In Q1 FY23, the company’s direct-to-consumer (DTC) revenues, which includes retail and e-commerce, grew 33.5 per cent, or 35.1 per cent on a constant currency basis, while wholesale revenues grew 34.2 per cent compared to Q1 FY22, or 36.9 per cent on a constant currency basis, the company said in a press release.
Crocs has reported Q1 FY23 revenues of $884.2 million, a 33.9 per cent YoY increase, driven by growth in DTC and wholesale revenues.
The company’s gross margin improved to 53.9 per cent, while income from operations rose by 98 per cent YoY to $234.9 million.
Crocs expects to see revenue growth of approximately 6-9 per cent YoY in Q2 FY23.
Gross margin also showed improvement in Q1 FY23, with a 53.9 per cent increase compared to 49.2 per cent in the same period last year. The adjusted gross margin was 54.2 per cent compared to 53.9 per cent in the prior year.
Crocs’ selling, general, and administrative expenses in Q1 FY23 increased to $241.4 million from $206.2 million in the same period last year. However, selling, general, and administrative expenses as a percent of revenues rose to 27.3 per cent from 31.2 per cent in the prior year.
Income from operations in Q1 FY23 rose by 98 per cent year-on-year (YoY) to $234.9 million, with an operating margin of 26.6 per cent, compared to 18 per cent for the same period last year. This was due to higher gross margin and significantly less Heydude acquisition expenses. Adjusted income from operations also rose by 40.8 per cent to $247 million, with an adjusted operating margin of 27.9 per cent.
Diluted earnings per share in Q1 FY23 was $2.39 compared to $1.19 in Q1 FY22. Adjusted diluted earnings per share increased 27.3 per cent to $2.61 compared to Q1 FY22.
The Crocs brand revenues increased 19 per cent YoY, or 21.6 per cent YoY on a constant currency basis, to $648.8 million, with wholesale revenues increasing by 19.3 per cent YoY, or 22.4 per cent YoY on a constant currency basis. DTC comparable sales increased 19.2 per cent YoY.
North America revenues reached $351.3 million, a 10 per cent YoY increase, or 10.3 per cent YoY on a constant currency basis. Asia Pacific revenues were $140 million, showing a 46.1 per cent YoY increase, or 54.8 per cent YoY on a constant currency basis. Europe, Middle East, Africa, and Latin America (EMEALA) revenues of $157.5 million increased 21.2 per cent YoY, or 25.1 per cent YoY on a constant currency basis.
Heydude Brand revenues for the first quarter were $235.4 million, with wholesale revenues at $167.9 million and DTC revenues at $67.5 million.
Looking ahead, the company expects to see revenue growth of approximately 6-9 per cent YoY in the second quarter of FY23, resulting in revenues of approximately $1,026 million to $1,049 million at current currency rates. Adjusted operating margin is expected to be approximately 26 per cent, with adjusted diluted earnings per share of $2.83 to $2.98, the release added.
For FY23, Crocs expects consolidated revenue growth to be between 11-14 per cent compared to FY22, resulting in revenues of approximately $3,945 million to $4,045 million at current currency rates. Revenues for the Crocs brand are expected to grow between 7-9 per cent on a reported basis, while revenues for the Heydude brand are expected to grow mid-20 per cent on a reported basis.
“Our exceptional first quarter results are a testament to the strength of our brands. The Crocs Brand grew 19 per cent as we see a strong consumer response to our new clog and sandal introductions. The Heydude brand is gaining momentum and experienced outstanding DTC growth,” said Andrew Rees, chief executive officer. “We are raising our 2023 revenue growth outlook to now be 11 per cent to 14 per cent, resulting in revenues of approximately $4 billion, reflecting our confidence in our ability to continue to gain market share, deliver best-in-class profitability, and generate strong cash flow.”
Fibre2Fashion News Desk (DP)
