Shares of Crocs (CROX 1.53%) skyrocketed 20.3% on Monday after the footwear company updated its fourth-quarter and full-year 2023 outlook citing strong holiday-season sales.
On Crocs' impressive holiday season
In a press release Monday morning, Crocs told investors it now expects fourth-quarter 2023 revenue to increase 1% year over year, well above previous guidance for a decline of negative 4% to negative 1%. Crocs' fourth-quarter strength was driven entirely by its namesake brand, which grew sales nearly 10% and more than offset a 19% decline from its HEYDUDE segment.
Crocs' CEO Andrew Rees called it a "successful holiday season with market share gains for both brands."
As a result, Crocs increased its outlook for full-year 2023 revenue to grow over 11% from 2022, up from previous guidance for 10% to 11% growth. The company further raised its 2023 adjusted (non-GAAP) operating margin outlook to be in excess of 27%, a slight improvement from its old guidance for the metric to arrive at "approximately 27%."
What's next for Crocs investors?
Crocs also gave investors a sneak peek at its expectations for the coming year, providing preliminary guidance for 2024 revenue growth of 3% to 5%. Within that total, Crocs brand sales should be up 4% to 6% (from just over $3 billion in 2023), and HEYDUDE brand revenue should be "flat to slightly up" from $949 million last year.
With shares of Crocs still down around 8% over the past year even after this pop, investors are rightly encouraged to see the company ending 2023 on a high note. If it can sustain this momentum in the coming quarters, Crocs might well prove to be a worthy portfolio candidate for 2024.
