Markets outside the U.S. are forecast to generate Crocs’ highest FY23 revenue growth rates and help the group deliver 11 to 14 percent reported sales expansion this fiscal year to a range of $3.95 to $4.05 billion. Crocs brand sales are projected to increase by 7 to 9 percent with Heydude reported annual revenues pegged to rise in the mid-20-percent range due to constrained distribution and logistics capabilities.
The group revised its full-year revenue outlook as it reported a 98 percent increase in Q1 operating income to $234.9 million from $118.7 million. Net profit came in 106 percent higher year-over-year at $149.5 million versus $72.8 million as the gross margin improved by 470 basis points to 53.9 percent from 49.2 percent. The company sold 30.7 million pairs in Q1 at an average of $21.00, up 2.1 percent on a constant currency basis, helped by improved pricing in the EMEALA and fewer discounts in Asia.
Total revenues rose by nearly 34 percent to $884.2 million from $660.1 million for the period ended March 31. Crocs brand revenues improved 21.6 percent on a constant currency basis to $648.8 million, with wholesale up 22.4 percent to $410.6 million and direct-to-consumer comparable sales gaining 20.3 percent year-over-year to $238.2 million. International was the largest growth driver for the brand, representing 46 percent of revenues. Fueled by double-digit gains in the U.K., France, and Germany, despite an uncertain consumer backdrop, EMEALA sales increased by 25.1 percent to $157 million in the period. China and Australia had sales growth rates higher than 110 percent, and results in South Korea were strong as year-over-year brand revenues rose by 54.8 percent to $140 million in Asia. The company says current brand sales in China are doing better than initially planned, with plenty of upside potential, and India offers a strong growth trajectory.
Heydude, fueled by 141 percent growth in the DTC channel, generated $235 million in Q1 revenues that were 15 percent higher on a pro forma basis. Wholesale revenues rose by 94 percent to $167.9 million, with DTC channel sales improving by 141 percent on a constant-currency basis to $67.5 million. The company intends to expand the reach of the brand outside the U.S. this year by following Crocs’ lead. There are plans in place to test Heydude products in the U.K., Germany, the Netherlands and a few EMELA distributor markets this year.
Meanwhile, the group has two significant initiatives underway – the implementation of an Enterprise Resource Planning (ERP) system and the construction of a distribution center in Las Vegas.
