Get Ready for Another Stellar Crocs Quarter, Analysts Say

Get ready for another stellar quarter from Crocs.

When the company releases earnings early Thursday, it’s largely expected that the company will report another round of significant top-and bottom-line increases.

Analysts’ consensus is for Q2 earnings per share of $1.52, which would compare with EPS of $1.01 a year ago, on an adjusted basis.

The company has forecast revenue growth to be between 60% and 70% in the second quarter from prior year revenues of $331.5 million. Consensus estimates place revenues at $559.1 million.

Of note, the expectation for improving margins are on the minds of analysts. “We expect Crocs to improve their margins based on price increases, a right-sized inventory, and a low promotional cadence,” analysts from Jane Hali & Associates said in a note. The analysts noted that in the first quarter Crocs average selling price increased about 8% to $17.64.

Crocs has recently tightened up its wholesale relationships as demand for the brand has soared. In April, the company terminated select North American wholesale relationships to help maintain brand positioning.

Indeed, it’s the company’s e-commerce and direct to consumer sales that have stood out over the last year. According to StockX, Crocs had 430% trade growth for the first half of 2021 compared to last year and came in at No. 3 on the platform’s Current Culture Index.

“We see Crocs creating newness around its core clog. We note more fashion elements added, such as platform soles and new colorways,” the Jane Hali analysts wrote. “We expect their push in the sandal category to resonate with consumers during the summer.”

Collaborations are also helping fuel Crocs performance, noted the analysts, including those with Disney and Pixar, Diplo, Vera Bradley, and the band Little Big, among several others.

Celebrity endorsements have helped boost popularity, too. Crocs’ website reportedly crashed in May when Nicki Minaj modeled a pair of jeweled-up, hot pink Crocs on Instagram. The post has received over 5 million likes.

In late April, Crocs posted first quarter revenues that spiked 63.6% to $460.1 million, led by an over 93% increase in direct-to-consumer sales. Crocs sandal sales rose 17.1%. The footwear company’s raised its full-year guidance at that time to an increase of between 40% and 50% from 2020 revenues of $1.39 billion.

Shares in Crocs were trading up 1.3% in Wednesday trading to $117.74.

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