As it recorded its strongest fourth quarter ever, Crocs decided to raise its revenue guidance for the last three months of 2019. The company now expects revenues to have risen by 21 percent from the year-ago period, reaching a level of $260 to $262 million, up from a previous forecast of $245 to $255 million and compared with $216 million a year-ago.
For the full year 2019, the company anticipates a growth in revenues of around 13 percent from the previous year. The adjusted gross margin is expected to have been around 51 percent, excluding non-recurring charges associated with the company’s new U.S. distribution center. The adjusted operating margin is forecast at 11 percent.
Speaking at the ICR Conference 2020, the management said the company is riding strong momentum, which allowed it to deliver strong direct-to-consumer (DTC) growth and wholesale sell-through. It added that 2019 was a vintage year for the company, with revenues at an all-time high. Crocs shoes claimed top spots on Google’s list of most-searched shoes in 2019.
The company said it recorded strong increases in DTC comparable sales in all the regions where it operates, with gains of 21.0 percent in the Americas, 5.6 percent in Asia, and 13.3 percent in EMEA. In particular, the management said that its business in Europe is benefiting from a steadily growing brand “hotness.” Crocs continued to focus on digital commerce, with online sales in the region jumping by 33.2 percent in constant currencies in the third quarter.
The management believes that Asia represents the greatest growth opportunity in the long term, as Crocs benefits from increased brand recognition in China through a partnership with a local celebrity, Yang Mi. It recorded strong e-commerce growth there last year. EMEA also represents a major opportunity, and the group’s focus in 2020 will be on maximizing digital commerce through own e-tail and marketplaces, while driving wholesale growth through distributors.
The management highlighted the increasing relevance of its clogs, with sales jumping by 21 percent in 2019 to represent 53 percent of footwear sales, driven by impactful collaborations across the globe. The strongest growth was recorded in the Americas, but there was also continued momentum in Asia and EMEA. Sales of sandals progressed by 11 percent to represent 25 percent of all footwear sales.
For the next season, the company is particularly bullish about its new Brooklyn wedge sandal, which incorporates Crocs’ LiteRide foam footbed technology and intuitive upper straps. It comes with various heel hights. Sales of Crocs’ LiteRide sandals doubled in 2019. The brand is working on an enhanced version of its LiteRide range that is expected to come out in 2021.
The big growth in the fourth quarter came after a positive third quarter in which the company recorded a strong performance in America and globally from the wholesale channel, e-commerce and higher comparable store sales.
Moving forward to 2020, the company anticipates full-year revenue growth of 12 to 14 percent.
