Crocs' stock drops sharply after its Q4 earnings forecast falls short of consensus estimates

By Steve Gelsi

Crocs Inc.'s stock was down about 9% Thursday after the footwear maker issued fourth-quarter earnings projections that fell short of current analyst estimates, despite its third-quarter results beating expectations.

The company signaled more challenges around its HeyDude brand with its latest 2023 revenue projection of 4% to 6% growth, down from its estimate for 14% to 18% growth over the summer.

Crocs (CROX) said its third-quarter net income rose to $177.03 million, or $2.87 a share, from $169.35 million, or $2.72 a share in the year-ago quarter.

Third-quarter adjusted profit at the Broomfield, Colo.-based company totaled $3.25 a share, well ahead of the FactSet consensus estimate of $3.10 a share.

Revenue rose 6.2% to $1.05 billion, ahead of the estimate of $1.03 billion.

Looking ahead, Crocs said it expects fourth-quarter profit of $2.05 to $2.35 a share, short of the FactSet consensus estimate of $2.78 a share.

The company said adjusted its full-year outlook reflects its shift in strategy around its HeyDude, a footwear brand it acquired in 2022.

"We took decisive action around HeyDude to accelerate our marketplace management strategy to ensure long-term brand health," Crocs Chief Executive Andrew Rees said.

Reflecting on the third quarter, Rees said the company saw "healthy full-price selling and industry-leading operating margins."

Also read: Crocs' stock tumbles 15% after earnings show weakness at high-flying HeyDude brand

-Steve Gelsi

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11-02-23 1243ET

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