Crocs, Inc., for its third quarter, said, Revenues were 312.8 million dollars, growing 19.8 percent over the third quarter of 2018 or 21 percent on a constant currency basis. The company added that net income was 35.7 million dollars, up from 6.5 million dollars in the third quarter of 2018, while adjusted net income was 40.2 million dollars and 14.8 million dollars in the third quarters of 2019 and 2018, respectively. Diluted earnings per share rose to 51 cents from 7 cents in the third quarter of 2018 and adjusted diluted earnings per share reached 57 cents compared to 19 cents in the third quarter of 2018.
Commenting on the trading update, Andrew Rees, President and Chief Executive Officer, said, in a statement: “We delivered an excellent quarter highlighted by 20 percent top-line growth and record third quarter revenues of 313 million dollars. Based on the strength of our recent performance and start to the fourth quarter, we are raising our full year guidance to 11 percent to 12 percent revenue growth over 2018, which would result in record annual sales for our company. The Crocs brand momentum continues to gain pace, and for 2020, we anticipate revenue growth over 2019 of 12 percent to 14 percent.”
Crocs raise full year outlook
The company said, currencies negatively impacted revenues by approximately 3 million dollars, while store closures reduced revenues by approximately 4 million dollars. The company’s wholesale revenues grew 25.4 percent, e-commerce revenues grew 28.2 percent, and retail comparable store sales grew 12.5 percent. Gross margin was 52.4 percent, compared to 53.3 percent in last year’s third quarter, while adjusted gross margin, which excludes 120 basis points of non-recurring expenditures related to the relocation of US distribution center, was 53.6 percent, up 30 basis points compared to last year’s third quarter.
For the fourth quarter of 2019, the company expects revenues to be between 245 and 255 million dollars compared to 216 million dollars in the fourth quarter of 2018 with negative impact of approximately 2 million dollars of currency changes and approximately 2 million dollars resulting from store closures. Adjusted gross margin is expected to be approximately 50 percent compared to 46.2 percent, while on a GAAP basis, gross margin is expected to be approximately 49 percent, which includes 100 basis points of non-recurring charges associated with the company’s new US distribution center.
With respect to 2019, the company now expects revenues to grow 11 percent to 12 percent over 2018 revenues of 1,088.2 million dollars, compared to prior guidance of 9 percent to 11 percent. The company expects 2019 revenues to be negatively impacted by approximately 28 million dollars of currency changes and approximately 20 million dollars resulting from store closures. Adjusted gross margin is expected to be approximately 51 percent, compared to prior guidance of 50.5 percent, reflecting the increased strength of the Americas business. On a GAAP basis, gross margin is expected to be approximately 50 percent, reflecting non-recurring charges of approximately 100 basis points associated with the company’s new US distribution center.
With respect to 2020 revenues, the company expects 12 percent to 14 percent growth over 2019 revenues, estimating that currency will negatively impact results by approximately 10 million dollars.