Casual footwear-maker Crocs said continued gains in its digital sales as well as strong uptake of its newly acquired Hey Dude brand helped drive record second-quarter sales but warned the pace of growth would likely slow down.
According to the company’s Q2 earnings release Thursday (Aug. 4), Crocs brand digital sales grew 16.8%, good for 37.2% of Crocs brand revenues, while Hey Dude digital sales were 31.5% of that brand’s overall revenues. The company expects Hey Dude’s pro forma revenues to reach $1 billion this year. Its stock is down 10% on a reduced outlook.
“The consumer demand for both our brands is exceptional, and we expect both brands to gain market share in this dynamic environment,” Crocs CEO Andrew Rees said in the release, adding Crocs and Hey Dude meet customers’ value and comfort needs.
Crocs reached a quarterly record in Q2 with revenues of $732.2 million, up 14.3% year over year, while Hey Dude revenue was $232.4, up 96% from the previous year. Company revenues were $964.6 million for the quarter, up 50.5% from the same time one year earlier, with direct-to-consumer (D2C) revenues, including retail and eCommerce, up 22.8%, and wholesale up 80.6%.
In February, Crocs said it expected digital and D2C sales to more than double by 2026. That growth was expected to come through investment in the Crocs mobile app, global social platforms, such as Douyin, and digital talent across the globe.
Read more: Crocs Look to Take a Bigger Bite From Digital Sales
Over the next four years, digital sales are predicted to be $2.5 billion. Crocs said it can achieve this goal through the combination of a fragmented $30 billion casual footwear market, aggressive marketing on TikTok and Instagram, customer satisfaction and a year-round digital opportunity.
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