Crocs Poised For Expansion, Analyst Counts China, India, Western Europe Among Biggest Growth Markets

BofA Securities analyst Christopher Nardone reiterated a Buy rating on the shares of footwear company Crocs Inc CROX with a price forecast of $153.

The analyst still believes management can meet its goal of modestly growing Crocs N.A. sales in 2025. Key factors include management's positive outlook on a strong wholesale order book for the next six months, along with the analyst’s optimistic view of upcoming product innovations, which have already received favorable feedback from wholesale partners.

These innovations include the InMotion clog (currently available at a $60 price point), global and product expansions of popular sandal styles like the Getaway, Miami, and Brooklyn, a greater focus on slippers (primarily in the second half of the year), and continued growth in Jibbitz and collaborations (with a full pipeline for this year).

For N.A. sales growth this year, the analyst anticipates a decline in first-quarter across both channels, followed by a rebound in second-quarter.

First-quarter will face challenges from the leap year, Easter shifting to second-quarter, and a tougher wholesale comparison, with brick-and-mortar stores showing strong double-digit growth in first-quarter 2024, said the analyst.

International sales will remain the primary driver of overall brand growth for Crocs in 2025 and beyond, the analyst noted.

Also Read: James Bond’s New Era: Amazon MGM Studios Takes Creative Reins of Franchise

Crocs’ Growth Markets

According to the analyst, the biggest growth markets for Crocs this year, in terms of dollar value, are expected to be China, India, and Western Europe, including the UK, Germany, and France.

In 2024, India posed a challenge for the company due to regulatory hurdles that hindered supply from meeting demand. However, as 2025 progresses, the company anticipates an improvement in the supply situation.

With four factories in India, up from three last year, Crocs plans to scale up production and increase output by the end of the year. This expansion will enable quicker distribution of sandals in India, a key move given the strong demand for sandals in the market.

Heydude is still in the early stages of recovery. Fourth-quarter progress was promising, with better-than-expected digital performance and a return to positive DTC growth, the analyst said.

The analyst expects gross margins in 2025 to be similar to last year. But there may be a slight decline, according to official guidance.

Management plans to increase marketing spending to 10% of sales in 2025, up from 9% in 2024. This includes more investment in both brands, with Heydude focusing on brand awareness.

The analyst is encouraged by the recent partnerships, including Sydney Sweeney, Jelly Roll, and Travis Hunter. Crocs will also boost influencer spending and maintain focus on Tier-1 markets.

HeyDude’s continued progress will drive multiple growth, the analyst added. Also, the company’s cash flow potential is undervalued.

Price Action: Crocs shares are trading higher by 0.25% at $109.15 at the last check Friday.

Read Next: