The Rise of Crocs
There’s been a rumble in the market jungle as Crocs stock swung into the earnings limelight this week, flexing its muscles after surpassing Q1 earnings predictions on a thunderous Tuesday. With a jaw-dropping +40% surge this year, the footwear and apparel mogul has left competitors like Guess (GES) and Ralph Lauren (RL) eating its dust.
Strong Q1 Surge
Crocs’ brand melody continues to resonate, with Q1 sales crescendoing by 6% year over year to an impressive $938.63 million, outstripping estimates by 6%. What’s even more harmonious is the company’s enhanced profitability, as earnings hit $3.02 per share, marking a 16% crescendo from the previous year and sailing 34% past EPS forecasts.
Growth & Prospects
Forecast whisperers at Zacks predict a 3% uptick in Crocs’ annual earnings by fiscal 2024, with a projected additional 9% expansion in FY25 to hit $13.56 per share. Total sales are set to unfold a 4% growth spurt this year, with a further 6% leap expected in FY25, reaching a zenith of $4.37 billion.
Premium P/E Outlook
Despite the dizzying rally of Crocs stock since the year’s dawn, CROX continues to prance at a modest 10.9X forward earnings valuation. This poses a slight discount compared to the Zacks Textile-Apparel Industry mean of 12.5X, overshadowing Ralph Lauren’s 14.8X, while crossing paths with Guess at 9.1X.
The Verdict
As the curtain falls, Crocs stock graciously accepts a Zacks Rank #3 (Hold). Given the company’s trajectory of growth and alluring valuation, keeping a piece of CROX in your portfolio may continue to sprout returns, yet there could be a pot of buying gold at the end of such a blazing first act.