Back to top

Image: Bigstock

Crocs Gears Up for Q3 Earnings: Here's What You Should Know

Read MoreHide Full Article

Crocs, Inc. (CROX - Free Report) is scheduled to release third-quarter 2024 results on Oct. 29, before market open. The Zacks Consensus Estimate for revenues is pegged at $1.05 billion, indicating a rise of 0.5% from the prior-year figure.

The consensus estimate for earnings per share has increased a couple of cents in the past seven days to $3.13. The estimate indicates a decline of 3.7% from the year-ago reported number. 

The Broomfield, CO-based company has a trailing four-quarter earnings surprise of 14.9%, on average. In the last reported quarter, its bottom line surpassed the Zacks Consensus Estimate by 11.7%.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Key Factors to Note About CROX’s Results

Crocs has been seeing strength in clogs, sandals and personalization. The company’s Jibbitz business has also been doing well for quite some time now. Better advanced demand from its retail partners and solid direct-to-consumer (DTC) channel have been bolstering the performance. 

The Zacks Consensus Estimate for the company’s DTC revenues is currently pegged at $550 million, up 3.8% year over year. Solid consumer demand across the Crocs and HEYDUDE brands on effective pricing actions is likely to have bolstered CROX’s performance .

Management, in its last earnings call, had projected Crocs brand’s third-quarter revenues to grow in the range of 3-5% year over year .

However, Crocs has been facing challenges related to the operating environment and rising costs associated with the HEYDUDE acquisition. Also, investments in distribution and logistics have been acting as deterrents. Inflation, higher interest rates and geopolitical tensions are other concerns. The company has been struggling with higher selling, general and administrative (SG&A) expenses for a while now, due to investments in talent and marketing. These limitations are likely to have contributed to reduced profitability.

Management, in its last earnings call, had anticipated SG&A costs to rise in the low-to-mid 20% range in the third quarter. It projected revenues to be down 1.5% to up 0.5% year over year at currency rates. The HEYDUDE brand’s revenues were anticipated to decline in the band of 14-16%. CROX had envisioned adjusted earnings to be in the range of $2.95-$3.10 per share, while the adjusted operating margin was expected to be 24.5%.

What Our Model Unveils for Crocs

Our proven model predicts 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. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Crocs currently has an Earnings ESP of +0.61% and a Zacks Rank of 2.

Crocs, Inc. Price and EPS Surprise

Crocs, Inc. Price and EPS Surprise

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

CROX’s Valuation Picture

From a valuation perspective, Crocs offers an attractive opportunity, trading at a discount relative to the historical and industry benchmarks. With a forward 12-month price-to-earnings ratio of 9.65x, which is below the five-year high of 34.18x and the Textile - Apparel industry’s average of 13.01x, the stock offers compelling value for investors seeking exposure to the sector.

The recent market movements show that Crocs’ shares have risen 4.8% in the past six months against the industry's 3.1% decline.

Other Stocks Poised to Beat on Earnings 

Here are some other companies, which according to our model, have the right combination of elements to post an earnings beat:

Adidas (ADDYY - Free Report) currently has an Earnings ESP of +5.19% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

ADDYY is likely to register bottom and top-line growth when it reports third-quarter results. The Zacks Consensus Estimate for quarterly revenues is pegged at $7 billion, indicating 7.4% growth from the figure reported in the year-ago quarter. 

The consensus estimate for ADDYY’s earnings is pegged at $1.09 a share, indicating a 43.4% rise from the year-ago quarter’s actual. ADDYY has a trailing four-quarter negative earnings surprise of 8.4%, on average.

lululemon athletica (LULU - Free Report) currently has an Earnings ESP of +8.44% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here. 

LULU is likely to register top-line growth when it reports fiscal third-quarter results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.35 billion, indicating 6.8% growth from the figure reported in the year-ago quarter.

The consensus estimate for LULU’s earnings is pegged at $2.73 a share, implying a 7.9% increase from the year-earlier quarter. LULU has a trailing four-quarter earnings surprise of 7.9%, on average.

Disney (DIS - Free Report) currently has an Earnings ESP of +2.09% and a Zacks Rank of 3. DIS is likely to register bottom and top-line growth when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $22.6 billion, indicating a 6.4% increase from the figure reported in the year-ago quarter. 

The consensus estimate for DIS’ earnings is pegged at $1.09 per share, implying 32.9% growth from the year-ago reported actuals. DIS has a trailing four-quarter earnings surprise of 18%, on average.

Published in