We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why Investors Should Retain Crocs (CROX) Stock for Now
Read MoreHide Full Article
Crocs, Inc. (CROX - Free Report) has been gaining from robust consumer demand, and strength in the Crocs and HEYDUDE brands. This, along with a solid online show and other key initiatives to deliver sustainable growth, bodes well. Driven by these factors, the company delivered robust third-quarter 2022 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate for the 10th straight quarter. Also, sales and earnings improved year over year.
Consequently, the Zacks Rank #3 (Hold) stock has gained 24.9% in the past three months against the industry’s decline of 1.5%. Notably, the Consumer Discretionary sector witnessed 1.4% growth.
An uptrend in the Zacks Consensus Estimate echoes the same sentiment. The Zacks Consensus Estimate for Crocs’ 2022 sales and EPS suggests growth of 51.5% and 23.7%, respectively, from the year-ago period’s reported numbers. Earnings estimates for the current financial year have increased 2.5% to $10.29 over the past 60 days.
Image Source: Zacks Investment Research
Let’s Delve Deeper
Crocs has been gaining from its acquisition of HEYDUDE, which sells lightweight, casual shoes and sandals for men, women and children. Notably, the HEYDUDE brand’s revenues surged 87% year over year to $269.4 million in the third quarter. Management remains optimistic about the HEYDUDE brand. For 2022, revenues related to the HEYDUDE buyout are likely to be $850-$890 million. Also, the brand is expected to attain $1 billion in revenues in 2023.
The company has been making significant progress in expanding digital and omnichannel capabilities. We note that digital sales advanced 22% on a cc basis year over year in the third quarter, representing 37.4% of sales. This was mainly driven by growth across all regions and customer acquisitions. Increased focus on the Crocs mobile app and global social platforms aided digital sales. Gains from strategic collaborations, influencer campaigns along with digital and social marketing efforts remained upsides.
Crocs outlined its long-term strategy and key initiatives to deliver sustainable growth. It expects to generate revenues of more than $5 billion by 2026, representing compounded annual growth rate (CAGR) of more than 17% in the next five years. It expects to attain the revenue target, driven by strong digital sales, improved market share for sandals, growth in Asia, and innovative product and marketing. Management expects four times revenue growth in sandals by 2026. The company sees long-term opportunities in Asia, primarily in China, which is the second-largest footwear market in the world.
Management expects revenue growth (witnessing a CAGR of 25%) and to represent 24% of total revenues in 2026. The company targets at least 50% of total revenues to come from digital channels by the end of 2026. Driven by strong revenue growth, the company anticipates improved profitability and cash flows through 2026. It expects the adjusted operating margin to be more than 26% and annual free cash flow in excess of $1 billion by the end of 2026.
Conclusion
Although the company continues to witness inflation, higher air freight and logistic costs, and the adverse impacts of currency, we believe that online strength, solid demand and well-chalked-out endeavors will help Crocs sustain its stellar show. Also, a long-term earnings growth rate of 15% and a VGM score of B reflect its inherent strength.
lululemon presently carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 10.4%, on average. LULU has an expected long-term earnings growth rate of 20%.
The Zacks Consensus Estimate for lululemon’s current financial-year sales and earnings suggests growth of 26.7% and 26.8% from the year-ago period’s reported numbers, respectively.
Boyd Gaming currently carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 11.2%, on average. BYD has a long-term earnings growth rate of 12.8%.
The Zacks Consensus Estimate for BYD’s current financial year sales and EPS indicates growth of 4.4% and 11.7%, respectively, from the year-ago period’s reported levels.
Hyatt currently has a Zacks Rank #2. H has a trailing four-quarter earnings surprise of 652.3%, on average. The stock has gained 19.4% in the past year.
The Zacks Consensus Estimate for H’s current financial year's sales and EPS indicates surges of 92.2% and 121%, respectively, from the year-ago period’s reported levels.
See More Zacks Research for These Tickers
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Here's Why Investors Should Retain Crocs (CROX) Stock for Now
Crocs, Inc. (CROX - Free Report) has been gaining from robust consumer demand, and strength in the Crocs and HEYDUDE brands. This, along with a solid online show and other key initiatives to deliver sustainable growth, bodes well. Driven by these factors, the company delivered robust third-quarter 2022 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate for the 10th straight quarter. Also, sales and earnings improved year over year.
Consequently, the Zacks Rank #3 (Hold) stock has gained 24.9% in the past three months against the industry’s decline of 1.5%. Notably, the Consumer Discretionary sector witnessed 1.4% growth.
An uptrend in the Zacks Consensus Estimate echoes the same sentiment. The Zacks Consensus Estimate for Crocs’ 2022 sales and EPS suggests growth of 51.5% and 23.7%, respectively, from the year-ago period’s reported numbers. Earnings estimates for the current financial year have increased 2.5% to $10.29 over the past 60 days.
Image Source: Zacks Investment Research
Let’s Delve Deeper
Crocs has been gaining from its acquisition of HEYDUDE, which sells lightweight, casual shoes and sandals for men, women and children. Notably, the HEYDUDE brand’s revenues surged 87% year over year to $269.4 million in the third quarter. Management remains optimistic about the HEYDUDE brand. For 2022, revenues related to the HEYDUDE buyout are likely to be $850-$890 million. Also, the brand is expected to attain $1 billion in revenues in 2023.
The company has been making significant progress in expanding digital and omnichannel capabilities. We note that digital sales advanced 22% on a cc basis year over year in the third quarter, representing 37.4% of sales. This was mainly driven by growth across all regions and customer acquisitions. Increased focus on the Crocs mobile app and global social platforms aided digital sales. Gains from strategic collaborations, influencer campaigns along with digital and social marketing efforts remained upsides.
Crocs outlined its long-term strategy and key initiatives to deliver sustainable growth. It expects to generate revenues of more than $5 billion by 2026, representing compounded annual growth rate (CAGR) of more than 17% in the next five years. It expects to attain the revenue target, driven by strong digital sales, improved market share for sandals, growth in Asia, and innovative product and marketing. Management expects four times revenue growth in sandals by 2026. The company sees long-term opportunities in Asia, primarily in China, which is the second-largest footwear market in the world.
Management expects revenue growth (witnessing a CAGR of 25%) and to represent 24% of total revenues in 2026. The company targets at least 50% of total revenues to come from digital channels by the end of 2026. Driven by strong revenue growth, the company anticipates improved profitability and cash flows through 2026. It expects the adjusted operating margin to be more than 26% and annual free cash flow in excess of $1 billion by the end of 2026.
Conclusion
Although the company continues to witness inflation, higher air freight and logistic costs, and the adverse impacts of currency, we believe that online strength, solid demand and well-chalked-out endeavors will help Crocs sustain its stellar show. Also, a long-term earnings growth rate of 15% and a VGM score of B reflect its inherent strength.
Stocks to Consider
Some better-ranked companies from the Consumer Discretionary sector are lululemon athletica (LULU - Free Report) , Boyd Gaming (BYD - Free Report) and Hyatt (H - Free Report) .
lululemon presently carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 10.4%, on average. LULU has an expected long-term earnings growth rate of 20%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for lululemon’s current financial-year sales and earnings suggests growth of 26.7% and 26.8% from the year-ago period’s reported numbers, respectively.
Boyd Gaming currently carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 11.2%, on average. BYD has a long-term earnings growth rate of 12.8%.
The Zacks Consensus Estimate for BYD’s current financial year sales and EPS indicates growth of 4.4% and 11.7%, respectively, from the year-ago period’s reported levels.
Hyatt currently has a Zacks Rank #2. H has a trailing four-quarter earnings surprise of 652.3%, on average. The stock has gained 19.4% in the past year.
The Zacks Consensus Estimate for H’s current financial year's sales and EPS indicates surges of 92.2% and 121%, respectively, from the year-ago period’s reported levels.