Crocs increased its revenue by 6.2% in the third quarter and crossed the $1 billion mark.Crocs increased its revenue by 6.2% in the third quarter and crossed the $1 billion mark. At the same time, the company's revenues from direct sales increased by 17.8%, while revenues from wholesale sales decreased by 3.6%.
The revenue of Crocs brand grew by 11.6% over the year and amounted to almost 800 million dollars. Revenue from the company-owned HeyDude brand fell 8.3% to $247 million. The retailer's gross margin increased to 55.6% from 54.9% last year. Net income rose 4.5% to $177 million.
Crocs remains one of the most popular brands globally. Store traffic rose 13.1% in the third quarter. However, the company has yet to improve the position of HeyDude brand. Crocs expects that the DTC brand's sales could drop 20-25% in the fourth quarter.
"We see the HeyDude brand essentially being sold almost everywhere that the Crocs brand is sold," Rees said. "So think about the primary chains, we're talking about family footwear, we're talking about sporting goods, we're talking about mall-based specialty, and then I would say also some sort of super-regional chains."
Crocs announced the purchase of HeyDude in late 2021. The deal was valued at $2 billion in cash and $450 million in stock. CFO Anne Mehlman said the company remains focused on driving HeyDude sales.
"We’re maximizing for the long term health of the brand. It’s certainly prioritizing profitability from a gross margin standpoint, but not maximizing for profitability overall,” she said. "We think it’s really important for us to invest. We made a conscious decision to continue to invest in Q4. We certainly could maximize for short term profitability, but we don’t actually think that gets us the best long term outcome."