Crocs Stock Is Having A Cakewalk: Here's Why

Crocs, Inc. CROX shares are trading higher in the premarket session on Thursday.

The company reported fourth-quarter adjusted earnings per share of $2.58, beating the street view of $2.37.

Quarterly revenue of $960.09 million beat the street view of $958.218 million. Revenues increased 1.6% year over year.

In the quarter under review, the company said it updated its reportable operating segments to Crocs Brand and HEYDUDE Brand. The Crocs brand includes ‘North America,’ ‘Asia Pacific,’ and ‘EMEALA’ segments.

Fourth quarter Crocs Brand revenues were $732 million, an increase of 10% year over year, or 9.9% on a constant currency basis. 

HEYDUDE Brand revenues were $228 million, a decrease of 18.5% year over year, or 18.7% on a constant currency basis.

Fourth quarter adjusted gross margin improved 240 basis points to 55.7% compared to 53.3% in the same period last year.

Adjusted income from operations fell 6.0% to $231 million, and adjusted operating margin fell to 24.1% from 26%.

Cash and equivalents were $149 million as of December 31, 2023, while inventories decreased 18.3% to $385 million compared to $472 million as of December 31, 2022.

Outlook: For FY24, the company expects adjusted EPS of $12.05-$12.50 versus the $11.87 estimate. 

The company continues to expect total revenue growth of 3% to 5% on a year-over-year basis. Revenues for the Crocs Brand is expected to grow 4% to 6%, while revenues for the HEYDUDE Brand is projected to be flat to slightly up. 

For the first quarter, the company expects adjusted EPS of $2.15-$2.25 versus the $2.24 estimate. Revenues are expected to be down 1.5% to up 0.5% year over year. In the first quarter, Crocs Brand is projected to grow 6%-8%, while HEYDUDE brand is expected to contract 23% to 20%.

Price Action: CROX shares are trading higher by 6.55% to $115.47 premarket on the last check Thursday. 

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