Crocs delivers strong revenue and earnings growth in 2023

Crocs 2023 revenues of nearly 4 billion dollars increased 11.5 percent or 12 percent on a constant currency basis, over 2022. Diluted earnings per share increased 46.8 percent to 12.79 dollars per share and adjusted diluted earnings per share increased 10.2 percent to 12.03 dollars.

The company's fourth quarter revenues of 960 million dollars, increased 1.6 percent or 1.5 percent on a constant currency basis.

"We delivered a record year for Crocs Inc. capped off by a strong fourth quarter that exceeded expectations across all metrics. Crocs brand grew across all regions and channels, highlighting the power of our strategy and disciplined execution,” said Andrew Rees, the company’s chief executive officer.

“We made good progress in the fourth quarter towards returning our Heydude brand to a pull-market position resulting in improved gross margins and healthy inventory levels exiting the year," added Rees.

Review of Crocs and Heydude’s Q4 and 2023 results

Fourth quarter direct-to-consumer (DTC) revenues grew 6.8 percent, while wholesale revenues contracted 4.6 percent.

By brand, Crocs revenues of 732 million dollars, rose 10 percent or 9.9 percent on a constant currency basis.

Crocs brand revenues increased 13.3 percent or 14 percent on a constant currency basis in 2023 to 3 billion dollars. Wholesale revenues increased 8.4 percent or 9.3 percent on a constant currency basis, DTC revenues rose 18.5 percent or 19 percent on a constant currency basis.

North America revenues of 1.8 billion dollars increased 8.1 percent or 8.3 percent on a constant currency basis and international revenues of 1.2 billion dollars increased 21.7 percent or 23.2 percent on a constant currency basis.

Heydude revenues of 228 million dollars, decreased 18.5 percent or 18.7 percent on a constant currency basis in the fourth quarter but increased 6 percent to 949 million dollars for the full year. Wholesale revenues decreased 1.3 percent and DTC revenues increased 18.9 percent.

Gross margin for the quarter was 55.3 percent, while adjusted gross margin improved 240 basis points to 55.7 percent. Gross margin for the year of 55.8 percent increased 350 basis points and adjusted gross margin of 56.5 percent rose 210 basis points from last year.

Fourth quarter diluted earnings per share increased to 4.16 dollars, while adjusted diluted earnings per share decreased 2.6 percent to 2.58 dollars.

Crocs expects 2024 revenues to grow between 3 to 5 percent

With respect to the first quarter of 2024, Crocs expects revenues to be down 1.5 percent to up 0.5 percent compared to first quarter 2023. Crocs brand to grow 6 percent to 8 percent, while Heydude to contract 23 percent to 20 percent compared to first quarter 2023.

Adjusted operating margin is expected of approximately 22 percent and adjusted diluted earnings per share of 2.15 dollars to 2.25 dollars.

For 2024, the company continues to expect revenue growth of 3 percent to 5 percent compared to 2023 at currency rates. Revenues for the Crocs brand to grow 4 percent to 6 percent and revenues for the Heydude brand to remain flat or increase slightly.

The company forecasts adjusted operating margin of approximately 25 percent and adjusted diluted earnings per share of 12.05 dollars to 12.50 dollars.