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Crocs, Inc. (NASDAQ:CROX) shares are trading higher after reporting first-quarter results. The company is reducing revenue expectations for its HEYDUDE unit.
The company reported adjusted earnings per share of $3.02, beating the analyst consensus of $2.23.
Quarterly revenues of $939 million beat the street view of $881.712 million. First quarter revenue increased 6% over last year.
In the quarter under review, Crocs held inventories worth $392 million compared to $476 million a year ago.
Segment-wise, Crocs Brand revenues increased by 14.6% to $744 million, or 15.6% on a constant currency basis, while HEYDUDE brand revenues decreased by 17.2% to $195 million.
“As we continue to prioritize brand health in the North American market for HEYDUDE, and considering what we are seeing quarter-to-date, we are reducing our revenue expectations for the brand for the balance of the year,” said Andrew Rees, Chief Executive Officer.
Direct-to-consumer revenues grew 11.8%, or 12.3%, on a constant currency basis. Wholesale revenues grew 3.2%, or 4.1%, on a constant currency basis.
Adjusted gross margin improved 180 basis points to 56.0% compared to 54.2%. Adjusted income from operations of $255 million increased 3.1% from $247 million, resulting in an adjusted operating margin of 27.1%.
The company exited the quarter with cash and equivalents of $159 million compared to $126 million a year ago.
Outlook: Crocs expects second-quarter adjusted diluted earnings per share of $3.40 to $3.55 versus the $3.47 estimate.
The company sees second-quarter revenues to be up 1%-3% compared to the second quarter of 2023. Crocs Brand is expected to grow 7% to 9% on a year over year basis in the second quarter. HEYDUDE Brand is likely to contract (19%) to (17%) year over year.
For FY24, the company raised adjusted diluted earnings per share outook, which is expected in the range of $12.25 to $12.73 versus the $12.43 estimate (prior view: $12.05 to $12.50). The company continues to expect full-year 2024 revenue growth of 3% to 5% year over year. Revenues for the Crocs Brand is expected to grow approximately 7% to 9% (prior view: 4% to 6%). Revenues for the HEYDUDE Brand to now contract (10%) to (8%) (prior view: flat to slightly up).
“We are confident in the long-term opportunity for the HEYDUDE brand and are excited to welcome a new HEYDUDE President to fully unlock its future potential,” Rees added.
Crocs also announced the appointment of Susan Healy as Executive Vice President and Chief Financial Officer, effective June 3. Healy succeeds Anne Mehlman, who was recently appointed President of the Crocs Brand.
Price Action: CROX shares are trading higher by 9.77% to $138.00 at last check Tuesday.
Photo via Wikimedia Commons
Posted In: CROX
