Crocs keeps sales and profit growth on track in Q3
today Nov 9, 2018
Niwot, Colorado-based footwear company Crocs, Inc. announced continued progress in sales and profits on Thursday, as the brand managed to achieve solid growth in the third quarter despite sales losses related to a reduced store count.
The company reported revenues of $261.1 million in the quarter ended September 30, 2018, a 7.3% increase (9.3% in constant currencies) compared to the $243.2 million posted in Q3 2017. In a press release, Crocs pointed out that this growth was achieved despite losses amounting to around $15 million due to a reduced store count and changes made to the company’s business model.
The company’s sales saw particularly strong growth in the e-commerce channel, where they rose 23.2%, while wholesale grew 9.3% and retail comparable-store sales increased 15.0%.
Croc’s income from operations in the quarter totaled $13.9 million, up from $2.7 million in the prior-year period, while net income came to $6.5 million, compared to a loss of $2.3 million.
Year to date, the company’s revenues totaled $872.2 million, compared to $824.4 million in the same period in the previous year, while net income was $49.5 million, up from $23.0 million.
“We achieved these strong results by continuing to grow our brand strength and demand for our clogs and sandals,” said Crocs President and CEO Andrew Rees in the company’s release. “We anticipate a strong finish to the year and have increased our 2018 guidance accordingly, and we are excited about our growth prospects for 2019.
In light of its positive results, Crocs announced that it has updated its full-year outlook for 2018. Instead of its previous guidance of $50 million, the company now expects income from operations to be slightly under $60 million, up from the $17.3 million reported last year. Revenues are predicted to increase by 4 to 5% compared to 2017’s $1,023.5 million, up from the company’s previous guidance of a low-single-digit increase.
In Q4, the company expects to achieve revenues of between $195 and $205 million, compared to $199.1 million in the fourth quarter of 2017.
Crocs also gave a preview of 2019, when it expects revenues to rise in the mid-single digits compared to 2018, with growth in e-commerce offsetting $25 million in lost sales due to a lower store count.
At the beginning of this month, the company continued a string of high-profile creative partnerships, which has seen the brand team up with the likes of luxury label Balenciaga and actress Drew Barrymore, through a collaboration with rapper Post Malone. This latest collaborative offering sold out within a matter of minutes upon release, suggesting that Crocs may well have every reason to be optimistic.
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