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Crocs (CROX) Lined Up for Q3 Earnings: Factors Worth Noting

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·3 min read
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Crocs, Inc. CROX is likely to register an increase in the bottom line when it reports third-quarter fiscal 2021 numbers on Oct 21, before the market opens. The Zacks Consensus Estimate for third-quarter earnings per share has increased by a penny to $1.88 over the past seven days. The figure suggests a sharp increase from earnings of 94 cents reported in the year-ago period.

This Broomfield, CO-based company has a trailing four-quarter earnings surprise of 43.6%, on average. In the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate by a margin of 37.7%.

Meanwhile, the Zacks Consensus Estimate for revenues is pegged at $612.4 million, indicating an improvement of 69.3% from the prior-year reported figure.

Key Factors to Note

Crocs has been gaining from sturdy consumer demand for its brands worldwide. The company’s focus on product innovation and marketing, digital capabilities, and tapping of growth opportunities in Asia, primarily China, is likely to get reflected in the to-be-reported quarter’s top line. Markedly, direct-to-consumer channel has been a significant growth driver for the company. Management on its last earnings had guided third-quarter revenue growth in the band of 60-70%.

The company offers a wide variety of footwear products, including sandals, wedges, flips and slides, which cater to people of all ages. In the recent quarters, Crocs’ top line has been gaining on healthy demand in its key products, including Clogs, Sandals and Jibbitz. Continued demand for casual clothing and comfortable footwear might have worked in favor of the company in the to-be-reported quarter.

While aforementioned factors raise optimism, we cannot ignore the ongoing supply chain issue and temporary factory closures in Vietnam — the company’s major manufacturing hub — due to the pandemic. Also, an increase in SG&A costs remains a concern. Nonetheless, Crocs had guided adjusted operating margin in the range of 24-26% for the third quarter. The projection suggests an expansion from adjusted operating margin of 20.8% reported in the year-ago period.

Crocs, Inc. Price, Consensus and EPS Surprise

Crocs, Inc. Price, Consensus and EPS Surprise
Crocs, Inc. Price, Consensus and EPS Surprise

Crocs, Inc. price-consensus-eps-surprise-chart | Crocs, Inc. Quote

What Does the Zacks Model Unveil?

Our proven model does not conclusively predict a beat for Crocs this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Crocs has a Zacks Rank #1 but an Earnings ESP of -2.26%.

3 Stocks With Favorable Combination

Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Steven Madden SHOO has an Earnings ESP of +4.55% and a Zacks Rank #2.

Gildan Activewear GIL has an Earnings ESP of +7.14% and a Zacks Rank #3.

Hanesbrands HBI has an Earnings ESP of +2.13% and a Zacks Rank #3.


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Hanesbrands Inc. (HBI) : Free Stock Analysis Report

Crocs, Inc. (CROX) : Free Stock Analysis Report

Gildan Activewear, Inc. (GIL) : Free Stock Analysis Report

Steven Madden, Ltd. (SHOO) : Free Stock Analysis Report

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