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Crocs (CROX) Earnings & Revenues Beat in Q1 on Solid Demand
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Crocs, Inc. (CROX - Free Report) has posted impressive results for first-quarter 2023, wherein the top and bottom lines not only surpassed the Zacks Consensus Estimate but also improved year over year. Solid consumer demand in the new clog and sandal introductions, as well as continued momentum in the HEYDUDE brand and robust DTC growth, contributed to the quarterly results.
Driven by the solid quarterly results, the Zacks Rank #2 (Buy) stock has gained 25.1% in the past three months compared with the industry’s growth of 0.2%.
However, CROX fell more than 9% before the trading session on Apr 27.
Q1 in Detail
Crocs’ adjusted earnings were $2.61 per share, surpassing the Zacks Consensus Estimate of $2.13 and our estimate of $2.16. The figure also advanced 27.3% year over year.
Image Source: Zacks Investment Research
Revenues advanced 33.9% (or 36.2% on a constant-currency basis) year over year to $884.2 million in the reported quarter and beat the Zacks Consensus Estimate of $860 million and our estimate of $852.5 million. The top line witnessed growth across all regions and channels.
Direct-to-consumer revenues rose 33.5% year over year, whereas Wholesale revenues advanced 34.2% year over year in the quarter under review.
The Crocs brand’s revenues grew 19% year over year to $648.8 million and surpassed our estimate of $631.7 million. The HEYDUDE brand’s revenues advanced 104.8% year over year to $235.4 million, exceeding our estimate of $2220.8 million.
Total revenues in the Americas were up 10% year over year to $351.3 million. This lagged our estimate of $390.4 million. Revenues in the Asia Pacific amounted to $140 million and surpassed our estimate of $111.9 million, reflecting a year-over-year increase of 46%. The EMEA region witnessed revenue growth of 21.2% to $157.5 million and beat our estimate of $129.4 million.
The adjusted gross profit rose 35% year over year to $479.7 million. However, the adjusted gross margin expanded 30 basis points (bps) to 54.2%.
Meanwhile, adjusted SG&A expenses, as a percentage of revenues, contracted 100 bps year over year to 26.3%. This excludes $8.8 million of costs related to discontinued technology projects, and the HEYDUDE acquisition and integration.
Adjusted operating income grew 41% year over year to $247 million. The adjusted operating margin expanded 130 bps to 27.9% from the prior-year quarter’s 28.6%.
Financial Details
The company ended the quarter with cash and cash equivalents of $125.7 million, long-term borrowings of $2,250.3 million, and stockholders’ equity of $968.5 million. The company’s liquidity position remains strong, with $550.7 million in available borrowing capacity.
Management incurred a capital expenditure of $27.6 million in the quarter under review. The company anticipates a capital expenditure of $165-$180 million in 2023 related to the expansion of its distribution capabilities, including the new HEYDUDE distribution center in Las Vegas, the implementation of new technology systems for HEYDUDE and the expansion of its corporate facilities to support growth.
Management raised its guidance for 2023. For 2023, revenues are anticipated to grow 11-14%, up from the earlier mentioned 10-13% to $3.9-$4 billion. Adjusted earnings are envisioned to be $11.17-$11.73, up from the prior stated $11-$11.31. The adjusted operating margin is envisioned to be 26-27% compared with the previously communicated 26%. The GAAP tax rate is expected to be 23%, whereas the adjusted tax rate is likely to be 20%.
For second-quarter 2023, revenues are expected to be grow 6-9% to $1,026-$1,049 million. Adjusted earnings are forecast to be $2.83-$2.98 and the adjusted operating margin is likely to be 26%.
The Zacks Consensus Estimate for HGV’s 2023 sales and EPS indicates a rise of 7.3% and 3.4%, respectively, from the year-ago period’s reported levels.
PVH Corp currently carries a Zacks Rank #2. PVH has a trailing four-quarter earnings surprise of 23.4%, on average. PVH has a long-term earnings growth rate of 16.1%.
The Zacks Consensus Estimate for PVH Corp’s current financial year’s sales and EPS indicates declines of 3.8% and 9.8%, respectively, from the year-ago period’s reported levels.
H&R Block prodes assisted income tax return preparation and do-it-yourself tax return preparation services. HRB currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for H&R Block’s current financial year’s EPS suggests growth of 9.4% from the year-ago reported figure. H&R Block has a trailing four-quarter earnings surprise of 10.7%, on average.
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Crocs (CROX) Earnings & Revenues Beat in Q1 on Solid Demand
Crocs, Inc. (CROX - Free Report) has posted impressive results for first-quarter 2023, wherein the top and bottom lines not only surpassed the Zacks Consensus Estimate but also improved year over year. Solid consumer demand in the new clog and sandal introductions, as well as continued momentum in the HEYDUDE brand and robust DTC growth, contributed to the quarterly results.
Driven by the solid quarterly results, the Zacks Rank #2 (Buy) stock has gained 25.1% in the past three months compared with the industry’s growth of 0.2%.
However, CROX fell more than 9% before the trading session on Apr 27.
Q1 in Detail
Crocs’ adjusted earnings were $2.61 per share, surpassing the Zacks Consensus Estimate of $2.13 and our estimate of $2.16. The figure also advanced 27.3% year over year.
Image Source: Zacks Investment Research
Revenues advanced 33.9% (or 36.2% on a constant-currency basis) year over year to $884.2 million in the reported quarter and beat the Zacks Consensus Estimate of $860 million and our estimate of $852.5 million. The top line witnessed growth across all regions and channels.
Direct-to-consumer revenues rose 33.5% year over year, whereas Wholesale revenues advanced 34.2% year over year in the quarter under review.
The Crocs brand’s revenues grew 19% year over year to $648.8 million and surpassed our estimate of $631.7 million. The HEYDUDE brand’s revenues advanced 104.8% year over year to $235.4 million, exceeding our estimate of $2220.8 million.
Total revenues in the Americas were up 10% year over year to $351.3 million. This lagged our estimate of $390.4 million. Revenues in the Asia Pacific amounted to $140 million and surpassed our estimate of $111.9 million, reflecting a year-over-year increase of 46%. The EMEA region witnessed revenue growth of 21.2% to $157.5 million and beat our estimate of $129.4 million.
The adjusted gross profit rose 35% year over year to $479.7 million. However, the adjusted gross margin expanded 30 basis points (bps) to 54.2%.
Meanwhile, adjusted SG&A expenses, as a percentage of revenues, contracted 100 bps year over year to 26.3%. This excludes $8.8 million of costs related to discontinued technology projects, and the HEYDUDE acquisition and integration.
Adjusted operating income grew 41% year over year to $247 million. The adjusted operating margin expanded 130 bps to 27.9% from the prior-year quarter’s 28.6%.
Financial Details
The company ended the quarter with cash and cash equivalents of $125.7 million, long-term borrowings of $2,250.3 million, and stockholders’ equity of $968.5 million. The company’s liquidity position remains strong, with $550.7 million in available borrowing capacity.
Management incurred a capital expenditure of $27.6 million in the quarter under review. The company anticipates a capital expenditure of $165-$180 million in 2023 related to the expansion of its distribution capabilities, including the new HEYDUDE distribution center in Las Vegas, the implementation of new technology systems for HEYDUDE and the expansion of its corporate facilities to support growth.
Crocs, Inc. Price, Consensus and EPS Surprise
Crocs, Inc. price-consensus-eps-surprise-chart | Crocs, Inc. Quote
Outlook
Management raised its guidance for 2023. For 2023, revenues are anticipated to grow 11-14%, up from the earlier mentioned 10-13% to $3.9-$4 billion. Adjusted earnings are envisioned to be $11.17-$11.73, up from the prior stated $11-$11.31. The adjusted operating margin is envisioned to be 26-27% compared with the previously communicated 26%. The GAAP tax rate is expected to be 23%, whereas the adjusted tax rate is likely to be 20%.
For second-quarter 2023, revenues are expected to be grow 6-9% to $1,026-$1,049 million. Adjusted earnings are forecast to be $2.83-$2.98 and the adjusted operating margin is likely to be 26%.
Other Stocks to Consider
Some other top-ranked companies are Hilton Grand Vacations (HGV - Free Report) , PVH Corp (PVH - Free Report) and H&R Block (HRB - Free Report) .
Hilton Grand Vacations currently sports a Zacks Rank #1 (Strong Buy). HGV has a trailing four-quarter earnings surprise of 12.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for HGV’s 2023 sales and EPS indicates a rise of 7.3% and 3.4%, respectively, from the year-ago period’s reported levels.
PVH Corp currently carries a Zacks Rank #2. PVH has a trailing four-quarter earnings surprise of 23.4%, on average. PVH has a long-term earnings growth rate of 16.1%.
The Zacks Consensus Estimate for PVH Corp’s current financial year’s sales and EPS indicates declines of 3.8% and 9.8%, respectively, from the year-ago period’s reported levels.
H&R Block prodes assisted income tax return preparation and do-it-yourself tax return preparation services. HRB currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for H&R Block’s current financial year’s EPS suggests growth of 9.4% from the year-ago reported figure. H&R Block has a trailing four-quarter earnings surprise of 10.7%, on average.