Crocs posts strong fourth quarter and full year results

Worldwide
Published:  02 March, 2020

The footwear brand, well-known for its plastic clogs but which also manufactures some leather footwear, posted revenues of US$263 million for the fourth quarter of 2019, up 21.8% year-on-year.

Crocs said currencies negatively impacted the company’s revenues in the fourth quarter by approximately US$2 million, while store closures reduced the same also by US$2 million. Wholesale revenues grew 22.4% in the quarter, e-commerce revenues 34.3%, and retail comparable store sales on a constant currency basis 16%. Gross margin was 48% compared with 46.2% in the same quarter of 2018, while diluted net income per common share was US$0.29 in the period, compared with a diluted net loss per common share of US$1.72 in the same quarter of the previous year.

For full 2019, Crocs’ revenues were US$1,230.6 million, up 13.1% over 2018, or 15.6% on a constant currency basis. Store closures are said to have reduced revenues by US$17.2 million, but wholesale revenues were up 13.5% in the year, e-commerce 24.2%, and retail comparable store sales 12.4%. Gross margin was 50.1% compared with 51.5% in 2018, while gross profit increased US$56.9 million. Income from operations was US$128.6 million (+104.4%), up from US$62.9 million in 2018, and operating margin was 10.5%, compared with 5.8% in 2018. Diluted net income per common share was US$1.66 in 2019 compared with diluted net loss per common share of US$1.01 in the prior year.

For the first quarter of 2020, Crocs expects revenues to be between US$305 million and US$325 million compared with US$295.9 million in the first quarter of 2019. “We anticipate revenues for the first quarter of 2020 will be negatively impacted by approximately US$20 to US$30 million due to disruptions to our Asia business from COVID-19 and by approximately US$3 million due to currency”, said the company, adding that many of its partner stores in China are closed temporarily. “We are also seeing the broader impact as we are experiencing traffic declines throughout many of our key countries in Asia”.

“Although we begin the new year with great momentum and exciting plans in place to build on our recent growth, our immediate focus is with everyone affected by the coronavirus and ensuring that our employees in China, along with our partners, safely navigate the risks associated with this global health epidemic. Despite this difficult situation, we continue to be very optimistic about our long-term growth prospects in China and our Asia region”, said Andrew Rees, President and CEO, Crocs.