Crocs (CROX) To Post Q4 Earnings: Factors Influencing Results

Crocs, Inc. (NASDAQ:CROX) is scheduled to release fourth-quarter 2018 results on Feb 28. Earnings of this Colorado-based company surpassed estimates in three of the trailing four quarters.

The Zacks Consensus Estimate for earnings in the fourth quarter stands at a loss of 22 cents, which shows sharp improvement from a loss of 41 cents reported in the year-ago period . We also note that the Zacks Consensus Estimate has improved by 3 cents in the past 60 days. The Zacks Consensus Estimate for revenues is $213.4 million, up approximately 7.2% from the year-ago quarter.

Crocs, Inc. Price and EPS Surprise

Factors at Play

Crocs is making efforts to drive top-line growth, improve margins and lower SG&A costs. In this regard, the company focuses on product innovation and brands strengthening. The company’s increased focus on molded footwear, especially clogs and sandals, have yielded results. Clogs accounted for 55.3% of total sales during the third quarter along with robust performance in sandals category. Also, LiteRide, the newest footwear franchise has been performing well above expectations for quite some time now.

Such well-chalked efforts are likely to have a favourable impact on the top line. We note that the company witnessed solid comps growth of 15%, marking the fifth successive quarter of comps improvement. E-commerce also rose 23.2%, recording the sixth successive quarter of double-digit rise. Management had earlier guided revenues of $211-$214 million for fourth-quarter 2018. Additionally, it anticipates revenue growth of roughly 6% for 2018.

Further, Crocs is on track with its plans to reduce SG&A expenses. Management had earlier guided SG&A costs to be 54% of total revenues during the fourth quarter, down from 60% of total revenues in the prior-year period. Meanwhile for 2018, SG&A costs are anticipated to be 46% of total revenues compared with 48.4% in the year-ago quarter.

Zacks Model

Our proven model doesn’t show that Crocs is likely to beat bottom-line estimates this quarter. For this to happen, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Crocs currently carries a Zacks Rank #1, its Earnings ESP of 0.00% makes surprise prediction difficult.

Stocks Poised to Beat Earnings Estimates

Here are few companies you may want to consider as our model shows that these have the right combination to post an earnings beat:

Zumiez Inc. (NASDAQ:ZUMZ) has an Earnings ESP of +0.18% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bed Bath & Beyond (NASDAQ:BBBY) has an Earnings ESP of +2.07% and a Zacks Rank #2.

Foot Locker (NYSE:FL) has an Earnings ESP of +2.78% and a Zacks Rank #2.

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