Crocs expects flat revenue in 2020

Worldwide
Published:  16 September, 2020

Revenues for the U.S. headquartered footwear manufacturer totalled US$331.5 million in the second quarter of the year, a 7.6% decline compared with the same quarter in 2019.

Crocs said e-commerce revenue grew 67.7%, while wholesale revenue declined 19.5% and retail revenue declined 41.8% due to Covid-19 related store closures. Retail comparable store sales on a constant currency basis grew 10.5% upon re-opening. Gross margin was 54.3% in the period, up 150 basis points from the same quarter of 2019. Adjusted gross margin was 55.2%, which excludes US$3.2 million or 100 basis points of non-recurring expenditures for Covid-19-related inventory charges in Asia and costs related to our U.S. distribution centre. Adjusted gross margin rose 160 basis points against the second quarter of 2019, benefiting from product mix, higher prices on certain product, and lower levels of promotions and discounts. Income from operations increased 18.3% to US$56.6 million from US$47.8 million in the second quarter of 2019, and operating margin rose 380 basis points to 17.1%. Diluted earnings per share increased 50.9% to US$0.83, up from US$0.55 in the second quarter of 2019.

As of June 30, 2020, 98% of company-operated stores were open, according to Crocs, which said that while many bricks-and-mortar stores were closed, record quarterly sales were recorded in e-commerce as well as strong sell-through in e-tail and wholesale partner e-commerce sites, as consumers migrated to online shopping. These strong growth rates have recently started to temper as bricks-and-mortar has started to reopen.

During the second quarter, Crocs opened its new global headquarters in Broomfield, Colorado, less than 20 miles outside of downtown Denver. The company also entered into a lease for a new distribution centre adjacent to its existing facility in Dayton, Ohio. The new facility will be dedicated to e-commerce fulfilment and is expected to significantly increase the company’s distribution capacity in the Americas. Crocs said it also anticipates completing the relocation of its distribution centre in the Netherlands in 2021.