Published on 11 Apr 2024 on Zacks via Yahoo Finance

Here's Why Crocs' (CROX) Stock Is a Lucrative Investment Bet

Crocs, Inc. CROX appears well-poised for growth, thanks to its robust business strategies. The company has been gaining from solid consumer demand across the Crocs and HEYDUDE brands, backed by effective pricing actions. It is seeing strength in clogs, sandals and personalization for a while.In fourth-quarter 2023, the company’s bottom line surpassed the Zacks Consensus Estimate for the 15th consecutive time. Buoyed by such upsides, this current Zacks Rank #2 (Buy) company has gained 48% in the past three months compared with the industry’s 8.5% growth.

Let’s Delve Deep

Crocs has been witnessing a decline in inbound freight costs, which have been contributing to gross margins for quite some time now. Also, favorable ocean freight rates, the absence of air freight and lower promotional activity in the Crocs brand have been acting as tailwinds. In fourth-quarter 2023, adjusted gross profit rose 6.1% year over year, while adjusted gross margin expanded 240 basis points (bps) to 55.7%, owing to gains from lower freight costs across both brands.Each of clogs, sandals and personalization categories grew double digits during 2023. In the same period, the HEYDUDE brand delivered revenues of nearly $950 million and more than $200 million in operating income. The company’s Jibbitz business has also been doing well for quite some time now. This business increased 17% to more than $0.25 billion, accounting for roughly 9% of the total mix in 2023.