(Reuters) – Crocs (NASDAQ:) Inc has raised its lower end annual revenue forecast as it prepares for supply limitations by shifting production to Vietnam. This will help offset factory closures that have slowed shipments. The stock rose 12%.
This company is well-known for making rubber clogs. It announced on Thursday that it will move production from Vietnam, which has become an important manufacturing center for apparel companies, to China, Indonesia, and Bosnia.
Crocs was planning to have 70% of its production come from Vietnam by 2021. However, the company decided to reduce some output. However, the company didn’t say how much it would be moving from Vietnam.
Due to an influx of Delta variant cases that has hit supplies at major clothing companies, many factories in Vietnam have closed or been forced to close down since mid-July, there are now fewer workers in Vietnam’s manufacturing centers. Nike Inc (NYSE:), Abercrombie & Fitch and Adidas AG (DE:).
Nike warned about delays in the holiday season because of supply problems and stated that it will take many months for full production to be resumed in Vietnam where half of its shoes are made.
Crocs claimed that its shoe’s simplicity would allow it to rapidly ramp up production. It also said that there were no delays in port on the West coast of America and it would switch to East coast docks.
The company expects fiscal 2021 revenue to increase 62%-65%, which is an improvement on its previous forecast of a 60%-65% rise.
The third quarter revenue ended September 30th was 73% higher at $625.9million, surpassing analysts’ estimate of $610 million according to Refinitiv IBES. This is due to the company benefiting from lower prices and less discounts.
Fusion MediaFusion Media or any other person involved in the website will not be held responsible for any loss or damage resulting from reliance on this information, including charts, buy/sell signals, and data. Trading the financial markets is one of most risky investment options. Please make sure you are fully aware about the costs and risks involved.