Crocs Set to Hit Billion in 2011 - Analyst Blog
January 17 2012 - 5:00AM
Zacks
Shoe manufacturer Crocs
Inc (CROX) recently announced that it expects to achieve
the higher end of its revenue guidance of $200 million to $205
million for the fourth quarter of 2011, based on the solid
performance of retail business. Thus, the Niwot, Colorado-based
company expects to post revenues of more than $1 billion for fiscal
2011, as against revenues of $790 million in 2010.
We believe that it is a remarkable
achievement for the company to garner revenues of $1 billion in
less than a decade. The footwear company succeeded in driving its
revenue on the strength of its brand and solid presence in the
international market.
Encouraged by the news, the
company’s share price surged $2.61 to close at $18.56 on
Wednesday.
However, the company reiterated its
earnings forecast in the range of 3 cents to 5 cents for the fourth
quarter of 2011, as business in Europe remains soft owing to the
challenging macroeconomic conditions.
Crocs, which primarily operates in
Europe, Asia and America, continues to make efforts to drive
margins and expects gross margin to be in the mid-50% range in
2011. Crocs balance sheet position also remains strong with no debt
and a new $70 million line of credit
For 2012, the company plans to open
net 80 to 100 retail stores globally and shutdown a number of
kiosks in the United States. In the first half of 2012, the company
expects to close 25 to 30 kiosks.
The company’s long-term growth
objectives are to sustain growth as well as expand in regions,
product growth with average selling price (ASP) expansion,
direct-to-consumer roll out and continuous investment in both the
retail and Internet businesses.
In the recently concluded third
quarter, revenue jumped 27.5% to $274.9 million. Sales rose 24.3%
at wholesale, 31.4% at Retail and 33.7% at Internet. Gross profit
enhanced 23.9% to $147.2 million.
The Zacks Consensus Estimates for
fiscal 2011 and 2012 are pegged at $1.23 and $1.46, respectively.
We expect estimates to go up in the coming days as the company has
raised its sales outlook.
Crocs, which competes with
Deckers Outdoor Corp. (DECK) and Nike
Inc (NKE), expects to report fourth quarter 2011 results
on February 24, 2012.
Crocs, which sell more than 250
designs for men, women, and children, currently retains a Zacks #3
Rank, implying a short-term Hold rating on the stock. Our long-term
recommendation for the stock remains Neutral.
CROCS INC (CROX): Free Stock Analysis Report
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NIKE INC-B (NKE): Free Stock Analysis Report
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