On November 2, 2023, Crocs Inc (CROX, Financial) announced its third quarter 2023 financial results, reporting consolidated revenues of $1.045 billion, a 6.2% increase compared to the same period in 2022. The Crocs Brand revenues stood at $798.8 million, marking an 11.6% increase. The company's diluted earnings per share (EPS) rose by 5.5% to $2.87.
Financial Highlights
The company's operating margin was 26.2% and the adjusted operating margin was 28.3%. During the quarter, Crocs repaid $90 million of debt, reducing gross leverage to 1.7x. The company also resumed its share repurchase program, repurchasing approximately 1.4 million shares for $150 million.
Andrew Rees, Chief Executive Officer, commented on the results,
We delivered a strong third quarter, exceeding the high-end of our guidance, led by double-digit revenue growth in our Crocs Brand supported by healthy full-price selling and industry-leading operating margins."
Brand Performance
Crocs Brand's growth was fueled by Asia revenue growth of 26.5% and North America direct-to-consumer (DTC) comparable sales growth of 10.2%. However, the HEYDUDE Brand saw a decrease in revenues by 8.3% to $246.9 million, despite DTC revenues growing by 14.6%.
Balance Sheet and Cash Flow
As of September 30, 2023, cash and cash equivalents were $127.3 million, compared to $191.6 million as of December 31, 2022. Inventories decreased to $390.2 million from $471.6 million over the same period. During the nine months ended September 30, 2023, capital expenditures were $86.4 million, reflecting continued investments in distribution centers and corporate facilities expansion.
Outlook
For Q4 2023, Crocs expects revenues to decline approximately 1% to 4% compared to Q4 2022, resulting in revenues of approximately $903 million to $938 million. For the full year 2023, the company expects consolidated revenue growth to be approximately 10% to 11% compared to 2022.
Explore the complete 8-K earnings release (here) from Crocs Inc for further details.
