Crocs, Inc. second quarter revenues were 1,112 million dollars, an increase of 3.6 percent or 4.8 percent on a constant currency basis.
The company’s direct-to-consumer revenues grew 8.9 percent or 10 percent on a constant currency basis, while wholesale contracted 1.3 percent or remained flat on a constant currency basis.
"We reported record second quarter results on both the top and bottom line which exceeded our guidance on all enterprise metrics. Strength in the quarter was led by our Crocs brand with exceptional growth internationally. As it relates to Heydude, 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," said Andrew Rees, the company’s chief executive officer.
Crocs brand revenues improve, Heydude declines
Gross margin for the quarter was 61.4 percent and adjusted gross margin improved 330 basis points to 61.4 percent. Diluted earnings per share of 3.77 dollars increased 11.2 percent, while adjusted diluted earnings per share of 4.01 dollars, increased 11.7 percent.
Crocs brand revenues increased 9.7 percent or 11.2 percent on a constant currency basis to 914 million dollars. DTC revenues increased 12.5 percent or 13.8 percent constant currency to 479 million dollars and wholesale revenues increased 6.9 percent or 8.6 percent constant currency to 435 million dollars.
The brand’s revenues in North America increased 3 percent or 3.2 percent constant currency to 489 million dollars and international revenues increased 18.7 percent or 22 percent on a constant currency basis to 425 million dollars.
Heydude brand revenues decreased 17.5 percent to 198 million dollars with DTC revenues down 7.6 percent to 84 million dollars and wholesale revenues down 23.5 percent to 114 million dollars.
Crocs raises 2024 earnings guidance
For the third quarter of 2024, Crocs expects revenues to be down 1.5 percent to up 0.5 percent. Crocs brand to grow 3 percent to 5 percent, while Heydude brand to be down 16 percent to 14 percent. Adjusted operating margin is forecasted to be approximately 24.5 percent and adjusted diluted earnings per share of 2.95 dollars to 3.10 dollars.
Commenting on the outlook, Rees said: "Based on the strength of our second quarter, we are lifting our operating margin and earnings per share outlook for the fiscal year while maintaining our revenue guidance."
For the year ahead, the company expects revenue growth of 3 percent to 5 percent, revenues for the Crocs brand to grow approximately 7 percent to 9 percent and revenues for the Heydude brand to be down approximately 10 percent to 8 percent.
Adjusted operating margin is forecasted to be more than 25 percent and adjusted diluted earnings per share in the range of 12.45 dollars to 12.90 dollars.
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