Love them or hate them, Crocs are here to stay.
Even amid a pandemic and global supply chain slowdowns, the clog maker is standing out among its footwear competitors. On Thursday, Crocs reported another standout quarter, with a revenue of $625.9 million and adjusted diluted earnings per share of $2.47 compared to $0.94 for the same period last year.
In September, Crocs announced a goal to achieve $5 billion in sales by 2026, which would represent a compound annual growth rate above 17% with 2021 as a base year. Given recent results, the brand is showing signs of being able to meet this goal.
As a comfort-focused brand, Crocs’ pandemic-era success is no big surprise. But according to analysts, this momentum won’t die down any time soon.
From Crocs’ focus on DTC channels to its sustainability goals, here are some of the reasons for the brand’s whirlwind year of growth.
What are the best Crocs collaborations?
In a previous interview, Crocs CEO Andrew Rees said the brand is focused on attracting the type of consumer he calls the “explorer,” who is characterized by being young, expressive, self-confident, active on social media, and generally, though not exclusively, female.
To find that sweet spot among Gen Z and Millennials, Crocs has leaned into TikTok and Instagram. Beyond younger consumers, Crocs appeals to all generations through high-impact collaborations with various celebrities and brands. Some Crocs collaborations from this year include:
Is Crocs a sustainable brand?
In July, Crocs laid out a plan to become a net zero company by 2030. To do this, Crocs plans to use more sustainable ingredients for its products and packaging materials, with a goal to be a 100% vegan brand by the end of 2021. While 45% of the production scrap from Croslite, the main material used to make Crocs, is currently recycled, the brand is aiming to make this material even more sustainable moving forward.
Crocs also said it plans to minimize the use of packaging materials and is looking at alternative ways to present product to consumers. To keep used pairs out of landfills, Crocs is investing in methods for reusing and donating used products. Crocs also plans to transition to “renewably sourced energy” in offices and distribution centers.
Where can I buy Crocs?
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.
Crocs’ DTC push is yielding returns in its physical stores as well, which are seeing more foot traffic compared to 2019, according to data from foot traffic analyzer Placer.ai. Visits to stores were up 11.8% in August and 17.5% in September, and up roughly 41% in January compared to January 2019.
Are there other Crocs-like brands?
As Crocs surge in popularity, the brand is cracking down on companies that create lookalike products.
In July, Crocs filed lawsuits against 21 companies for allegedly infringing on its trademarks. The defendants include Walmart Inc., Loeffler Randall Inc. and Hobby Lobby Stores Inc. as well as some lesser-known companies that sell online — or wholesale to retailers such as Walmart.
Crocs has had a long struggle to protect its intellectual property. In September 2019, the company won a victory when the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board held that the design patent for the Classic Crocs clog was valid.