Shares of Crocs Inc. CROX leapt 7.0% toward a 13-month high in premarket trading Thursday, after the casual footwear seller reported a big fourth-quarter profit beat and provided an upbeat outlook, citing “exceptional” demand for Crocs and HEYDUDE shoes. Net income fell to $137.7 million, or $2.20 a share, from $154.9 million, or $2.57 a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share rose 23.3% to $2.65, well above the FactSet consensus of $2.26. Revenue grew 61.1% to $945.2 million, beating the FactSet consensus of $939.1 million. Meanwhile, cost of sales grew much more than sales, up 109% to $448.8 million, as gross margin contracted to 52.5% from 63.4%, with half the gross margin contraction related to the addition of the HEYDUDE brand. For the first quarter, the company expects adjusted EPS of $2.06 to $2.19 and revenue growth of 27% to 30%, while the FactSet consensus for EPS is $2.08 and for revenue of $819 million implies 24% growth. “Consumer demand for the Crocs and HEYDUDE brands has been exceptional, fueling record 2022 revenues for both brands…,” said Chief Executive Andrew Rees, who expects another record year in 2023. The stock has run up 29.2% over the past three months through Wednesday, while the S&P 500 SPX has gained 4.8%.
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