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Crocs' (CROX) Strategic Efforts Appear Good: Apt to Retain
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Crocs, Inc. (CROX - Free Report) has been performing well on the bourses, thanks to its robust business strategies. The company has been gaining from solid consumer demand across the Crocs and HEYDUDE brands, backed by effective pricing actions. This has helped it experience impressive growth for a while now. In fourth-quarter 2023, the company’s bottom line surpassed the Zacks Consensus Estimate for the 15th consecutive time.
Driven by such upsides, this current Zacks Rank #3 (Hold) company has gained 17.7% in the past three months compared with the industry’s 3.7% growth. Analysts 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 $12.38, respectively. These estimates show corresponding growth of 3.9% and 2.9% year over year. A VGM Score of A further adds strength.
Let’s Delve Deep
Crocs has been seeing strength in clogs, sandals and personalization for a while now. Each of the three categories grew double digits during 2023. During 2023, the HEYDUDE brand delivered revenues of nearly $950 million and more than $200 million in operating income. The company’s Jibbitz business has also been doing well for quite some time now. This business increased 17% to more than $0.25 billion, accounting for roughly 9% of the total mix in 2023.
Management continues to view personalization as a mega-consumer trend, with the opportunity of expanding the Jibbitz penetration in 2024 via better wholesale execution, deeper international penetration and advanced speed to market capabilities.
Image Source: Zacks Investment Research
Crocs has been witnessing a decline in inbound freight costs, which have been contributing to gross margins for quite some time now. Also, favorable ocean freight rates, the absence of air freight and lower promotional activity in the Crocs brand have been acting as tailwinds.
In fourth-quarter 2023, the adjusted gross profit rose 6.1% year over year, while the adjusted gross margin expanded 240 basis points (bps) to 55.7%, owing to gains from lower freight costs across both brands. Crocs brand’s adjusted gross margin grew 340 bps year over year. This increase is attributable to roughly 240 bps of freight tailwinds, higher international pricing, and favorable promotions and customer mix.
Such factors make us optimistic about the future. 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% backed by the international business, while the metric for the HEYDUDE brand is forecast to be flat to slightly up for 2024. The adjusted operating margin is envisioned to be 25%. It anticipates gross margin improvement compared with 2023 at the enterprise level, with stable Crocs brand gross margin and HEYDUDE gross margin to rise for the year. Adjusted EPS is envisioned to be $12.05-$12.50, up from $10.92 recorded last year.
To wrap up, Crocs seems to be a decent investment bet given all the aforementioned positives.
Ralph Lauren, a footwear and accessories dealer, sports a Zacks Rank #1 (Strong Buy), at present. RL has a trailing four-quarter earnings surprise of 18.7%, on average.
The Zacks Consensus Estimate for Ralph Lauren’s current financial-year sales and EPS suggests growth of 2.7% and 22.7%, respectively, from the year-ago corresponding figures. You can see the complete list of today’s Zacks #1 Rank stocks here.
Royal Caribbean carries a Zacks Rank #2 (Buy), at present. RCL has a trailing four-quarter earnings surprise of 26.4%, on average.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates increases of 14.4% and 47.1%, respectively, from the year-ago period’s reported levels.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank of 2, at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 18.4% and 23.8%, 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 Appear Good: Apt to Retain
Crocs, Inc. (CROX - Free Report) has been performing well on the bourses, thanks to its robust business strategies. The company has been gaining from solid consumer demand across the Crocs and HEYDUDE brands, backed by effective pricing actions. This has helped it experience impressive growth for a while now. In fourth-quarter 2023, the company’s bottom line surpassed the Zacks Consensus Estimate for the 15th consecutive time.
Driven by such upsides, this current Zacks Rank #3 (Hold) company has gained 17.7% in the past three months compared with the industry’s 3.7% growth. Analysts 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 $12.38, respectively. These estimates show corresponding growth of 3.9% and 2.9% year over year. A VGM Score of A further adds strength.
Let’s Delve Deep
Crocs has been seeing strength in clogs, sandals and personalization for a while now. Each of the three categories grew double digits during 2023. During 2023, the HEYDUDE brand delivered revenues of nearly $950 million and more than $200 million in operating income. The company’s Jibbitz business has also been doing well for quite some time now. This business increased 17% to more than $0.25 billion, accounting for roughly 9% of the total mix in 2023.
Management continues to view personalization as a mega-consumer trend, with the opportunity of expanding the Jibbitz penetration in 2024 via better wholesale execution, deeper international penetration and advanced speed to market capabilities.
Image Source: Zacks Investment Research
Crocs has been witnessing a decline in inbound freight costs, which have been contributing to gross margins for quite some time now. Also, favorable ocean freight rates, the absence of air freight and lower promotional activity in the Crocs brand have been acting as tailwinds.
In fourth-quarter 2023, the adjusted gross profit rose 6.1% year over year, while the adjusted gross margin expanded 240 basis points (bps) to 55.7%, owing to gains from lower freight costs across both brands. Crocs brand’s adjusted gross margin grew 340 bps year over year. This increase is attributable to roughly 240 bps of freight tailwinds, higher international pricing, and favorable promotions and customer mix.
Such factors make us optimistic about the future. 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% backed by the international business, while the metric for the HEYDUDE brand is forecast to be flat to slightly up for 2024. The adjusted operating margin is envisioned to be 25%. It anticipates gross margin improvement compared with 2023 at the enterprise level, with stable Crocs brand gross margin and HEYDUDE gross margin to rise for the year. Adjusted EPS is envisioned to be $12.05-$12.50, up from $10.92 recorded last year.
To wrap up, Crocs seems to be a decent investment bet given all the aforementioned positives.
Eye These Solid Picks
Some better-ranked companies are Ralph Lauren (RL - Free Report) , Royal Caribbean (RCL - Free Report) and lululemon athletica (LULU - Free Report) .
Ralph Lauren, a footwear and accessories dealer, sports a Zacks Rank #1 (Strong Buy), at present. RL has a trailing four-quarter earnings surprise of 18.7%, on average.
The Zacks Consensus Estimate for Ralph Lauren’s current financial-year sales and EPS suggests growth of 2.7% and 22.7%, respectively, from the year-ago corresponding figures. You can see the complete list of today’s Zacks #1 Rank stocks here.
Royal Caribbean carries a Zacks Rank #2 (Buy), at present. RCL has a trailing four-quarter earnings surprise of 26.4%, on average.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates increases of 14.4% and 47.1%, respectively, from the year-ago period’s reported levels.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank of 2, at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 18.4% and 23.8%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 9.2%, on average.