Crocs, Inc. CROX posted solid results for first-quarter 2024, wherein the top and bottom lines surpassed the Zacks Consensus Estimate and grew year over year. Its adjusted earnings of $3.02 per share beat the consensus estimate of $2.22 and rose 15.7% year over year.
We note that this Zacks Rank #3 (Hold) company has gained 19.3% in the past three months compared with the industry’s 8.1% growth.
Q1 in Detail
Revenues rose 6.2% year over year to $938.6 million and beat the Zacks Consensus Estimate of $883 million. On a constant-currency basis, revenues improved 6.9% year over year. The top line witnessed solid growth in the direct-to-consumer (“DTC”) channel and both regions. DTC revenues increased 11.8% while wholesale revenues rose 3.2%.
The Crocs brand’s revenues grew 14.6% year over year to $744 million, including an 18.3% increase in DTC revenues and a 12.5% rise in wholesale revenues. DTC comparable sales for the Crocs brand rose 14.7%.
Crocs, Inc. Price, Consensus and EPS Surprise
Crocs, Inc. price-consensus-eps-surprise-chart | Crocs, Inc. Quote
The HEYDUDE brand’s revenues fell 17.2% year over year to $195 million. The decline was due to a 19.7% decline in wholesale revenues and an 11% decrease in DTC revenues. DTC comparable sales for the HEYDUDE brand fell 18.4%.
Total revenues in North America were up 9% year over year to $383 million while revenues in the International region rose 21.3% to $361 million.
The adjusted gross profit rose 9.6% year over year to $522.1 million. The adjusted gross margin expanded 170 basis points (bps) to 55.6%. Adjusted SG&A expenses, as a percentage of revenues, increased 250 bps to 28.8%.
Adjusted operating income rose 3.2% year over year to $254.8 million. The adjusted operating margin contracted 80 bps to 27.1% from the year-ago quarter’s 27.9%.
Financial Details
The company ended the quarter with cash and cash equivalents of $159.3 million, long-term borrowings of $1.7 billion and stockholders’ equity of $1.6 billion.
Management incurred a capital expenditure of $16 million. The company anticipates a capital expenditure of $120-$130 million in 2024 related to the expansion of its distribution capabilities.
Outlook
Management has issued guidance for the second quarter and 2024. For the year, the company anticipates year-over-year revenue growth in the range of 3-5% at constant currency. Revenues for the Crocs brand are expected to rise 7-9%, while the metric for the HEYDUDE brand is forecast to decline in the band of 8-10%.
The adjusted operating margin is envisioned to be 25%. The combined GAAP tax rate is expected to be 21.5% whereas the adjusted tax rate is likely to be 18%. Adjusted earnings are envisioned to be in the range of $12.25-$12.73 per share, up from $10.92 recorded last year.
For second-quarter 2024, the company expects revenues in the range of up 1-3% year over year. Crocs brand’s revenues are likely to grow in the range of 7-9% year over year while HEYDUDE brand’s revenues are anticipated to plunge 17-19%. Adjusted earnings are forecast to be in the range of $3.40-$3.55 per share with the adjusted operating margin likely to be 26.5%.
Key Picks
Some better-ranked companies are Royal Caribbean RCL, Gildan Activewear GIL and Duluth Holdings DLTH.
Royal Caribbean sports a Zacks Rank #1 (Strong Buy) at present. RCL has a trailing four-quarter earnings surprise of 18.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for RCL’s 2024 sales and earnings per share (EPS) indicates increases of 16.9% and 62.3%, respectively, from the year-ago period’s reported levels.
Gildan Activewear carries a Zacks Rank #2 (Buy) at present. GIL has a trailing four-quarter earnings surprise of 5.6%, on average.
The consensus estimate for Gildan Activewear’s current financial-year EPS suggests growth of 14.4% from the year-ago corresponding figure.
Duluth Holdings carries a Zacks Rank of 2 at present. DLTH has a trailing four-quarter earnings surprise of 9.2%, on average.
The Zacks Consensus Estimate for Duluth Holdings’ current financial-year sales and EPS suggests growth of 0.8% and 75%, respectively, from the year-ago corresponding figures.
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Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report
Crocs, Inc. (CROX) : Free Stock Analysis Report
Gildan Activewear, Inc. (GIL) : Free Stock Analysis Report
Duluth Holdings Inc. (DLTH) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
