Raising its guidance for the full financial year after a very strong first quarter, Crocs predicted that its revenues will grow by between 40 and 50 percent in 2021 from last year’s level of $1,386 million, up from its previous forecast of 20-25 percent growth.
Posting the third consecutive quarterly sales record, the company reported a 63.6 percent jump to $460 million for the first three months of this year, with a rise of 60.5 percent in constant currencies, and predicted a further increase of between 60 and 70 percent for the second quarter. “We continue to see consumer demand for our product accelerate globally,” said Andrew Rees, CEO of Crocs.
Net earnings rocketed by 787 percent to $98.4 million in the quarter, aided by an increase in average selling prices of almost 8 percent to $17.64 per pair and lower promotional activity.
In terms of sales channels, wholesale revenues increased by 50.1 percent to $290.0 million in the quarter, while direct-to-consumer sales jumped by 93.3 percent to $170.1 million. Crocs’ own digital sales, including revenues from third-party e-tailers, grew by 75.3 percent to represent 32.3 percent of the turnover versus 30.1 percent last year.
On a geographical basis, sales in the EMEA region went up by 41.0 percent on a constant-currency basis to $101.1 million, accelerating from the 11.4 percentage increase seen in the fourth quarter of 2020. Double-digit growth was recorded in both wholesale and digital sales, with Crocs’ digital penetration in the region rising to around 42 percent of the turnover from 38 percent a year earlier.
In the Americas, sales rose by 87.5 percent in constant currencies to $276.4 million, after climbing by 101.5 percent in the previous quarter. Direct-to-consumer sales soared by 131 percent.
Revenues in the Asia Pacific region increased by 20.1 percent in local currencies, reaching a level of $82.6 million, after falling by 22.1 percent in the previous quarter. The growth was led by India, where sales went up by triple digits. Total online penetration increased in the region to 21 percent from 24 percent.
Crocs’ revenues from clogs jumped by 87 percent in the first quarter to about 76 percent of total footwear sales versus 65 percent a year earlier. Sales of clogs personalized with its Jibbitz charms increased by 50 percent. Sales of sandals rose by 17.1 percent to represent 17.3 percent of the total.
The gross margin widened by 7.3 percentage points to 55.0 percent in the quarter, and the adjusted gross margin increased by 7.2 percentage points to 55.2 percent. The operating margin grew by 19.7 percentage points to 27.1 percent and adjusted margin by 17.9 percentage points to 27.3 percent.
Crocs anticipates adjusted operating margins of 21-23 percent in the second quarter and 22-24 percent for the full year. It has budgeted capital expenditures of $100-130 million for this year, primarily on supply chain initiatives intended to support growth.