Crocs are headed for a banner sales season this summer – but not the ones you're thinking of
- Crocs is confident sandals will be the brand's fastest-growing product category in 2023.
- Sandals are a $310 million business for Crocs, but it wants more of the $30 billion market.
It'll be the summer of Crocs sandals around the globe, if CEO Andrew Rees' predictions come true.
"We're incredibly confident in sandal growth in 2023, given planned newness and a significant increase in marketing allocated to sandals and the strong Crocs brand trajectory in important sandal markets such as India and Southeast Asia," Rees said during the company's quarterly earning call on Thursday. He added that classic sandals continue to perform very well in the US.
Sandal sales are part of what Crocs expects to be another record year in 2023. Total revenue for Crocs is expected to grow between 9% and 11%, up from $2.6 billion in 2022. The company also has plans to continue to expand internationally and increase US market penetration for Hey Dude, the comfortable-shoe brand it recently acquired.
Sandals are already a $310 million business for Crocs, but the company wants more of the $30 billion category. After declining in the first six months of the year, revenue for Crocs sandals grew by 31% in the back half of 2022 as Crocs pumped up marketing and introduced new models such as the Crush and Echo.
The brand's accessible price points and new styles will set the company apart from competitors, Rees said. Consumers can expect more upcoming styles of the Brooklyn wedge sandal for women and the Mellow slide this year.
Importantly, Rees noted, the target audience isn't just those who are fans of the brand's ubiquitous clogs.
"The category also provides an additional entry point to the Crocs brand for consumers who may not choose to engage with the clog," Rees said.
"With the new product introductions, marketing investments and regional brand momentum, we expect sandals to be our fastest-growing product category in 2023, reaching approximately $400 million in sales."
For the full year of 2022, Crocs reported 58% growth in revenue to $3.6 billion, including $896 million for the Hey Dude brand. Operating margin declined to 52.3%.
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