Crocs delivers Q3 revenue and earnings growth

Crocs, Inc. recorded third quarter consolidated revenues of 1,045.7 million dollars, up 6.2 percent or 5.8 percent on a constant currency basis compared to 2022.

Diluted earnings per share increased 5.5 percent to 2.87 dollars compared to the same period last year, while adjusted diluted earnings per share increased 9.4 percent to 3.25 dollars.

"We delivered a strong third quarter, exceeding the high-end of our guidance, led by double-digit revenue growth in our Crocs brand supported by healthy full-price selling and industry-leading operating margins," said Andrew Rees, Crocs chief executive officer.

Highlights of Crocs Q3 trading performance

Crocs' DTC revenues grew 17.8%, or 17.7% on a constant currency basis. Wholesale revenues fell 3.6% compared to 2022, or down 4.3% on a constant currency basis.

Crocs brand revenues of 798.8 million dollars, increased 11.6 percent or 11.1 percent on a constant currency basis, fueled by Asia revenue growth of 26.5 percent or 28.6 percent on a constant currency basis and North America direct-to-consumer comparable sales growth of 10.2 percent.

Crocs brand North America revenues of 480.7 million increased 8 percent or 8.2 percent on a constant currency basis and Asia Pacific revenues of 175.2 million dollars increased 26.5 percent or 28.6 percent on a constant currency basis.

Europe, Middle East, Africa, and Latin America (EMEALA) revenues of 142.8 million dollars increased 8.3 percent or 2.7 percent on a constant currency basis.

HeyDude brand DTC revenues grew 14.6 percent as compared to 2022. HeyDude wholesale revenues declined 19.4 percent to 146.5 million dollars.

The company’s operating margin was 26.2 percent and adjusted operating margin was 28.3 percent.

Crocs expects full year revenues to increase between 10 to 11 percent

For the fourth quarter, the company expects revenues to decline approximately 1 percent to 4 percent, resulting in revenues of approximately 903 million dollars to 938 million dollars at currency rates as of the end of the last reported period.

Crocs expects adjusted operating margin of approximately 21 percent for the quarter and adjusted diluted earnings per share of 2.05 dollars to 2.35 dollars.

With respect to 2023, the company expects consolidated revenue growth to now be approximately 10 percent to 11 percent compared to 2022, resulting in revenues of approximately 3,905 to 3,940 million dollars at currency rates as of the end of the last reported period.

Revenues for the Crocs brand to grow approximately 12 percent to 13 percent on a reported basis and revenues for the HeyDude brand to now grow approximately 4 percent to 6 percent on a reported basis, implying a decline of approximately 4 percent to 6 percent including the period prior to the brand’s acquisition.

Adjusted operating margin is expected to be approximately 27 percent and adjusted diluted earnings per share to be between 11.55 dollars and 11.85 dollars.