Crocs, Inc. has reported record second quarter revenues, with a 4% increase over the previous year to $1,112 million. The company's diluted earnings per share (EPS) also saw a significant uptick, rising 11% to $3.77, while adjusted diluted EPS increased by 12% to $4.01.
The operating results for the second quarter of 2024, compared to the same period last year, reveal several notable changes. Consolidated revenues increased by 3.6%, with direct-to-consumer (DTC) revenues growing by 8.9% and wholesale revenues contracting by 1.3%. Gross margin improved to 61.4% compared to 57.9%, and adjusted gross margin increased by 330 basis points to 61.4%. Selling, general, and administrative expenses (SG&A) also saw an increase, rising to $356 million, representing 32.0% of revenues. Despite these changes, income from operations increased by 2.3% to $326 million, resulting in an operating margin of 29.3%. Additionally, the company repaid $200 million of debt, repurchased approximately 1.2 million shares for $175 million, and had $700 million of share repurchase authorization remaining at the end of the quarter.
On a brand level, Crocs brand revenues increased by 9.7% to $914 million, with DTC revenues growing by 12.5% and wholesale revenues increasing by 6.9%. In contrast, Heydude brand revenues decreased by 17.5% to $198 million, with DTC revenues declining by 7.6% and wholesale revenues dropping by 23.5%.
Looking at the balance sheet and cash flow, several changes are evident. Cash and cash equivalents increased to $168 million from $166 million, while inventories decreased to $377 million from $436 million. Total borrowings also decreased to $1,530 million from $2,027 million, and capital expenditures reduced to $33 million from $52 million.
The company has also provided financial outlooks for the third quarter and full year 2024. For the third quarter, revenues are expected to decrease by 1.5% to increase by 0.5% compared to the third quarter of 2023, with adjusted operating margin projected to be approximately 24.5% and adjusted diluted earnings per share estimated at $2.95 to $3.10. For the full year 2024, revenue growth is anticipated to be 3% to 5% compared to 2023, with adjusted operating margin expected to be more than 25% and adjusted diluted earnings per share projected at $12.45 to $12.90.
Following these announcements, the company's shares moved 1.3%, and are now trading at a price of $134.37. For the full picture, make sure to review Crocs's 8-K report.
