Dive Brief:
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The Crocs brand topped $1 billion in quarterly revenue for the first time, growing over 4% year on year, the company reported Thursday.
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The brand’s direct-to-consumer revenue rose 13% to $559 million while wholesale fell 5%. North America revenue edged up slightly to $459 million, while international surged 8%.
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Crocs Inc.’s Heydude brand saw DTC revenue growth, too, of more than 7%, thanks to TikTok Shop and a record Amazon Prime Day. But wholesale there fell over 17% and Heydude revenue overall fell 6% to $179 million.
Dive Insight:
It was just a 0.4% bump, but the Crocs brand’s return to growth in North America snaps a losing streak of five straight quarters of declines, as measured by Needham analysts led by Tom Nikic.
“Crocs enjoyed a strong sandal season, as well as successful clog innovations” like the Echo 2 and Crocband Runner, Nikic said in emailed comments.
This won’t be the story for the whole year, but growth in North America remains a priority at both brands, CEO Andrew Rees told analysts Thursday morning.
“The second quarter continued to build on our strong start to the year as consumers responded positively to product newness and marketing activations across channels and geographies,” Rees said.
Although Heydude posted further declines, its struggles have eased, and executives said they expect the brand to return to growth in Q4. The brand got a boost from ostensibly negative reports that the shoes are increasingly not allowed for hacky sack because they provide an unfair competitive advantage.
Its decline was less than expected and “DTC remained strong at +7%, aided by some virality the brand enjoyed during the quarter (the shoes were ‘banned’ from hacky sack events, which Gen Xers might be surprised to hear are a thing again),” Nikic said.
Year-on-year comparisons are very easy for Heydude, “but it does seem as though the brand is stabilizing after years of declines, and may be ready to grow again,” Nikic also said.
