#Crocs #Stock #Tumbles #Heydude #Sales #Weakness #Persists
Key takeaways
- Crocs shares fell on Tuesday as sales of its smaller Heydude brand continued to be a drag on profits.
- The footwear maker reported earnings estimates for the third quarter on Tuesday, but the company also lowered its full-year forecast.
- Full-year Heydude brand sales are expected to decline 14.5% year over year, a much larger decline than Crocs’ previous forecast of an 8% to 10% decline.
Crocs, Inc. shares fell. (CROX) rose more than 18% on Tuesday after weak sales at its smaller Heydude brand overshadowed the company’s third-quarter earnings.
The footwear company reported revenue of $1.06 billion, narrowly above estimates compiled by Visible Alpha, while profits of $199.8 million also beat estimates of $187.3 million.
Investors’ concerns appear to stem from sales of Heydude shoes, a company Crocs acquired in 2022. Heydude’s revenues fell below estimates of $204 million, and the company also updated its full-year forecast, anticipating that Heydude’s sales would decline by a larger margin than previously reported.
Heydude’s sales continue to drag profits
Chief Executive Officer (CEO) Andrew Rees said Crocs has seen positive results from its investments in new brand marketing, but noted that Heydude’s recent performance and current operating environment indicate it will take longer than we initially planned for the brand. To turn the corner.”
The company said it expects fourth-quarter revenue to be roughly flat to slightly up year-over-year, with 2% growth in Crocs revenue likely offset by a 4% to 6% decline in Heydude sales. Analysts expected Heydude’s revenues in the current quarter to rise to $251.3 million from $227.6 million last year.
Crocs also updated its full-year revenue growth forecast, expecting it to come in at the low end of a previously expected range of 3% to 5%. Crocs’ revenues are expected to grow at a midpoint of 8%, while Heydude’s revenues are now expected to decline 14.5% year over year, compared to the previous range of 8% to 10% decline.
“As we reset our full-year outlook for HEYDUDE, I remain confident in the long-term trajectory of the brand,” Reiss said in a press release.
Crocs shares were recently down more than 18.5% on Tuesday at $112.49.
#Crocs #Stock #Tumbles #Heydude #Sales #Weakness #Persists
