Crocs raised its earnings guidance for the year after reported better-than-expected results for the second quarter. However, Hey Dude sales were still in decline.
Altogether, the Broomfield, Colo.-based footwear company reported better-than-expected results for the first quarter, which included a 3.6 percent revenue increase from the prior year to $1.11 billion. This was slightly ahead of the $1.1 billion expected by analysts surveyed by Yahoo Finance. Q2 adjusted diluted EPS was up 11.7 percent to $4.01, also ahead of the $3.56 expected by analysts.
Crocs last quarter said it was looking for Q2 revenues to grow between 1 and 3 percent, with adjusted diluted earnings per share in the range of $3.40 and $3.55.
Crocs brand revenues once again drove the strong results, with sales up 9.7 percent to $914 million. These results reflected a 12.5 percent increase in direct-to-consumer and a 6.9 increase in wholesale. Revenues for the Hey Dude brand decreased 17.5 percent to $198 million, which reflected declines in both DTC and wholesale.
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“Strength in the quarter was led by our Crocs brand with exceptional growth internationally,” said Crocs Inc. chief executive officer Andrew Rees. “As it relates to Hey Dude, we are making improvements to support long-term brand health and are focused on driving brand heat by accelerating marketing in the second half of the year.”
In November, Crocs unveiled a retail strategy for Hey Dude based off of the current one in place for the Crocs brand. This involves strengthening strategic wholesale partnerships in the family channel, sporting goods sector, mall-based specialty channel and larger regional chains. It also means exiting accounts with smaller and less essential wholesale partners. Results thus far have been slow to come, though some analysts say that recovery is more likely to happen in the second half of the year.
Given the results, Crocs Inc. raised its EPS guidance for 2024 and now expects adjusted diluted earnings per share for the year to be between $12.45 and $12.90. Revenues for the year are still expected grow between 3 and 5 percent. By brand, Crocs is still expected to grow between 7 and 9 percent and Hey Dude is still expected to be down between 10 and 8 percent.
For the third quarter, Crocs expects revenues to be between down 1.5 percent and up 0.5 percent compared to the prior year. Crocs brand revenues are expected to grow between 3 and 5 percent and Hey Dude revenues are expected to be down between 16 and 14 percent. Adjusted diluted earnings per share are expected to be between $2.95 and $3.10.
