NKE - Crocs: Maintaining My 'Buy' Rating As Headwinds From Heydude Likely Priced In
2024-05-11 14:03:36 ET
Summary
- Crocs reported its Q1 FY24 earnings where revenue and earnings beat expectations, driven by the success of its Crocs brand.
- The company continues to drive new product launches, partnerships and collaborations to drive customer engagement, leading to 11% growth in ASPs in the Crocs brand.
- With strong momentum in international growth and DTC channels allowing for margin expansion in Crocs brand, the management has raised guidance for FY24.
- However, HEYDUDE continues to remain a headwind with shrinking revenues and margins, but the appointment of Terrence Reilly should spark a turnaround in the business segment.
Introduction & Investment Thesis
Crocs (NASDAQ: CROX ) is a casual lifestyle footwear and accessories company that has outperformed the S&P 500 and Nasdaq 100 YTD. I initiated a “buy” rating on the stock on April 10, and my thesis was predicated on my belief that the company will continue to see outsized success of its Crocs brand where it can drive market penetration in the US and internationally, given its brand affinity, innovative product launches, and creative partnerships and collaborations to drive higher customer engagement, rising Average Selling Prices ((ASPs)) and improving profitability....
Crocs: Maintaining My 'Buy' Rating As Headwinds From Heydude Likely Priced In