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Crocs (CROX) Q4 Earnings Beat Estimates, Revenues Up Y/Y
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Crocs, Inc. (CROX - Free Report) posted mixed results for fourth-quarter 2023, wherein the bottom line surpassed the Zacks Consensus Estimate while the top line missed the same. Its adjusted earnings of $2.58 per share surpassed the Zacks Consensus Estimate of $2.38 but fell 2.6% year over year.
We note that this current Zacks Rank #3 (Hold) stock has gained 33.4% in the past three months compared with the industry’s 13.1% growth.
Q4 in Detail
Revenues rose 1.6% year over year to $960.7 million in the reported quarter but missed the Zacks Consensus Estimate of $967 million. On a constant-currency basis, revenues improved 1.5% year over year. The top line witnessed solid growth in the direct-to-consumer (“DTC”) channel and in both regions. DTC revenues increased 6.8%, while wholesale revenues fell 4.6%.
The Crocs brand’s revenues grew 10% year over year to $732.5 million, including a 12.5% increase in DTC revenues and a 6.7% rise in wholesale revenues. DTC comparable sales for the Crocs brand rose 10.7% in the fourth quarter.
Image Source: Zacks Investment Research
The HEYDUDE brand’s revenues fell 18.5% year over year to $227.6 million in the fourth quarter. The decline was due to a 27.4% decline in wholesale revenues and a 9.1% decrease in DTC revenues. DTC comparable sales for the HEYDUDE brand fell 14.2%.
Total revenues in North America were up 3.1% year over year to $471.3 million, while revenues in the International region rose 24.9% year over year to $261.2 million.
The adjusted gross profit rose 6.1% year over year to $534.4 million. The adjusted gross margin expanded 240 basis points (bps) to 55.7%. Adjusted SG&A expenses, as a percentage of revenues, increased 430 bps year over year to 31.6%.
Adjusted operating income fell 6% year over year to $231.1 million. The adjusted operating margin contracted 190 bps to 24.1% from the year-ago quarter’s 26%.
Financial Details
The company ended the quarter with cash and cash equivalents of $149.3 million, long-term borrowings of $1.6 billion and stockholders’ equity of $1.5 billion. The company’s liquidity position remains strong, with $570 million in available borrowing capacity as of Dec 31, 2023.
Management incurred a capital expenditure of $116 million in 2023. The company anticipates a capital expenditure of $120-$130 million in 2024 related to the expansion of its distribution capabilities, including the new HEYDUDE distribution center in Las Vegas, the implementation of new technology systems for HEYDUDE and the expansion of its corporate facilities to support growth.
Outlook
Management has issued guidance for the first quarter and 2024. For the year, the company anticipates year-over-year revenue growth of 3-5% at constant currency. Revenues for the Crocs brand are expected to rise 4-6%, while the metric for the HEYDUDE brand is forecast to be flat to slightly up.
The adjusted operating margin is envisioned to be 25%. The combined GAAP tax rate is expected to be 21.5%, whereas the adjusted tax rate is likely to be 18%. Adjusted earnings are envisioned to be $12.05-$12.50 per share, up from $10.92 per share recorded last year.
For first-quarter 2024, the company expects revenues in the range of down 1.5% to up 0.5% year over year. Crocs brand’s revenues are likely to grow 6-8% year over year while HEYDUDE brand’s revenues are anticipated to plunge 20-23%. Adjusted earnings are forecast to be $2.15-$2.25 per share, with the adjusted operating margin likely to be 22%.
GIII Apparel has a trailing four-quarter earnings surprise of 541.8%, on average. The Zacks Consensus Estimate for GIII’s fiscal 2024 earnings per share (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) Q4 Earnings Beat Estimates, Revenues Up Y/Y
Crocs, Inc. (CROX - Free Report) posted mixed results for fourth-quarter 2023, wherein the bottom line surpassed the Zacks Consensus Estimate while the top line missed the same. Its adjusted earnings of $2.58 per share surpassed the Zacks Consensus Estimate of $2.38 but fell 2.6% year over year.
We note that this current Zacks Rank #3 (Hold) stock has gained 33.4% in the past three months compared with the industry’s 13.1% growth.
Q4 in Detail
Revenues rose 1.6% year over year to $960.7 million in the reported quarter but missed the Zacks Consensus Estimate of $967 million. On a constant-currency basis, revenues improved 1.5% year over year. The top line witnessed solid growth in the direct-to-consumer (“DTC”) channel and in both regions. DTC revenues increased 6.8%, while wholesale revenues fell 4.6%.
The Crocs brand’s revenues grew 10% year over year to $732.5 million, including a 12.5% increase in DTC revenues and a 6.7% rise in wholesale revenues. DTC comparable sales for the Crocs brand rose 10.7% in the fourth quarter.
Image Source: Zacks Investment Research
The HEYDUDE brand’s revenues fell 18.5% year over year to $227.6 million in the fourth quarter. The decline was due to a 27.4% decline in wholesale revenues and a 9.1% decrease in DTC revenues. DTC comparable sales for the HEYDUDE brand fell 14.2%.
Total revenues in North America were up 3.1% year over year to $471.3 million, while revenues in the International region rose 24.9% year over year to $261.2 million.
The adjusted gross profit rose 6.1% year over year to $534.4 million. The adjusted gross margin expanded 240 basis points (bps) to 55.7%. Adjusted SG&A expenses, as a percentage of revenues, increased 430 bps year over year to 31.6%.
Adjusted operating income fell 6% year over year to $231.1 million. The adjusted operating margin contracted 190 bps to 24.1% from the year-ago quarter’s 26%.
Financial Details
The company ended the quarter with cash and cash equivalents of $149.3 million, long-term borrowings of $1.6 billion and stockholders’ equity of $1.5 billion. The company’s liquidity position remains strong, with $570 million in available borrowing capacity as of Dec 31, 2023.
Management incurred a capital expenditure of $116 million in 2023. The company anticipates a capital expenditure of $120-$130 million in 2024 related to the expansion of its distribution capabilities, including the new HEYDUDE distribution center in Las Vegas, the implementation of new technology systems for HEYDUDE and the expansion of its corporate facilities to support growth.
Outlook
Management has issued guidance for the first quarter and 2024. For the year, the company anticipates year-over-year revenue growth of 3-5% at constant currency. Revenues for the Crocs brand are expected to rise 4-6%, while the metric for the HEYDUDE brand is forecast to be flat to slightly up.
The adjusted operating margin is envisioned to be 25%. The combined GAAP tax rate is expected to be 21.5%, whereas the adjusted tax rate is likely to be 18%. Adjusted earnings are envisioned to be $12.05-$12.50 per share, up from $10.92 per share recorded last year.
For first-quarter 2024, the company expects revenues in the range of down 1.5% to up 0.5% year over year. Crocs brand’s revenues are likely to grow 6-8% year over year while HEYDUDE brand’s revenues are anticipated to plunge 20-23%. Adjusted earnings are forecast to be $2.15-$2.25 per share, with the adjusted operating margin likely to be 22%.
Eye These Solid Picks
Some better-ranked companies are G-III Apparel Group (GIII - Free Report) , 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 earnings per share (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.