The US shoe supplier Crocs Inc. also achieved growth in sales and earnings in the third quarter of the 2023 financial year. The group owed the solid increase to strong figures from the core brand Crocs, while the Heydude label, which was taken over in spring 2022, suffered significant losses. In view of the problems at Heydude, management lowered its annual forecasts, triggering a slide in Crocs shares.
According to an interim statement published on Thursday, group sales in the three months before September 30th amounted to 1.05 billion US dollars (981.2 million euros), exceeding the level of the previous year’s quarter by 6.2 percent. Adjusted for exchange rate changes, the increase rate was 5.8 percent.
The Crocs brand remains on the road to success
The Crocs brand achieved significant growth, with sales increasing by 11.6 percent (currency-adjusted +11.1 percent) to $798.8 million. Their revenues developed particularly dynamically in the Asia-Pacific region, where they grew by 26.5 percent (+28.6 percent adjusted for currency effects) to 175.2 million US dollars.
In North America, brand sales rose by 8.0 percent (currency-adjusted +8.2 percent) to 480.7 million euros. In the EMEALA region, which includes Europe, the Middle East, Africa and Latin America, it reached $142.8 million, 8.3 percent (currency-adjusted +2.7 percent) above the corresponding previous year’s level.
Heydude’s sales fell by eight percent
However, the Heydude label went down, with revenues declining by 8.3 percent to $246.9 million. Growth in the company’s own retail sector (+14.6 percent) could not come close to compensating for a 19.4 percent decline in sales in the wholesale business.
Group operating profit increased by 3.7 percent to $273.9 million compared to the same quarter in the previous year. Adjusted for special effects, it rose by 7.8 percent to $295.9 million. Reported net profit grew by 4.5 percent to 177.0 million US dollars (166.1 million euros).
Due to Heydude’s unsatisfactory development, management felt compelled to revise its annual forecasts downwards. Only an increase in sales of ten to eleven percent to around 3.905 to 3.940 billion US dollars is now expected. The target range for diluted earnings per share adjusted for special items, which had previously been between US$11.83 and US$12.22, was lowered to US$11.55 and US$11.85.
Investors were disappointed by the current outlook: the group’s share price immediately fell by more than 15 percent.