Retail: 75
Retail: 188
Mon, Aug 28, 2017
Vol 1, Issue No. 33

Footwear Insight
Crocs Sees Growing Americas’ Business, Anticipates Q4 Profit

Momentum continues to grow for Crocs in the Americas where Q3 revenues rose more than 35 percent to $185.2 million and Classic Clog inventories were restored to “appropriate levels.” Now, the company is projecting its first Q4 profit in eight years as total revenues rise 13-18 percent. FY19 revenues for the company, which saw large institutional holder Blackstone divest 6.8 million shares on Oct. 31 for more than $248 million, are forecast to increase 11-12 percent as adjusted gross margin approaches 51 percent.

“We’re absolutely thrilled with the performance in the Americas,” President and CEO Andrew Rees told analysts last week. “…I would say over the last 12-18 months, we’ve added accounts. We’ve penetrated key accounts that we thought were important to our brand and reaching our core consumers. I think the biggest increase in terms of dollars was increased placement, accelerated sell-throughs at our core accounts.”

With sandals seen as a significant long-term growth opportunity for the brand given their solid adoption rate by its core consumers, Crocs is also banking on more widespread, global adoption of Crocs’ customization using its Jibbitz charms that already have some momentum in the Americas’ region. In a separate development, the relocation of Crocs’ Americas’ distribution center to Dayton, OH from Los Angeles is on track with the California facility set for closure by year-end.

In other footwear news,

  • Asics realized a 23 percent wider nine-month net loss in North America despite 2 percent topline growth to the equivalent of $531.5 million. The company reported strong sales in the performance running and core performance sports segments. Overall, parent Asics Corp. released a 5 percent global drop in performance running sales for the nine months to the equivalent of $1.17 billion.
  • Under Armour and its accounting practices are being investigated by federal authorities, according to a Wall Street Journal report last night. The inquiry is reportedly being conducted by prosecutors from the U.S. Justice Dept. and investigators from the Securities and Exchange Commission. Officials at Under Armour, slated to report Q3 results today, said the company has been cooperating with the investigators and “believes its accounting practices and disclosures were appropriate.”