Q3 was another successful quarter for Crocs.
On Thursday, the clog maker reported revenue of $625.9 million, marking an increase of 72.2% on a constant currency basis compared to 2020. Net income for the quarter was $153.49 million, with an adjusted diluted earnings per share of $2.47 compared to $0.94 for the same period last year.
Digital sales grew 68.9% and now make up 36.8% of total revenue, compared to 37.7% in 2020 and 32.2% in 2019.
These results beat analyst expectations surveyed by Yahoo Finance. Shares of Crocs soared early Thursday after the company reported results.
Like other major footwear brands, Crocs has focused on sharpening its direct-to-consumer business and slimming down on certain wholesale partnerships. In April, Crocs said it was ending business relationships with some of its long-time wholesalers to prioritize key partners that can elevate the brand’s position in the marketplace. In Q3, Crocs’ direct to consumer revenue increased 60.4% to $316.3 million versus $197.2 million in 2020. At the same time, wholesale revenue also increased 88.2% to $309.6 million versus $164.5 million in 2020.
CFRA Research equity analyst Zachary Warring recommended Crocs as a “strong buy” option and a “top pick in footwear” in a note on Thursday morning.
“We see best-in-class brand momentum driven by product innovation, personalization, powerful social and digital marketing campaigns, and a digital first route to market,” Warring wrote. “We see product adoption across all age groups, but especially in younger generations as social and digital marketing campaigns drive demand.”
Crocs’ latest stellar quarter comes amid a global supply chain crisis that has caused headaches for footwear brands and retailers. Materials shortages, factory closures abroad in China, Malaysia, and Vietnam, labor shortages, and congestion at crucial U.S. ports have put retailers and brands in danger of missing inventory targets for the holiday season.
In a note to investors, Baird analyst Jonathan R. Komp described Crocs’ results as “highly reassuring,” especially amid the impact from factory closures and supply chain slowdowns.
Crocs noted the disruptions in its release. To mitigate the impact, the company said it has leveraged air freight and has worked on a solution to “strategically allocate units.”
Crocs still raised its full year outlook and expects revenue growth for 2021 to be between 62% and 65%. For 2022, Crocs expects revenue growth to be more than 20% compared to 2021.
“Globally, our teams are managing through the supply chain disruptions to mitigate the impact on our business,” said Crocs CEO Andrew Rees. “Despite the temporary disruptions, we expect 2022 revenues to grow over 20% from 2021 fueled by the strength of our brand and consumer demand globally.”