Key Highlights:
- Crocs reported adjusted earnings per share of $2.23, which beat analyst expectations.
- Crocs raised its full-year revenue guidance, anticipating growth of 60% to 65%.
- The shoemaker also committed to transition to net-zero emissions by 2030.
Exceeding expectations
Crocs outperformed on both the top and bottom lines boosting its full-year revenue outlook despite supply chain difficulties related to the Covid-19 epidemic. The shares of the shoemaker rose 9.96 percent on 22nd July, ending at $131.93. The stock reached a fresh 52-week high of $136.50 at one point.
Here’s how the firm fared in its second quarter, which ended June 30, compared to what analysts polled by Refinitiv expected:
- Earnings per share: $2.23 adjusted, compared to $1.60 anticipated.
- Revenue: $640.8 million against the anticipated $565.2 million
Crocs increased its full-year projection and now anticipates revenue to increase by 60 to 65 percent compared to 2020. Last quarter, the company upped its sales forecast for this year, expecting a 40 percent to 50 percent increase. The shoemaker anticipates a revenue increase of 60 to 70 percent in the third quarter compared to last year’s third-quarter revenue of $361.7 million.
Supply chain disruptions
Crocs sales have increased as people seek more comfortable footwear during the epidemic. Its stock has increased by more than 90% year to date. CEO Andrew Rees, on the other hand, voiced concern about the short-term effects of Covid-19 on the shoemaker’s supply. He anticipates that Covid will result in temporary facility closures in Vietnam, the company’s most important production location.
During a conference call with analysts, Rees stated that “global logistics remain complex and volatile” while the globe recovers from the epidemic. Crocs, on the other hand, remains positive about its company, he added, noting that supply issues were included in the revised estimate.
Croc’s net income increased to $319 million, or $4.93 per share, in the second quarter, up from $56.6 million, or 83 cents per share, the previous year. Excluding one-time items, the firm earned $2.23 per share, above the $1.60 predicted by Refinitiv analysts polled.
Revenues increased by 93 percent to $640.8 million in the second quarter, up from $331.5 million the previous year. Digital sales increased by 25.4 percent to account for 36.4 percent of revenue, up from 56.1 percent a year ago.
Comfort without carbon
During the second quarter, revenue in the Americas increased by 135.3 percent. Crocs have pledged to achieve net-zero emissions by 2030, a project dubbed “comfort without carbon” by Rees.
“I think we can achieve sustained, highly lucrative development while also positively impacting our world and communities,” Rees added.
