Speaking at the UBS Global Consumer and Retail Conference, Andrew Rees, CEO of Crocs, Inc., said the company is “off to a great start” in 2023, driven by innovation and new product introductions from its Crocs and Hey Dude brands.

New product highlights include the Salehe Pollex slide and the Brooklyn flip for the Crocs brand, and the Sirocco sneaker for Hey Dude.

“Those new innovations and new product introductions are performing extremely well,” said Rees. “And it is clear that the consumer, while they may be overall worried about the recession, worried about interest rates, worried about the rising energy costs, are still buying in the footwear category. The footwear category is doing well and, in particular, they’re still buying Crocs.”

Rees also said limited-edition collaborations remain “a core part of our marketing philosophy in how we go to market,” and some recent ones are finding success. Rees said a Hello Kitty & Friends x Crocs capsule collection introduced over the last several weeks has “done extremely well.” A Minecraft x Crocs collection presented earlier in the year has likewise done “extremely well,” he said.

For Hey Dude, a marketing call-out was its sponsorship of the Houston Livestock Show & Rodeo, a 15-day event. Rees said, “It’s absolutely vast in terms of its consumer appeal and in the number of people that descend on Houston for this. So it’s a great opportunity to showcase the Hey Dude brand to what is one of our core consumers, the rodeo consumer.”

The presentation came after Crocs in mid-February reported fourth-quarter revenues climbed 61.1 percent on a reported basis and 64.8 percent on a currency-neutral basis to $945.2 million. Crocs brand revenues climbed 17.2 percent on a currency-neutral basis. Hey Dude, acquired on February 17, 2022, was up 36.6 percent proforma. Adjusted EPS in the quarter advanced 23.3 percent to $2.65, topping Wall Street’s consensus estimate of $2.26.

For the year, the company’s revenues reached $3.6 billion, increasing 53.7 percent (58.2 percent currency-neutral). Adjusted diluted earnings per share increased 31.3 percent to $677.3 million, or $10.92.

Crocs’ outlook for 2023 calls for sales to increase in the range of 10 percent to 13 percent. Revenues for the Crocs brand are projected to grow 6 percent to 8 percent (9 percent to 11 percent in constant currency), while Heydude is expected to grow mid-20 percent on a reported basis.

“As we thought about 2023, we frankly planned our business conservatively,” said Rees at the UBD conference. “We wanted to make sure that we were well-positioned for whatever consumer environment showed up, but as we look at our business, I would say the DTC business, particularly in North America where we were anticipating some consumer resistance, it’s definitely exceeding our expectations. I think a little bit of that is due to the footwear category doing well. I think a lot of that is due to the amount of innovation and amount of newness that we’re delivering to the consumer and that they’re responding to positively. So we feel great about the start to 2023.”

Rees said the company’s brand purpose is “Everyone Comfortable In Their Own Shoes,” and the company continues to ride the strong demand for comfort across both brands. Rees said, “As we look at the global consumer today, it is very, very apparent that the consumer is looking for comfort. They’re looking for comfortable shoes; they’re looking for easy on and off. They’re looking to interact with their brands digitally. And Crocs as a company is extremely well-positioned against those consumer needs with the Crocs brand and the Hey Dude brand.”

Photo courtesy Minecraft x Crocs