Despite the strong growth numbers, Crocs adjusted its guidance for the full year, anticipating consolidated revenue of $3.39 billion to $3.51 billion; its prior outlook called for about $3.5 billion. The Crocs brand is also now expected to have revenue growth between 14% and 17%; it was previously expected to be over 20%.
The adjustment was a response to the uncertainty of “macroeconomic and external headwinds” such as inflation and rising interest rates that are “weakening consumer sentiment in the U.S.” Rees said on the call.
“In the light of the current environment, we are very focused on managing the business prudently in order to maintain high levels of profitability and strong cash flow,” Rees added.
Part of taking on these new economic challenges for the brand includes “leaning on a proven playbook,” Cooley said.
“The fact that we’re comfortable, the fact that we’re accessible, the fact that we enable self-expression and we can bring this joy and optimism in a time of uncertainty like that will continue to guide how we come to the market in the future,” Cooley said. “And because we are intentionally close to the market and close to the consumer, we’re able to capitalize on key moments in real time, that a lot of brands aren’t able to do.”
Part of that playbook in recent years has included influencer and brand collaborations which Cooley says will remain a “critical component” of its marketing moving forward. Over the past couple of years, Crocs has partnered with music superstars such as Justin Bieber, Bad Bunny and Diplo. Crocs has also linked with luxury fashion brand Balenciaga for many years, launching its Crocs Pools sandal during the design house’s spring 2022 runway show.
Metaverse and digital channels
Cooley also said a “majority” of the brand’s ad investments go into digital channels.
“We believe that it really enables us to create more meaningful consumer communications,” Cooley said. “We [Crocs] actually do not have an awareness challenge. In countries all over the world, you can show [consumers] our iconic shoe and the consumer says ‘Those are Crocs.’ Our opportunity was relevance. So we believe the most effective way to create brand relevance is to do that through digital and social channels.”
Those digital channels include metaverse activations. Last year, Crocs launched a “Crocs World” in Minecraft and earlier this year Crocs launched an NFT collection.
“We believe that consumers will want to express themselves both in real life and in the metaverse and we will be a brand that’s enabling that today and in the future,” Cooley said.