Crocs Inc. CEO Andrew Rees cited a strong 2023 culminating in a “successful holiday season” with notable market share gains for both the Crocs and HeyDude brands.
This in contrast to Q3 when HeyDude had a 8.3% drop in revenue to $246.9m.
Rees said: "Fourth-quarter revenue is now expected to exceed our former guidance, and we are raising our operating margin target for the year."
He added that the company's strong free-cash-flow generation, enabled it to pay down its $277m in net debt during the quarter and take the company's full-year debt down to $665m.
Updated Q4 2023 and FY23 outlook
Q4:
- Expected revenue growth of over 1% compared to 2022, surpassing the earlier guidance of a decline between 4% to 1%.
- Crocs brand is anticipated to grow by almost 10%, while HeyDude is expected to decline by 19%, still ahead of guidance.
- Debt reduction of $277m and $25m in stock repurchases during the fourth quarter.
Full Year 2023:
- Revenues are projected to grow by over 11% compared to 2022, slightly above the guidance range of 10% to 11%.
- Crocs brand is expected to grow by over 13%, crossing the $3bn mark, with HeyDude revenues reaching $949m.
- Full-year non-GAAP operating margin expected to exceed 27%.
Preliminary outlook for 2024
Looking ahead to 2024, Crocs Inc. expects:
- Revenue growth of 3% to 5% compared to 2023.
- Crocs brand growth of 4% to 6%, with HeyDude remaining flat to slightly up.
- Anticipated gross margin improvement over 2023.
- Plans to reinvest in brand accretive and strategic SG&A investments, resulting in 2024 non-GAAP operating margins of approximately 25%.
Rees added: "We are coming into 2024 from a position of strength and are making the decision to reinvest our best-in-class margins into focused strategic investments as we continue to set ourselves up for long-term, durable growth."
