Crocs, Inc. reported earnings and sales for the third quarter ended September 30 topped expectations but guidance for the year was reduced as sales targets for HeyDude were reduced for the second straight quarter.
Third Quarter 2023 Operating Results
- Revenues were $1.05 billion, an increase of 6.2 percent from the same period last year, or 5.8 percent on a constant-currency basis. DTC revenues grew 17.8 percent, or 17.7 percent on a constant-currency basis. Wholesale revenues fell 3.6 percent compared to 2022, or down 4.3 percent on a constant-currency basis.
- Gross margin was 55.6 percent compared to 54.9 percent in the prior year. Adjusted gross margin improved 230 basis points to 57.4 percent compared to 55.1 percent in the same period last year.
- SG&A of $307.8 million increased from $277.2 million in the same period last year, and SG&A as a percent of revenues rose to 29.4 percent from 28.1 percent in the prior year. Adjusted SG&A increased to 29.1 percent of revenues versus 27.2 percent for the same period last year.
- Income from operations increased 3.7 percent to $273.9 million and operating margin fell slightly to 26.2 percent, compared to 26.8 percent for the same period last year. Adjusted income from operations rose 7.8 percent to $295.9 million and adjusted operating margin improved 40 basis points to 28.3 percent.
- Diluted earnings per share increased 5.5 percent to $2.87, as compared to $2.72 for the same period last year. Adjusted diluted earnings per share increased 9.4 percent to $3.25 compared to 2022.
Third Quarter 2023 Brand Summary
- Crocs Brand: Revenues increased 11.6 percent, or 11.1 percent on a constant-currency basis, to $798.8 million. DTC comparable sales increased 15.3 percent. Wholesale revenues increased 4.5 percent, or 3.6 percent on a constant-currency basis. By region for Crocs North America revenues of $480.7 million increased 8.0 percent, or 8.2 percent on a constant-currency basis. Asia Pacific revenues of $175.2 million, increased 26.5 percent, or 28.6 percent, on a constant-currency basis. EMEALA revenues of $142.8 million increased 8.3 percent, or 2.7 percent on a constant-currency basis.
- HeyDude Brand: Revenues during the third quarter decreased 8.3 percent to $246.9 million. DTC revenues increased 14.6 percent to $100.4 million. Wholesale revenues declined 19.4 percent to $146.5 million following the prior year’s pipeline fill and as its wholesale partners were more cautious on at-once orders.
For more details about the Crocs Q3 results, including the declines at HeyDude and the plan to turn the brand around, read more here:
