Crocs shooting for $5 billion in revenues by 2026
Crocs, the footwear maker known for its instantly recognizable foam clogs, has revealed a new five-year growth framework through which it is hoping to achieve revenues of $5 billion by 2026, notably through digital expansion.
“We are incredibly proud of the track record of growth and shareholder value creation since we first embarked on the turnaround of the Crocs brand in 2014,” said the company’s CEO, Andrew Rees, in a release.
“Looking forward, we expect the Crocs brand to grow to over $5 billion in sales by 2026,” he added. “We are confident in our ability to deliver this growth while maintaining industry-leading profitability, creating significant shareholder value, and having a positive impact on our planet and our communities.”
Crocs’ five-year strategy predicts a compound annual growth rate of 17%, which takes the midpoint of the company’s 2021 guidance as the base year. Driving digital growth will remain a “top priority” for the brand, which expects 50% of its total revenues to be derived from digital channels by the end of 2026.
As well as digital development, the company outlined three other main areas of focus in its growth strategy, namely gaining market share in sandals, capturing growth in Asia, and innovating in both product and marketing.
Through its five-year framework, Crocs also hopes to see high levels of profitability and cash flow, with non-GAAP operating margins expected to rise above 26% by 2026, while free cash flow is predicted to be over $1 billion.
Crocs CFO, Anne Mehlman, did highlight uncertainty surrounding the ongoing Covid-19 pandemic – particularly its effects on the brand’s manufacturing operations in Vietnam – as a potential stumbling block as the company moves forward with its strategy, but was keen to emphasize that the brand is, nonetheless, confident in its ability to achieve its 2026 targets.
In the second quarter ended June 30, 2021, Crocs achieved revenue of $640.8 million, an increase of 93.3% year over year. Quarterly net income at the company was $319.0 million, or $4.93 per diluted share.
On Tuesday, the footwear maker reiterated its full-year guidance for 2021, which predicts revenue growth of 60% to 65% compared to $1.39 billion in 2020.
Alongside its financial goals, Crocs is also pursuing ambitious sustainability targets, including achieving net zero emissions by 2030 and becoming a 100% vegan brand before the end of 2021. As part of these objectives, the brand recently announced the launch of a new bio-based version of its proprietary Croslite foam material.
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