At a time when comfort supersedes trendiness in footwear, casual shoe brand Crocs posted record sales in the first quarter of 2021, prompting the company to boost its sales outlook for the rest of the year.
Share prices for the company soared to over 16% at day’s end last April 27th just after Crocs raised its revenue outlook for the year. This development follows record sales for the company in the first quarter of the year.
The ‘It’ Shoe Does Good
Referred to as the “it” shoe of the pandemic, global demand for Crocs’ signature rubber clogs rose throughout the past year. According to company CEO Andrew Rees, Crocs have become a favorite among those working from home as these are a comfortable and colorful choice.
With the exception of several one-time adjustments, Crocs bucked analysts’ predictions of 89 cents per share by earning a record $1.49 per share at the end of the quarter – a substantial rise compared to how it earned just 16 cents per share in the same period last year.
Consequently, company earnings rose to $460.1 million, again bucking the expected $415 million predicted by industry watchers.
This 64% rise in the shoemaker’s revenue was credited to the surge 75.3% in digital sales in the first three months of 2021. This made up 32.3% of the company’s total quarterly revenue, quite a jump compared to the 30.1% – approximately $11.1 million – seen at the end of the same period last year.
A Paradigm Shift Pays Off
The rise in digital rather than brick-and-mortar sales is the direct result of consumers resorting to online shopping in light of ongoing local stay at home advisories or more widespread quarantines both in the United States and throughout the world.
As of the end of 2021, Crocs’ direct-to-consumer sales either from stores or the sales hub on its website have grown to 93.3%, earning the company approximately $170.1 million.
Meanwhile, Crocs also posted a 50.1% increase in its wholesale revenue, earning around $290 million as of end-2021.
However, Crocs has ended its contracts with a number of its North American wholesale partners. While the company is yet to disclose which wholesalers it has severed ties with, the move is seen as a way to maintain a tighter sense of control over the brand.
At press time, Crocs continues to operate 349 stores worldwide, 165 of which are scattered throughout the Americas.
Rethinking Core Strategies
As the company moves forward into the second half of 2021, it is expected to focus on strategic accounts, particularly its primary online retailers, as well as those specializing in sporting goods and specialty footwear, as well as family-friendly retailers.
As it hits the midpoint of Q2-2021, Crocs expects sales to grow by 60 to 70% year on year – a substantially higher number than the industry-projected growth rate of 39.2%. For the rest of the year, Crocs is optimistic that sales can go as high as 50%.
Likewise, while it continues to enjoy strong and sustained growth in its American markets, the company is looking towards Asia for further growth. Asia is considered the world’s second-largest market for footwear, and Crocs has been one of the more popular global brands within the region.