Crocs, Inc (NASDAQ:CROX) shares jumped in early trade after the company reported a sharp rise in fourth-quarter and full-year 2022 revenue and also guided for a strong 2023.
The maker of innovative casual footwear for women, men, and children said revenue for the three months to December 31, 2022, increased by 61% to $945 million, beating consensus expectations of about $939 million. Its adjusted gross margin decreased 1,040 basis points to 53.3%, partly due to the February 2022 acquisition of the HEYDUDE brand.
Adjusted earnings per share (EPS) of $2.65, up 23% from the $2.15 reported a year earlier, beat the $2.26 per share expected by analysts, according to FactSet.
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For the full year, Crocs reported record revenues of $3.6 billion, up 54% from 2021, while its adjusted gross margin fell 720 basis points to 54.4%. It noted that this excluded $74.8 million of costs, primarily related to the HEYDUDE acquisition and integration. Full-year adjusted diluted EPS rose 31% to $10.92.
"Consumer demand for the Crocs and HEYDUDE brands has been exceptional, fueling record 2022 revenues for both brands at a combined $3.6 billion and top-tier adjusted operating margin of 28%," Crocs CEO Andrew Rees said in a statement. "We anticipate another record year in 2023 with growth expected to be led by sandals and international for the Crocs Brand and increased US market penetration for HEYDUDE.”
The company ended December with cash and cash equivalents of $192 million, down from $213 million in December 2021. Borrowings amounted to $2.3 billion, up from $772 million, driven by borrowing used to fund a portion of the HEYDUDE acquisition.
It has guided investors for 1Q 2023 revenue to be 27% to 30% up on 1Q 2022, with adjusted diluted EPS of between $2.06 and $2.19.
Croc’s shares traded 8% higher at $135.71 shortly before noon in New York.
Contact the author at stephen.gunnion@proactiveinvestors.com