- Prachi Singh |
Crocs, Inc. for its third quarter reported revenues of 261.1 million dollars, a 7.3 percent or 9.3 percent increase on a constant currency basis. The company said, this growth was achieved despite the loss of approximately 15 million dollars due to operating fewer stores and business model changes. E-commerce grew 23.2 percent, wholesale 9.3 percent, and retail comparable store sales increased 15 percent.
“By executing against our strategic priorities, we drove strong quarterly performance with revenues up 7.3 percent, gross margin increasing 250 basis points to 53.3 percent and income from operations increasing 418 percent to 13.9 million dollars. Our diluted EPS was 0.07 dollar, improving significantly compared to last year’s third quarter 0.03 dollar loss. We anticipate a strong finish to the year and have increased our 2018 guidance accordingly, and we are excited about our growth prospects for 2019,” said Andrew Rees, Crocs President and Chief Executive Officer in a statement.
Review of Crocs’ third quarter results
Gross margin for the quarter was 53.3 percent, improving 250 basis points over last year’s third quarter. Crocs added that income from operations increased to 13.9 million dollars from 2.7 million dollars in last year’s third quarter, while net income attributable to common stockholders was 6.5 million dollars or 0.07 dollar per diluted share compared to a loss of 2.3 million dollars or a 0.03 dollar loss per diluted share, in last year’s third quarter.
With respect to the fourth quarter of 2018, the company expects revenues of 195 to 205 million dollars compared to 199.1 million dollars in the fourth quarter of 2017, including a negative currency impact estimated at 5 million dollars. Gross margin is expected to be approximately 80 to 100 basis points above last year’s 45.4 percent rate.
For the full year 2018, the company now expects revenues to be 4 to 5 percent higher than 2017 revenues of 1,023.5 million dollars, up from prior guidance of a low single digit increase based on the strength of its results. Gross margin to increase approximately 100 basis points over 2017 gross margin of 50.5 percent, up from our prior guidance of a 70 to 100 basis point increase.
With respect to 2019 revenues, the company expects a mid-single digit increase over 2018 revenues. Crocs anticipates that e-commerce and wholesale growth will more than offset lower retail revenues associated with our reduced store count, which it expects to reduce revenues by approximately 25 million dollars. Adding back that 25 million dollars reduction, the company expects 2019 revenues to be up mid to high single digits over our anticipated 2018 revenues.