Crocs inc. CROX increased its 2021 revenue and adjusted its operating margin forecast to reflect the strength of the Crocs brand despite current supply chain challenges. At the same time, he reiterated his initial vision for 2022. Driven by the expected strength of the Crocs brand, the company reiterated its goal of generating $ 5 billion in revenue by 2026 before including revenue from HEYDUDE .
The company now estimates year-over-year revenue growth of 67% for 2021. Previously, the company forecast revenue growth of 62-65%. For the fourth quarter of 2021, he anticipates sales growth of 42%.
The company now expects an adjusted operating margin of 30% for 2021, which reflects an improvement from the previous forecast of 28% and suggests a significant expansion from the 18.9% recorded in 2020. For in the fourth quarter, the adjusted operating margin is estimated at 28%. The company notes that it made $ 1 billion in share buybacks in 2021.
For 2022, the company continues to anticipate revenue growth of over 20% for the Crocs brand, excluding HEYDUDE. Additionally, it expects HEYDUDE to earn $ 700 million to $ 750 million in 2022. The company expects 2022 gross margin to include an additional $ 75 million in air freight over the previous year.
The company’s forecast for 2022 excludes the HEYDUDE brand revenue to be acquired. Crocs expects to complete the HEYDUDE transaction in the first quarter of 2022, following the satisfaction of customary closing conditions and regulatory approvals. The company expects HEYDUDE to immediately generate revenue, operating margins and profits for Crocs in 2022.
Management anticipates an adjusted operating margin of 25% for the Crocs brand, including the impacts of air freight. Previously, the company expected an adjusted operating margin of 28%, excluding the impact of air freight. Crocs anticipates an adjusted operating margin of 26% for HEYDUDE in 2022.
Although the company provided an optimistic view for 2021, it failed to impress investors, pushing the stock down 2.8% on January 10. The stock has likely been punished as investors remain more concerned and focused on supply chain headwinds hurting the sentiments of retailers. .
Shares of Crocs have risen 57.8% in the past year, driven by the growing popularity of casual shoes as consumers shifted from formal wear to more comfortable shoes. Zacks Company Rank # 1 (Strong Buy) gain significantly exceeded the industry‘s 0.7% decline over the same period.
Strong consumer demand and brand strength have contributed to the solid growth of Crocs. The company’s focus on product innovation and marketing, digital capabilities and harnessing growth opportunities in Asia also bodes well.
Image source: Zacks Investment Research
Timely actions by Crocs helped mitigate the impacts of plant closures in Vietnam, its main manufacturing hub, and bottlenecks in the global supply chain in the third quarter. The company took immediate steps to move production, improve plant throughput, take advantage of air freight, and strategically allocate units.
Crocs remains optimistic about its ability to get through tough times. In particular, it shifts production capacity to countries, namely China, Indonesia and Bosnia. Management advised that the company may increase factory production due to limited inputs and simple product setup. Crocs also plans to reduce its reliance on west coast ports by adding east coast transshipment capacity to reach major customers in the United States.
Actions to watch
We have highlighted other top-ranked stocks in the same industry, namely Delta Clothing DLA, Oxford Industries OXM and Ralph lauren RL.
Delta Apparel, a Zacks Rank # 1 stock today, has a surprise four-quarter profit of 95.5%, on average. DLA shares have gained 40.1% in one year. You can see The full list of today’s Zacks # 1 Rank stocks here.
Zacks’ consensus estimate for Delta Apparel’s current year sales and earnings per share suggests growth of 11.6% and 9.4%, respectively, from figures released last year.
Oxford Industries currently sports a Zacks Rank # 1. The company has a surprise earnings for the last four quarters of 96.7% on average. OXM shares have risen 29.6% in the past year.
Zacks ‘consensus estimate for Oxford Industries’ current year sales and earnings per share suggests growth of 51.4% and 521.6%, respectively, from figures released last year .
Ralph Lauren currently wears a Zacks Rank # 2 (Buy). The company has a surprise of 86% on average over the last four quarters. RL shares have gained 0.9% in the past year.
Zacks’ consensus estimate for Ralph Lauren’s sales and earnings per share for the current fiscal year suggests growth of 34.5% and 331.8%, respectively, from figures released last year. RL has an expected long-term earnings growth rate of 15%.
Want the latest recommendations from Zacks Investment Research? Today you can download 7 best stocks for the next 30 days. Click to get this free report
Ralph Lauren Corporation (RL): Free Stock Analysis Report
Crocs, Inc. (CROX): Free Stock Analysis Report
Oxford Industries, Inc. (OXM): Free Stock Analysis Report
Delta Apparel, Inc. (DLA): Free Stock Analysis Report
To read this article on Zacks.com, click here.
Zacks investment research