Strong Online Sales to Help Crocs (CROX) Survive Pandemic
As the pandemic is far from over and consumers are conscious about health and safety, the online shopping trend is here to stay. Evidently, online sales have been soaring for the past few months, leading to several companies stressing on expansion of their e-commerce arm. Here, Crocs, Inc. CROX is no exception. The company witnessed a strong online show amid the coronavirus pandemic, which aided the top line in third-quarter 2020.
Despite limited store hours, online demand remained sturdy during the said quarter. This resulted in a 36.3% year-over-year increase in digital sales, marking the 14th successive quarter of double-digit e-commerce growth. Going ahead, management expects solid momentum in the digital platform to continue as consumers are increasingly shifting to online shopping. In fact, Crocs remains focused on expanding its digital and omni-channel capabilities in a bid to meet growing online orders.
Other retailers benefiting from this COVID-led online trend include Nordstrom JWN, PVH Corp. PVH and DICK'S Sporting Goods DKS. While PVH Corp.’s sales declined 18% in third-quarter fiscal 2020, digital sales grew 36% year over year. Further, e-commerce sales for Nordstrom grew 37% in third-quarter fiscal 2020, representing 54% of overall sales. Also, e-commerce sales for DICK'S Sporting skyrocketed 95% year over year in third-quarter fiscal 2020.
Coming back to Crocs, the company is also benefiting from brand strength and strong cash flow. Solid performance in the Americas and the EMEA along with healthy demand in its key products, including Clogs, Sandals, Jibbitz and Visible Comfort technology acted as key growth drivers. Driven by these upsides, it delivered better-than-expected third-quarter 2020 results, wherein both top and bottom lines increased year over year. Moreover, comparable retail store sales grew 16%, driven by solid performance in the Americas and South Korea. Encouragingly, management envisions revenue growth of 20-30% and roughly 5-7% year over year for the fourth quarter and 2020, respectively. Crocs noted that the guidance excludes any impacts related to potential shutdowns due to the ongoing COVID-19 situation.
Markedly, this Zacks Rank #2 (Buy) stock has gained 45.9% in the past three months, outperforming the industry’s growth of 21.1%. Moreover, the Zacks Consensus Estimate for earnings in 2021 has increased 1.7% in the past 30 days to $2.96 per share. Topping it, a VGM Score of B and a long-term earnings growth rate of 15% reflects the stock’s inherent strength. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Nordstrom, Inc. (JWN) : Free Stock Analysis Report
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