Important points
Crocs stock fell sharply on Tuesday as sales of its smaller Haydude brand remained a drag on profits. The footwear maker’s profit reported Tuesday beat expectations for the third quarter, but the company also cut its full-year forecast. Full-year sales for the Heydude brand are expected to be down 14.5% year over year, a sharper decline than Crocs’ previous forecast of an 8% to 10% decline.
Crocs Inc. (CROX) stock fell more than 18% on Tuesday as the company’s third-quarter profit growth was overshadowed by weak sales of its smaller brand Heydude.
The company had revenue of $1.06 billion, slightly above expectations compiled by Visible Alpha, and profit of $199.8 million, beating estimates of $187.3 million.
Investor concerns appear to stem from shoe sales from Heydude, a company Crocs acquired in 2022. Haydude sales were below expectations of $204 million, and the company also updated its full-year forecast, expecting Haydude sales to be significantly lower than previously reported. .
Heydude sales continue to drag down profits
Chief Executive Officer Andrew Rees said Crocs was seeing positive results from the brand’s new marketing investments, but that Heydude’s “recent performance and current operating environment This suggests that development will take longer than originally planned.” To turn the corner. ”
The company expects fourth-quarter sales to be flat to slightly up compared to the same period last year, as a 2% increase in Crocs sales will likely be offset by a 4% to 6% decline in Heydude sales. He said he expected it. Analysts had expected Haydude’s sales for the current quarter to be $251.3 million, up from $227.6 million a year earlier.
Crocs also updated its full-year sales growth forecast, expecting it to remain at the lower end of its previous forecast of 3% to 5%. Crocs’ revenue is projected to be at the midpoint of 8% growth, while Heydude’s revenue is now expected to decline 14.5% year-over-year, compared to a previous decline of 8% to 10%.
“While we are resetting our full-year outlook for HEYDUDE, I remain confident in the brand’s long-term trajectory,” Reese said in a news release.
Crocs stock recently fell more than 18.5% to $112.49 on Tuesday.
