Crocs' Stronger-Than-Anticipated Q4 & Revenue Diversification Progress Trigger 44% Price Target Boost By This Analyst

  • Stifel analyst Jim Duffy reiterated a Hold rating on the shares of Crocs Inc CROX and raised the price target from $74 to $107.
  • The company raised its FY22 revenue guidance to $3.55 billion, a 53% Y/Y growth.
  • For FY23, the company expects revenue growth of 10% to 13% compared to 2022 to $3.9 billion - $4.0 billion (consensus $3.92 billion) at current currency rates.
  • For the Crocs brand, following pandemic disruption to new product introductions, 2023 growth expectations are buttressed by encouraging newness including Echo, Crush, and Mellow franchises and sandals are expected to grow double digits, the analyst said.
  • For the HEYDUDE brand, 2023 will, for the first time, reflect product direction under CROX leadership, a more cohesive assortment for retail partners, and an improved boot offering for 2H, the analyst said.
  • The analyst awaits details on Crocs brand operating profit contribution by region from the 10K but suspect Crocs brand international profit improved y/y, offsetting a decline in the Americas profit pool related to higher shipping expense and promotion.
  • The analyst raised estimates and price target to reflect stronger 4Q22 revenue, particularly in international markets, in both the Crocs and HEYDUDE brands.
  • Looking forward to FY23 and FY24, the analyst models similar revenue growth rates on top of rebased 2022 estimates, operating margins in line with prior estimates, and lower interest expense related to the debt paydown.
  • Price Action: CROX shares are trading higher by 6.28% at $122.51 on the last check Wednesday.
  • Photo Via Wikimedia Commons
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