Crocs, Inc. stock fell 5 points in mid-morning trading on Wednesday despite reporting record revenue for the full fiscal year of 2021.
The footwear giant reported revenues in the fourth quarter of $586.6 million, an increase of 42.6% from the same period last year. Revenues for the full fiscal year of 2021 were $2.3 billion, an increase of 66.9%, or 65.2% on a constant currency basis over 2020.
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“A strong 2021 holiday season completed a very successful year for our brand. We achieved incredible results with record revenues of $2.3 billion, 67% revenue growth and industry-leading 30% operating margin,” said Andrew Rees, CEO of Crocs in a statement. “Our fourth straight year of revenue growth was fueled by continued strong consumer demand for the Crocs brand globally. We are excited about our sustainable growth trajectory for both the Crocs and Hey Dude brands and are confident in our plan to grow to $6 billion in revenues by 2026.”
In the company’s earnings call on Wednesday, Rees said he is confident about Crocs’ strategy for 2022 and beyond. “We achieved strong growth in both our direct-to-consumer and wholesale channels with DTC revenues up 64% and wholesale revenues up 69% globally,” he said. “Global DTC sales were driven by higher traffic and strong average transaction value. Wholesale growth was balanced with high double-digit growth in all subchannels, including brick-and-mortar, e-tail and distributors.”
From a product perspective, Rees said that Crocs sold over 103 million pairs of footwear globally in 2021, up 49% over 2020. During the fourth quarter, the brand sold 22.6 million pairs, an increase of 19.7% over last year. Rees noted that the average selling price rose 18.9% to $25.71, attributable to price increases and fewer promotions and discounts.
“Our results continue to be driven by our key product pillars: clogs, sandals and Jibbitz. Sales of clogs were particularly strong, increasing to 80% of total footwear revenues versus 72% in 2020,” added Rees. “Sales of the Classic Clog franchise increased triple digits. … Sandals grew nearly 30%, driven by strong performance in our personalizable Classic Slide and Classic Sandal, particularly in the Americas.”
A hint as to why the stock may have slipped this morning is due to the guidance laid out in today’s call about supply chain. Rees noted that $40 million worth of orders will move from Q2 into Q3, with the largest impact being in the EMEA region. This is due to factory shutdowns in Vietnam last year combined with the continued extended trend in delayed shipping times. These factors will have lingering impacts on supply and new product introductions for the first half of 2022, Rees said.
Pressed further on the issue by an analyst on the call, Rees added that the “delays that we’re seeing from Q1 into Q2 are really transportation-related, and I would say it’s a combination of delays in loading, delays in transit and delays unloading. But we’re confident in the amount of supply that we have and the ability to grow our supply base to meet our overall annual guidance.”
Looking ahead, Crocs is expected to close its deal to acquire Hey Dude this month. The deal will be funded by $2.05 billion in cash and 2,852,280 shares issued to one of the sellers. The company is expecting revenues for Hey Dude for fiscal 2022 to be approximately $700 million to $750 million, including the period of time prior to the closing of the acquisition, and $620 million to $670 million on a reported basis.
In the first quarter of 2022, Crocs is expecting revenues to be approximately $605 million to $630 million, implying approximately 31% to 37% growth compared to first-quarter 2021 revenues of $460.1 million.
