Yahoo Finance Crocs, Inc. (CROX) Thriving on Solid Digital Sales Growth
Crocs, Inc. CROX is making significant progress in expanding digital and omni-channel capabilities. The company is also benefiting from strong consumer demand. This was seen in fourth-quarter 2022, with both the top line and bottom line beating the Zacks Consensus Estimate and increasing year over year. The company also remains well positioned from its recent acquisition of HEYDUDE.
Digital Sales: Key Factor
CROX increased its focus on the Crocs mobile app and global social platforms which aided its digital sales. In the fourth quarter, the company’s digital sales advanced 80% year over year, indicating significant growth from the prior-year quarter’s figure of 41%. The metric represented 45.1% of total revenues, up from the year-ago quarter’s figure of 40.3%. This growth was driven by refined user experience, new products and marketing activities.
What Else Is Driving Growth
The company recently added HEYDUDE to its portfolio of brands. Crocs hopes to boost the value of its quickly expanding footwear business with this acquisition. This is the second highly profitable, high-growth brand that Crocs has added to its portfolio. The acquisition is probably going to increase Crocs' online brand penetration and diversify its portfolio of brands.
Notably, the HEYDUDE brand’s fourth-quarter revenues advanced 36.6% year over year to $279 million. For 2023, revenues related to the HEYDUDE buyout are likely to grow in mid-20% range on a reported basis. Management remains optimistic about the HEYDUDE brand and expects the brand to attain $1 billion in revenues in 2023.
Crocs sandal business is also aiding the company’s growth. During the second half of 2022, the company’s sandal business grew 31% driven by introduction of new products and effective sandal-specific marketing. The company remains optimistic about sandal growth in 2023 and expects it to be the fastest-growing product category in 2023 by reaching approximately $400 million in sales.
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Wrapping Up
The company is well positioned in its industry owing to its strong consumer demands. It expects first-quarter 2023 revenues to grow 27-30% from the year-ago quarter’s figure. In the said period, the company also expects adjusted earnings in the range of $2.06-$2.19 per share.
Shares of this Zacks Rank #1 (Strong Buy) company have rallied 71.9% in the past six months compared with the industry’s growth of 17.7%.
3 Key Picks
Some other top-ranked stocks are Kontoor Brands, Inc. KTB, Ralph Lauren Corporation RL and NIKE, Inc. NKE.
KTB has an expected long-term earnings growth rate of 8% and a trailing four-quarter earnings surprise of 12.4%, on average. Kontoor Brands currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Kontoor Brands’ current financial year sales and earnings suggests growth of 2.5% and 5.8%, respectively, from the year-ago reported numbers.
The Ralph Lauren is a major designer, marketer and distributor of premium lifestyle products. It currently flaunts a Zacks Rank of 1. RL has a trailing four-quarter earnings surprise of 23.6%, on average.
The Zacks Consensus Estimate for Ralph Lauren’s current financial year sales suggests growth of 2.5% from the prior-year reported numbers.
NIKE, engaged in the business of designing, developing and marketing of athletic footwear, currently carries a Zacks Rank of 2 (Buy). NKE has a trailing four-quarter earnings surprise of 24%, on average.
The Zacks Consensus Estimate for NIKE’s current financial year sales suggests growth of 8.8% from the corresponding year-ago reported figures.
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NIKE, Inc. (NKE) : Free Stock Analysis Report
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Crocs, Inc. (CROX) : Free Stock Analysis Report
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