In the first nine months of 2023, Crocs Inc. reported a significant increase in its total consolidated revenues. According to the company's financial data, total consolidated revenues for the period reached $3.002 billion, a notable surge from the $2.61 billion reported for the same period in 2022. The company attributes this growth to the performance of its Crocs Brand and HEYDUDE Brand.
The data also reflects a positive trend in the company's North American market, with revenues from both wholesale and direct-to-consumer channels showing consistent growth. In the North American market, total revenues for the Crocs Brand amounted to $1.306 billion for the first nine months of 2023, compared to $1.188 billion for the same period in 2022. Similarly, the HEYDUDE Brand also demonstrated strong performance in North America, with revenues totaling $721.753 million, up from $616.675 million in the same period last year.
In response to the company's performance, Andrew Rees, President and Chief Executive Officer of Crocs, commented, "We are pleased with the continued momentum in our business, driven by strong demand for our iconic product and a consumer shift towards casualization. We remain focused on executing our strategies to drive sustainable, long-term growth and deliver value for our shareholders."
The positive financial results come at a time when the company's shares have experienced a slight decline, falling by 2.4% and currently trading at $118.72. Despite this, the company remains optimistic about its outlook, as indicated by Anne Mehlman, Executive Vice President and Chief Financial Officer, who stated, "We are confident in our ability to continue delivering strong financial performance and remain committed to investing in our strategic growth initiatives."
The company's full 8-K submission 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 | $119.79 |
| P/E Ratio | -18.22 | 16.14 | 8.32 | 10.07 | 8.7 | 10.9 |
| Free Cash Flow (M) | $102 | $53 | $225 | $511 | $499 | $836 |
| CAPEX (M) | $12 | $37 | $42 | $56 | $104 | $101 |
| Current Ratio | 2.06 | 1.65 | 1.69 | 1.72 | 1.6 | 1.51 |
Crocs Inc. is likely undervalued at its current price of $118.72 due to its robust growth factors and potential for future earnings growth.
- Crocs has exhibited impressive revenue growth, with a rate of 27.8%, indicating strong consumer demand for its products.
- The company's capital expenditures are increasing at a rate of 33.0%, signaling investments in future growth and innovation.
- With operating margins averaging 18.7% over the last 6 years and a growth rate of 27.5%, Crocs outperforms the industry average, showcasing efficient management and cost control.
- The company's gross margins at 55% surpass the industry average, suggesting a competitive advantage in production and pricing.
- Crocs has demonstrated remarkable earnings per share growth at an annualized rate of 50.8% over the last 6 years, indicating efficient utilization of capital and strong profitability.
- The PEG ratio of 0.39 suggests that the stock may be undervalued relative to its earnings growth potential, providing an attractive entry point for investors.
Overall, Crocs exhibits strong growth potential, efficient cost management, and promising earnings growth, making it an attractive investment opportunity. However, investors should conduct thorough due diligence to assess the stock's value metrics and risks associated with the footwear industry, including competitive pressures and changing consumer preferences.
