Crocs Inc. capped off the trading day 5% higher on the heels of a stellar third quarter — driven by a combination of trend-right products, buzzy collaborations and targeted marketing efforts. And, as the casual clog maker solidifies its brand strength in otherwise challenging times, it’s upped its distribution game, too: Heading into the fourth quarter, the company has added two new retail partners, Foot Locker and Finish Line, to expand its presence in the specialty athletic sector.
The brand has already tested the waters with Foot Locker, making available at its stores the limited-edition collaboration with Bad Bunny released in late September. Over the past few months, Crocs has also released a series of highly anticipated collections with other big names in entertainment like Justin Bieber and Luke Combs. It also continues to benefit from its digital-first marketing strategy, which the brand said is getting another $7 million investment in the back half of the fiscal year.
For the period ended Sept. 30, Crocs shared that it sold 16.9 million pairs of shoes — an increase of 6.2% from the prior year. According to its proprietary survey this year, the business saw double-digit advancements in each of its key metrics: brand desirability, brand relevance and brand consideration.
Watch on FN
“Our brand strength and lean inventory led to fewer promotions, which coupled with price increases and product mix boosted our gross margins,” explained CEO Andrew Rees. “We’re even more confident now than a year ago about the Crocs brand strength and our long-term growth potential.”
With fewer markdowns and discounts, Crocs’ average selling price during the quarter rose 8.8% to $21.36. Still, consumers appeared to flock to the casual shoemaker: Sales of clogs improved 31% year over year, representing 72% of total footwear revenues, compared with the prior year’s 62% share. Jibbitz also continued to exhibit strength; sales for the category doubled for the quarter versus last year.
The Niwot, Colo.-based firm said that it canceled sandal receipts early in the pandemic, leading revenues for the style to fall by 4%. (It made up 19% of overall shoe sales in Q3, versus 22% in 2019.) Looking to next year’s product pipeline, it expects to deliver more sandals, including its Classic Slide as well as Brooklyn and Tulum silhouettes.
During the third quarter, Crocs logged adjusted earnings of 94 cents per share, while last year’s EPS amounted to 57 cents. Wall Street had been anticipating earnings of 69 cents. Revenues increased 15.7% to $361.7 million, versus analysts’ forecasts of $339.6 million. E-commerce gained 36.3% to $80 million, while retail revenues ascended 8.9% to $117.2 million and the wholesale business climbed 12.4% to $164.5 million.
“We’ll be growing the brand through our digital business and through our wholesale business,” Rees added. “Over the long term, we believe our digital presence on both our sites and those of our partners will allow us to serve our consumers in their preferred channel and will continue to be a competitive advantage relative to other footwear brands.”