Crocs exceeded $2.3 billion in revenues last year and expects to reach a turnover of $6 billion in 2026, thanks to the takeover of Heydude and organic growth driven by its digital business.
The U.S. footwear company posted a strong fourth quarter with an increase of 42.6 percent in sales to $586.6 million. Income from operations grew by 147.5 percent to $160.0 million, while operating margin widened to 27.3 percent from 15.7 percent for the same period last year. Diluted earnings per share (EPS) were $2.57 compared to $2.69 in 2020 due to a lower tax benefit. On an adjusted basis, diluted EPS doubled to $2.15.
Crocs reported for the whole of 2021 record revenues of $2,313.4 million, up by 66.9 percent over 2020. Sales were fueled by the Americas, where sales totaled $1,607 million, up by 85.9 percent on a constant currency basis. Asia Pacific posted $350.2 million in revenues, up by 21.5 percent in local currencies, while sales in Europe, the Middle East and Africa (EMEA) surged by 41.7 percent to $356.2 million.
“From a channel perspective, digital remains a top priority as it enables us to meet the consumers where they are. During 2021, our digital business, which combines e-commerce and e-tail, grew 48 percent on top of 50 percent growth in 2020. Digital penetration increased on a two-year basis to 37 percent from 31 percent in 2019,” commented Andrew Rees, the company’s chief executive officer, during a conference call.
In 2021, revenues from the direct-to-consumer business increased by 64.4 percent to $1,139.3 million, and wholesale revenues grew by 69.4 percent to $1,174.1 million.
Full-year income from operations surged by 219 percent to $683.1 million, while the operating margin rose 14.10 percentage points to 29.5 percent. Diluted EPS increased by 149.8 percent to $11.39 per share and adjusted EPS more than doubled to $8.32.
“We are excited about our sustainable growth trajectory for both the Crocs and Heydude brands and are confident in our plan to grow to $6 billion in revenues by 2026,” Rees added. In December 2021, the company entered into a definitive agreement to acquire the casual footwear brand Heydude for $2.5 billion. The transaction is expected to close in February 2022.
For 2022, revenue growth for the Crocs brand, excluding Heydude, is expected to exceed 20 percent compared to 2021. Heydude targets $700 to $750 million in annual sales, including the period of time before the closing of the acquisition. Heydude’s contribution to Crocs’ 2022 sales is estimated at $620 to $670 million.
Crocs’ guidance for full-year adjusted diluted EPS is $9.70 to $10.25.
The company also expects an increase in capital expenditures to $170-200 million in 2022, primarily for supply chain investments to support growth, compared with $55.9 million in 2021.
For the first quarter of 2022, Crocs forecast sales of $605 to $630 million, implying a growth of 31 to 37 percent compared to the first quarter of 2021. Excluding Heydude, Crocs brand revenues are seen at $520 to $535 million, representing 13 to 16 percent organic growth.
Financial analysts were forecasting first-quarter sales of $637 million. The guidance prompted a more than 6 percent decline, on the day, in Crocs’ share price on concerns about a slowdown in the brand’s momentum.
