Crocs (CROX) Up 12% After Q4 Beat
Shares of Crocs (CROX) are breaking out to multi-month highs above 120 today after Q4 earnings sailed past expectations (not a complete surprise given the January 8 pre-release) thanks to outperformance of the Crocs brand (HeyDude brand was in line with expectations).
Revenue in Q4 was up 1.6% to $960.1 million (a very slight beat) while EPS of $2.58 beat by $0.21. Forward guidance (full-year 2024) for revenue was repeated from January 8th while EPS was guided ahead of expectations.
From the conference call it sounds like the “clean up” of the HeyDude brand is tracking nicely, with the brand picking up market share and grey market sales (EBAY, AMZN, etc.) expected to wrap up in the next 3-4 months. The company is ramping up investments in marketing and talent for both brands, especially with respect to international expansion.
Recall that I’m not expecting company-wide sales to take off here. This is something of a self-help story as Crocs sales are seen growing modestly while the company stems the bleeding from HeyDude this year and hopefully gets it back in growth mode for 2025. The net result should be low- to mid-single-digit revenue growth in 2024.
Given the uncertainty around the trajectory heading into today’s event and the “decent” outlook given on the conference call, today’s move can be characterized as something of a relief rally. Based on management commentary, there’s ample room for this story to go from mediocre to good, which is exactly what I was hoping for when we jumped on board in December.
We’re up about 18% since, and CROX remains a buy. BUY
