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Crocs Targets Product Diversification and Bio-Circular Sustainability
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Crocs, Inc. (CROX - Free Report) has been making smart moves by diversifying its product range to attract more consumers. It continues to innovate with new product lines such as sandals and boots, which is driving product diversification and increasing customer appeal across different seasons.
The brand's commitment to sustainability is evident through its use of bio-circular Croslite, which now accounts for over 80% of its materials, including in its iconic Classic Clog. This innovation maintains Crocs' signature style, comfort and durability while fostering its efforts to reduce carbon footprint.
In 2021, Crocs set an ambitious goal to achieve 50% bio-circular content in its Croslite material by 2030. By August 2024, the brand was on track, having already reached 25% bio-circular content within just three years.
Factors Driving CROX Brands, Partnerships and Margins
Crocs is advancing its long-term strategy with key initiatives focused on sustainable growth. The company’s approach centers on three main pillars. These include elevating iconic products across brands to boost awareness and relevance, strategically investing in Tier 1 markets to increase market share through enhanced talent, marketing, digital and retail expansion, and diversifying its product range to appeal to a broader consumer base.
Crocs has been capitalizing on strong consumer demand across its Crocs and HEYDUDE brands, supported by effective pricing strategies. For HEYDUDE, the company is focused on strengthening its North American presence and building the Wendy and Wally franchises. New partnerships, like a Corona-themed collection featuring Wally, Wendy and Hudson styles, and the Denim and Dudes collaboration with Lee, have expanded its international reach. Crocs is also concentrating on key product offerings, including Stretch Subs, Stretch Canvas and Funk Mono.
Global brand awareness and desirability are on the rise for Crocs, with partnerships ranging from iconic brands like Toy Story and Hello Kitty to luxury collaborations with Simone Rocha. The launch of Echo Storm, available through direct-to-consumer channels and retailers like Foot Locker and JD Sports, further enhances the brand’s market position.
Crocs has benefited from declining freight costs, which have supported gross margin growth. The Crocs brand's adjusted gross margin increased by 330 basis points year over year, driven by lower inbound freight, favorable product costs, selective international price increases and reduced discounting. The HEYDUDE brand's adjusted gross margin also expanded by 200 basis points, owing to reduced freight costs and a favorable channel mix, though partially offset by infrastructure investments.
CROX’s Promising Vision
The company aims to exceed $5 billion in revenues by 2026 at a five-year compound annual growth rate of more than 17%. This target is expected to be achieved through robust digital sales, increased market share for sandals, growth in Asia and innovations in product and marketing. Management anticipates a four-fold increase in revenues from sandals by 2026.
The upcoming quarters look promising for Crocs, with third-quarter fiscal 2024 revenues expected to grow 3-5% year over year and Crocs brand revenues projected to rise 7-9%. This Zacks Rank #2 (Buy) company expects growth for HEYDUDE in the fourth quarter, supported by favorable comparisons, new retail stores, wholesale timing and international expansion. The company remains on track to achieve 3-5% overall revenue growth for 2024 at constant currency.
What’s More for CROX Stock?
Given Crocs' solid revenue growth projections, strategic initiatives, margin improvements, successful partnerships and focus on sustainability, the stock presents a compelling investment opportunity for those looking to capitalize on the company’s growth trajectory.
Buoyed by these initiatives, the company is well poised for long-term growth objectives. Shares of CROX have gained 4.6% against the industry’s decline of 19% in the past six months.
Wolverine World Wide designs, manufactures and distributes of a wide variety of casual and active apparel and footwear. The company sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for WWW’s current financial-year sales indicates a decline of almost 23% from the year-ago reported figures. The consensus mark for EPS reflects significant growth to 85 cents from 5 cents reported in the prior year. WWW has a trailing four-quarter earnings surprise of 7.5%, on average.
G-III Apparel is a manufacturer, designer and distributor of apparel and accessories under licensed brands, owned brands and private label brands. It carries a Zacks Rank #1 at present.
GIII Apparel has a trailing four-quarter earnings surprise of 118.2%, on average. The Zacks Consensus Estimate for GIII Apparel’s current financial-year sales indicates growth of 3.3% from the year-ago figure.
Steven Madden designs, sources, markets and sells fashion-forward name-brand and private-label footwear. It currently has a Zacks Rank #2.
The Zacks Consensus Estimate for Steven Madden’s 2024 earnings and sales indicates growth of 6.9% and 12.6%, respectively, from the year-ago actuals. SHOO has a trailing four-quarter average earnings surprise of 9.5%.
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Crocs Targets Product Diversification and Bio-Circular Sustainability
Crocs, Inc. (CROX - Free Report) has been making smart moves by diversifying its product range to attract more consumers. It continues to innovate with new product lines such as sandals and boots, which is driving product diversification and increasing customer appeal across different seasons.
The brand's commitment to sustainability is evident through its use of bio-circular Croslite, which now accounts for over 80% of its materials, including in its iconic Classic Clog. This innovation maintains Crocs' signature style, comfort and durability while fostering its efforts to reduce carbon footprint.
In 2021, Crocs set an ambitious goal to achieve 50% bio-circular content in its Croslite material by 2030. By August 2024, the brand was on track, having already reached 25% bio-circular content within just three years.
Factors Driving CROX Brands, Partnerships and Margins
Crocs is advancing its long-term strategy with key initiatives focused on sustainable growth. The company’s approach centers on three main pillars. These include elevating iconic products across brands to boost awareness and relevance, strategically investing in Tier 1 markets to increase market share through enhanced talent, marketing, digital and retail expansion, and diversifying its product range to appeal to a broader consumer base.
Crocs has been capitalizing on strong consumer demand across its Crocs and HEYDUDE brands, supported by effective pricing strategies. For HEYDUDE, the company is focused on strengthening its North American presence and building the Wendy and Wally franchises. New partnerships, like a Corona-themed collection featuring Wally, Wendy and Hudson styles, and the Denim and Dudes collaboration with Lee, have expanded its international reach. Crocs is also concentrating on key product offerings, including Stretch Subs, Stretch Canvas and Funk Mono.
Global brand awareness and desirability are on the rise for Crocs, with partnerships ranging from iconic brands like Toy Story and Hello Kitty to luxury collaborations with Simone Rocha. The launch of Echo Storm, available through direct-to-consumer channels and retailers like Foot Locker and JD Sports, further enhances the brand’s market position.
Crocs has benefited from declining freight costs, which have supported gross margin growth. The Crocs brand's adjusted gross margin increased by 330 basis points year over year, driven by lower inbound freight, favorable product costs, selective international price increases and reduced discounting. The HEYDUDE brand's adjusted gross margin also expanded by 200 basis points, owing to reduced freight costs and a favorable channel mix, though partially offset by infrastructure investments.
CROX’s Promising Vision
The company aims to exceed $5 billion in revenues by 2026 at a five-year compound annual growth rate of more than 17%. This target is expected to be achieved through robust digital sales, increased market share for sandals, growth in Asia and innovations in product and marketing. Management anticipates a four-fold increase in revenues from sandals by 2026.
The upcoming quarters look promising for Crocs, with third-quarter fiscal 2024 revenues expected to grow 3-5% year over year and Crocs brand revenues projected to rise 7-9%. This Zacks Rank #2 (Buy) company expects growth for HEYDUDE in the fourth quarter, supported by favorable comparisons, new retail stores, wholesale timing and international expansion. The company remains on track to achieve 3-5% overall revenue growth for 2024 at constant currency.
What’s More for CROX Stock?
Given Crocs' solid revenue growth projections, strategic initiatives, margin improvements, successful partnerships and focus on sustainability, the stock presents a compelling investment opportunity for those looking to capitalize on the company’s growth trajectory.
Buoyed by these initiatives, the company is well poised for long-term growth objectives. Shares of CROX have gained 4.6% against the industry’s decline of 19% in the past six months.
Image Source: Zacks Investment Research
Three Other Stocks Showing Potential
Some other top-ranked stocks are Wolverine World Wide (WWW - Free Report) , GIII Apparel Group (GIII - Free Report) and Steven Madden, Ltd. (SHOO - Free Report) .
Wolverine World Wide designs, manufactures and distributes of a wide variety of casual and active apparel and footwear. The company sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for WWW’s current financial-year sales indicates a decline of almost 23% from the year-ago reported figures. The consensus mark for EPS reflects significant growth to 85 cents from 5 cents reported in the prior year. WWW has a trailing four-quarter earnings surprise of 7.5%, on average.
G-III Apparel is a manufacturer, designer and distributor of apparel and accessories under licensed brands, owned brands and private label brands. It carries a Zacks Rank #1 at present.
GIII Apparel has a trailing four-quarter earnings surprise of 118.2%, on average. The Zacks Consensus Estimate for GIII Apparel’s current financial-year sales indicates growth of 3.3% from the year-ago figure.
Steven Madden designs, sources, markets and sells fashion-forward name-brand and private-label footwear. It currently has a Zacks Rank #2.
The Zacks Consensus Estimate for Steven Madden’s 2024 earnings and sales indicates growth of 6.9% and 12.6%, respectively, from the year-ago actuals. SHOO has a trailing four-quarter average earnings surprise of 9.5%.