Crocs Inc. (NASDAQ:CROX) shares jumped 9.7% on Thursday after the casual footwear company delivered third-quarter results that handily beat analyst estimates, even as overall sales declined from a year earlier.
The company reported adjusted earnings of $2.92 per share, far exceeding the consensus forecast of $2.36, while revenue reached $996.3 million, topping expectations of $961.61 million. However, revenue still fell 6.2% year-over-year amid weakness in the HEYDUDE brand.
The Crocs brand saw a 2.5% decline in revenue to $836 million, while HEYDUDE sales dropped 21.6% to $160 million. International markets remained a bright spot for the company, with Crocs brand international revenue rising 5.8% to $389 million, reflecting strong consumer demand outside North America.
“Our third-quarter performance was driven by disciplined execution against our brand strategies, as well as greater product and go-to-market innovation,” said Andrew Rees, Chief Executive Officer. “The strength of our profitability and cash flow enabled us to repurchase 2.4 million of our outstanding shares and pay down $63 million of debt during the quarter.”
Even with softer top-line results, Crocs maintained robust profitability, reporting a gross margin of 58.5%, down slightly from 59.6% a year ago, and an operating margin of 20.8%, compared to 25.4% in the prior-year quarter.
Looking ahead, the company anticipates fourth-quarter revenue will fall about 8% year-over-year. It expects an adjusted operating margin near 15.5% and adjusted earnings per share in the range of $1.82 to $1.92.