its path in the competitive footwear industry.
The company sees long-term opportunities in Asia, primarily in China, which is the second-largest footwear market in the world. Management expects revenue growth to witness a CAGR of 25% and to represent 24% of total revenues in 2026. The company targets at least 50% of total revenues to come from digital channels by the end of 2026. Driven by strong revenue growth, the company anticipates improved profitability and cash flows through 2026. It expects the adjusted operating margin to be more than 26% and annual free cash flow in excess of $1 billion by the end of 2026.
Key Consumer Discretionary Picks
Some better-ranked companies are G-III Apparel Group (GIII), Royal Caribbean (RCL - Free Report) and lululemon athletica (LULU - Free Report) .
G-III Apparel sports a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
GIII Apparel has a trailing four-quarter earnings surprise of 541.8%, on average. The Zacks Consensus Estimate for GIII’s fiscal 2024 EPS indicates an increase of 33% from the year-ago period’s reported level.
Royal Caribbean sports a Zacks Rank of 1, at present. RCL has a trailing four-quarter earnings surprise of 28.3%, on average.
The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates increases of 57.7% and 187.9%, respectively, from the year-ago period’s reported levels.
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 financial-year sales and EPS suggests growth of 18.2% and 22.8%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 9.2%, on average.