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Crocs (CROX) Queued for Q2 Earnings: Everything Worth Noting

·3 min read
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Crocs, Inc. CROX is likely to register top and bottom-line growth, when it reports second-quarter 2021 numbers on Jul 22. The Zacks Consensus Estimate for revenues is pegged at $539 million, suggesting a jump of 67.9% from the prior-year quarter’s reported figure. In the last reported quarter, this designer, developer, manufacturer, and marketer and distributor of casual lifestyle footwear and accessories witnessed a 63.6% increase in revenues.

The Zacks Consensus Estimate for earnings has risen 2.7% over the past seven days to $1.54 per share, which suggests growth of 52.5% from the figure reported in the prior-year period. The company’s bottom line has outperformed the Zacks Consensus Estimate by a wide margin in the trailing four quarters, on average. In the last reported quarter, Crocs posted an earnings surprise of 69.3%.

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

Key Factors to Note

Crocs has been benefiting from its online business, which delivered a strong show amid the pandemic. The company’s focus on expanding digital and omnichannel capacities has been yielding results. Even as stores remained open, the company witnessed strong online demand and leveraged its omnichannel capabilities to fulfill online orders and serve customers in first-quarter 2021. 

During the quarter, digital sales soared 75.3%, marking the 16th successive quarter of double-digit growth. Consumers’ increased shift to online shopping bodes well for Crocs’ digital sales.

The company’s retail stores business also delivered a robust performance in the last reported quarter and looks well placed for the quarter under review, as people have started moving out with curbs lifted and things opening up. Management on its last earnings call stated that it expects second-quarter revenue growth of 60-70%. The company expects solid growth across all regions, thanks to continued brand momentum and lapping of store closures, which was mostly seen in the second quarter of 2020.

Crocs 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. 

We note that management has been focused on boosting brands via solid marketing efforts. Continued demand for casual clothing and footwear is likely to have worked in favor of the company in the to-be-reported quarter.

That being said, an increase in SG&A costs is a concern. On its last earnings call, management stated that it expects expenses of $12-$15 million related to distribution center investments in 2021. In the second quarter, however, adjusted operating margin is likely to expand 21-23%.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Crocs this time around. 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.

Crocs currently has a Zacks Rank #2 and an Earnings ESP of +8.44%.

Other Stocks with Favorable Combinations

Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season.

Gildan Activewear GIL has an Earnings ESP of +1.41% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Churchill Downs CHDN has an Earnings ESP of +7.42% and a Zacks Rank #2.

Deckers Outdoor DECK has an Earnings ESP of +88.00% and a Zacks Rank of 3.

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Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report

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

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

Churchill Downs, Incorporated (CHDN) : Free Stock Analysis Report

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