Crocs, Inc. (NASDAQ: CROX) has reported record fourth quarter and full-year 2023 financial results, showcasing significant revenue and earnings per share (EPS) growth. The company's revenues for the fourth quarter were nearly $960 million, representing a 1.6% increase from the same period last year, with direct-to-consumer revenues growing by 6.8%. The company's gross margin also improved to 55.3% compared to 52.5% in the prior year. Andrew Rees, Chief Executive Officer of Crocs, Inc., expressed his satisfaction with the company's performance, stating, "We delivered a record year for Crocs Inc. capped off by a strong fourth quarter that exceeded expectations across all metrics."
For the full year 2023, Crocs, Inc. achieved record revenues of nearly $4.0 billion, marking an 11.5% increase over 2022. The company's gross margin for the year improved to 55.8% compared to 52.3% in the previous year. Rees also highlighted the growth of the Crocs brand, with revenues increasing 13.3% to $3.0 billion and wholesale revenues rising by 8.4%.
Regarding the company's financial outlook, Crocs, Inc. expects first quarter 2024 revenues to be down 1.5% to up 0.5% compared to the first quarter of 2023. However, the company anticipates the Crocs brand to grow by 6% to 8% compared to the first quarter of 2023.
Looking ahead to the full year 2024, Crocs, Inc. maintains its expectation of revenue growth of 3% to 5% compared to 2023. This outlook includes adjusted operating margin of approximately 25% and adjusted diluted earnings per share of $12.05 to $12.50.
In light of the company's performance, Crocs, Inc.'s shares have moved 7.7% and are currently trading at a price of $116.71.
The full 8-K submission from Crocs, Inc. is available here.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $1,088 | $1,231 | $1,386 | $2,313 | $3,555 | $3,947 |
| Gross Margins | 51% | 50% | 54% | 61% | 52% | 55% |
| Net Margins | 5% | 10% | 23% | 31% | 15% | 17% |
| Net Income (M) | $50 | $119 | $313 | $726 | $540 | $677 |
| Net Interest Expense (M) | $1 | $9 | $7 | $22 | $136 | $175 |
| Depreciation & Amort. (M) | $29 | $24 | $28 | $32 | $39 | $53 |
| Diluted Shares (M) | 68 | 72 | 69 | 64 | 62 | 62 |
| Earnings Per Share | -$1.01 | $1.66 | $4.56 | $11.39 | $8.71 | $10.87 |
| EPS Growth | n/a | 264.36% | 174.7% | 149.78% | -23.53% | 24.8% |
| Avg. Price | $18.4 | $27.44 | $38.62 | $117.04 | $76.73 | $108.37 |
| P/E Ratio | -18.22 | 16.14 | 8.32 | 10.07 | 8.7 | 9.86 |
| Free Cash Flow (M) | $102 | $53 | $225 | $511 | $499 | $836 |
| Current Ratio | 2.06 | 1.65 | 1.69 | 1.72 | 1.6 | 1.51 |
Crocs, Inc. appears to be undervalued at its current price of $116.71 per share due to its impressive growth and value factors. The company's revenues are rapidly growing at a rate of 27.8%. Moreover, Crocs's operating margins compare favorably with the industry average, and its gross margins are wider than its industry peer group, indicating a potential competitive advantage. Additionally, the company's earnings per share have grown at an annualized rate of 50.8% over the last 6 years, and its PEG ratio suggests that the shares may be undervalued with respect to the company's earning growth potential.
From a value perspective, Crocs is trading above its fair value at its current price of $116.71, with a P/E ratio of 10.8 and a P/B ratio of 5.91. While the stock may be undervalued based on its growth potential, the current trading price suggests that it may not present a clear value opportunity for investors. It's important to consider these factors in the context of the overall market and industry dynamics before making any investment decisions.
It's important to note that this analysis is not personalized financial advice and individuals should conduct thorough research or consult with a financial advisor before making any investment decisions.
