American firm Crocs' Q2 FY23 revenue climbs 11.2% to $1.072 bn

Direct-to-Consumer (DTC) revenues, which encompasses retail and e-commerce, witnessed a significant 26 per cent growth year-on-year (YoY) in Q2 FY23, or 27.2 per cent on a constant currency basis. However, wholesale revenues saw a minor increment of 0.2 per cent compared to Q2 FY22, or 0.8 per cent on a constant currency basis, Crocs said in a press release.

The company saw a significant increase in its gross margin in Q2 FY23, reaching 57.9 per cent compared to 51.6 per cent in the prior year. Adjusted gross margin also witnessed improvement, up by 290 basis points to 58.1 per cent.

Selling, general, and administrative expenses rose to $302.8 million, a significant increase from the $249.8 million recorded in the same period last year. Consequently, selling, general, and administrative expenses as a percentage of revenues climbed to 28.2 per cent, an increase from 25.9 per cent in the prior year.

Income from operations saw a significant 28.4 per cent YoY increment to $318.5 million. The operating margin also saw a healthy increase, rising to 29.7 per cent compared to 25.7 per cent for the same period last year.

Diluted earnings per share (EPS) also experienced a healthy growth in Q2 FY23, rising 31.4 per cent to $3.39, compared to $2.58 for the same period last year. Adjusted diluted EPS saw a 10.8 per cent increase to $3.59 compared to 2022.

Revenues for the Crocs brand showed strong growth, increasing 13.8 per cent YoY, or 14.9 per cent on a constant currency basis, to $833.0 million. DTC comparable sales rose by 19.5 per cent YoY, while wholesale revenues grew 3.8 per cent YoY, or 4.6 per cent on a constant currency basis.

In terms of geographical performance, North America revenues rose 12.2 per cent YoY, or 12.5 per cent on a constant currency basis, to $474.6 million. Asia Pacific revenues also witnessed a significant 33.2 per cent YoY surge, or 39 per cent on a constant currency basis, reaching $198.3 million. However, revenues in Europe, Middle East, Africa, and Latin America (EMEALA) saw a minor decline of 0.2 per cent YoY, or 1.4 per cent on a constant currency basis, totalling $160.1 million, the release added.

The Heydude brand reported a moderate revenue increase of 3 per cent YoY to $239.4 million for the quarter, with DTC revenues showing a significant growth of 29.7 per cent YoY. However, wholesale revenues faced a decline of 8.4 per cent YoY following the pipeline fill in the same period last year.

"We achieved record quarterly revenues of over $1 billion, representing growth of 12 per cent on a constant currency basis to prior year. Both the Crocs and Heydude brands continue to gain share and bring in new consumers with our comfortable offerings, as evidenced by DTC growth of 26 per cent in the second quarter," said Andrew Rees, chief executive officer. "We continue to invest behind our strategic priorities that are driving profitable growth."

Fibre2Fashion News Desk (DP)