Crocs (NASDAQ:CROX) stock is trading about 2% lower after the footwear company reported its second-quarter earnings.
Crocs’ revenue grew by 3.6% to $1.11 billion, beating the analyst estimate for $1.1 billion. International revenue for Crocs remains strong, growing by 18.7% to $425 million. However, HEYDUDE has continued to struggle, with revenue falling by 17.5% to $198 million. Crocs acquired HEYDUDE in December 2021 for $2.5 billion.
“Strength in the quarter was led by our Crocs Brand with exceptional growth internationally,” said CEO Andrew Reese. “As it relates to HEYDUDE, we are making improvements to support long-term brand health and are focused on driving brand heat by accelerating marketing in the second half of the year.”
In April, Crocs hired former Stanley president Terence Reilly as HEYDUDE’s new executive vice president and president. Reilly is credited with helping the drinkware company revive its presence.
Crocs is still working on reducing its debt from the HEYDUDE acquisition and repaid $200 million of it during the quarter.
CROX Stock Falls After Reporting Second Quarter Earnings
Meanwhile, Crocs’ adjusted EPS of $4.01 grew by 11.7% and beat the analyst estimate for $3.55. Gross margin was also positive, as it grew to 61.4% compared to 57.9% a year ago.
In addition, the foam clogs company has a history of strong buybacks. It repurchased 1.2 million shares worth $175 million, and its buyback program remains at $700 million. CROX shares outstanding fell by 0.09% in 2023, 2.26% in 2022 and 7.04% in 2021.
“Our terrific cash flow generation provides us the flexibility to reinvest in our business, pay down debt and repurchase shares,” said Reese.
However, Crocs’ EPS guidance for the third quarter was notably weak. It guided for between $2.95 and $3.10 compared to the analyst estimate for $3.33.
Despite that miss, Crocs raised its full-year adjusted EPS guidance to between $12.45 and $12.90, up from its prior guidance of between $12.25 and $12.73. It also raised its full-year adjusted operating margin to greater than 25% compared to the prior guidance of 25%. The company’s revenue growth guidance of between 3% and 5% was left unchanged.
On the date of publication, Eddie Pan held a LONG position in CROX. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
