Shares for Crocs Inc. are booming in premarket trading — up more than 9 percent to $23.40 as of 8:30 a.m. ET as investors cheer a third-quarter performance that was better than expected across the board.
The Niwot, Colo.-based manufacturer of lightweight clogs said today that its sales during the period gained more than 7 percent to $261.1 million, handily topping forecasts for revenues of $246 million.
Profits also entered the black to reach $6.5 million, or 7 cents per diluted share — compared with a net loss of $2.3 million, or 3 cents per diluted share in last year’s same period. It was also much better than the loss of 2 cents per share analysts had predicted.
The brand, which encountered a stretch of uneven sales as the popularity of its distinctive molded clog waned, has recently moved aggressively to turn around its business. Among its tactics, the firm ditched about 170 underperforming stores, closed company-owned manufacturing facilities and tapped A-list stars such as Drew Barrymore to bolster its reach. At the same time, Crocs has enjoyed a resurgence through the rise of “ugly“ fashion — a trend characterized by Gen Z-ers’ newfound adoration for traditionally uncool item such as Teva’s flatform, Balenciaga’s Triple S dad shoe and Crocs’ clogs.
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“By executing against our strategic priorities, we drove strong quarterly performance with revenues up 7.3 percent, gross margin increasing 250 basis points to 53.3 percent and income from operations increasing 418 percent to $13.9 million,” said president and CEO Andrew Rees. “We achieved these strong results by continuing to grow our brand strength and demand for our clogs and sandals. We anticipate a strong finish to the year and have increased our 2018 guidance accordingly, and we are excited about our growth prospects for 2019.”
Based on the strength of today’s results, the firm expects revenue growth of 4 to 5 percent over last year’s $1.02 billion, up from prior guidance of a low-single-digit increase. Income from operations are forecast to be slightly under $60 million, compared with $17.3 million in 2017 and Crocs’ prior guidance of $50 million.
Looking ahead to fiscal year 2019, the company expects a mid-single-digit increase over the current year’s revenues, with e-commerce and wholesale growth more than offsetting lower retail revenues associated with a reduced store count. A smaller store count is anticipated to reduce revenues by $25 million.