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As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the footwear industry, including Crocs (NASDAQ:CROX) and its peers.
Before the advent of the internet, styles changed, but consumers mainly bought shoes by visiting local brick-and-mortar shoe, department, and specialty stores. Today, not only do styles change more frequently as fads travel through social media and the internet but consumers are also shifting the way they buy their goods, favoring omnichannel and e-commerce experiences. Some footwear companies have made concerted efforts to adapt while those who are slower to move may fall behind.
The 8 footwear stocks we track reported a satisfactory Q2. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 4.4% above.
Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
In light of this news, footwear stocks have held steady with share prices up 2.5% on average since the latest earnings results.
Crocs (NASDAQ:CROX)
Founded in 2002, Crocs (NASDAQ:CROX) sells casual footwear and is known for its iconic clog shoe.
Crocs reported revenues of $1.11 billion, up 3.6% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a solid beat of analysts’ constant currency revenue estimates.
"We reported record second quarter results on both the top and bottom line which exceeded our guidance on all Enterprise metrics," said Andrew Rees, Chief Executive Officer.
Interestingly, the stock is up 1.8% since reporting and currently trades at $136.93.
Is now the time to buy Crocs? Access our full analysis of the earnings results here, it’s free.
Best Q2: Genesco (NYSE:GCO)
Spanning a broad range of styles, brands, and prices, Genesco (NYSE:GCO) sells footwear, apparel, and accessories through multiple brands and banners.
Genesco reported revenues of $525.2 million, flat year on year, outperforming analysts’ expectations by 2.5%. The business had a very strong quarter with an impressive beat of analysts’ operating margin and earnings estimates.