In the second quarter, Crocs saw its revenue increase 93% to $641 million, vs. $566 million expected. The company's operating income saw an increase of $139 million to $195 million. Adjusted earnings per share came in at $2.23, vs $1.59 expected, and direct-to-consumer sales grew a staggering 78.6% compared to 2020 and 86.4% compared to 2019, representing 52.0% of second-quarter revenues.
The company has also raised its full-year revenue growth and operating margin guidance, sending the stock rising early in the trading session.
Crocs success shows 'diversity and maturity in the sneaker market'
The beat likely came as no surprise to online marketplace StockX, which recently came out with its midyear report showing that Crocs is one of the fastest-growing year-over-year brands on the platform (+430) along with Birkenstock (+610%), Louis Vuitton (+440%), Alexander McQueen (+370%), and Reebok (+210%.)
“I think this really shows that there is much more diversity and maturity in the sneaker market than a lot of people might commonly think. There’s lots of threats to the dominant players. Even something like Reebok, which is actually a very large brand, it’s on our top 10 list as is Crocs. Those two brands have seen huge growth of over 200% [year over year] in both cases,” Jesse Einhorn, StockX senior economist, told Yahoo Finance.
When it comes to a winning strategy for these brands, Einhorn tells Yahoo Finance that collaboration is key.
“Collaborations really are the lifeblood of the sneaker game, specifically the hyped sneaker game and the two brands you mentioned, Crocs and also Birkenstocks, as well as Reebok have all pursued really strong, jarring collaborations over the past year,” he said.
“Take the example of Crocs. They partnered with a wide range of artists, Justin Bieber, Post Malone, Luke Combs, as well as brands like KFC, and done these really outside-the-box storytelling opportunities that have connected with a much broader range of customers. Through these collaborations, Crocs is able to kinda enter a space that they previously had had absolutely no relevance. Crocs was not a brand that was top of mind for most sneaker buyers, even a couple of years ago,” Einhorn added.
While sneakers might be the biggest attraction on StockX, they're not the only game in town. Collectibles have been doing big business on the platform. Einhorn noted that the highest selling product over the last year on StockX was not a sneaker but a game console — the Sony (SONY) PlayStation 5, selling more than 150,000 units. When it comes to Gross Merchandise Value (GMV), or total dollars spent, three of the top 5 items sold on StockX were gaming consoles, including the two PS5s and the Microsoft (MSFT) Xbox Series X.
“That just goes to show these smaller verticals besides sneakers are dominant. A lot of these collectible and electronics products are actually crushing it when it comes to individual releases. Emerging category GMV is up 250%.”
Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.