Crocs, Inc. (NASDAQ: $CROX), a leader in the manufacture, marketing, and distribution of casual footwear and accessories for men, women, and children, recently released its FY guidance for fiscal year 2023.
Details of the Updated Guidance by Crocs
According to the announcement, the company projects an FY23 revenue of $3.95 billion, which is an 11% Y/Y jump from 2022. CEO Andrew Rees noted that 20203 was a strong year for the company. He added that they had experienced great sales numbers during the holiday season.
Rees said that their Q4 revenue would exceed their previous guidance, and they were raising their operating margin for 2024. He said that the strong cash flow had allowed them to pay down $277 million in net debt in Q4.
According to the CEO, the company expects revenue to grow by 1% in Q423 compared to 2022. It was an improvement from the previous projection of a 4% drop. He added that the Crocs Brand grew nearly 10% while the HEYDUDE brand fell 19%, with both performing better than anticipated.
The company anticipates FY23 revenue to rise over 11% compared to FY22. It represents a slight improvement from the previous guidance of 10% Y/Y growth. The company predicts that the Crocs Brand will rise over 13%, just over $3 billion in revenue. At the same time, the HEYDUDE brand is expected to bring in $949 million in revenue. For FY23, the company projects that its non-GAAP operating margin will exceed 27%.
For 2024, the company projects revenue will grow 3%-5% compared to 20203. They expect the Crocs Brand to grow 4%-6%, while the HEYDUDE brand is projected to remain flat. The CEO added that their projected gross margin will be better than 21023. They plan to invest the money into growing the brands and strategic S&G. As a result, Crocs predicts that their non-GAAP operating margins will be around 25% at the end of 2024.
Crocs Stock Performance
Soon after the updated guidance was released, Crocs (CROX) stock rose 20.1% during the mid-afternoon trading session. The stock closed on Monday, January 8, 2024, 20.33% higher at $104.03 per share.
Despite the Monday gains, CROX stock has lost 8.29% of its value over the past 12 months. It is also trading at a significant discount on the all-time high price of around $180, which it achieved in late 2021. It has also lost 11.37% of its value in the past six months.
CROX Stock Forecast
Analysts give CROX stock a moderate buy rating. They project that it could hit a high of $185 and a low of $101. The stock’s average price target is $131.25, an upside of 26.17%.
Should You Buy CROX Stock?
Crocs is doing well as a company. However, the company’s success rides on just two main brands. If customer trends change or management’s marketing strategy does not work, the company could face serious challenges.
Investors need to be aware that fashion trends can change, which is crucial to the company’s success. Buying CROX stock is a bet that its leading Crocs Brand will remain interesting to buyers. However, the current buy rating by analysts is an accurate projection of the company’s medium-term future.
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