Stock Groups

Here’s how Crocs avoided some of the pain of supply chain issues


Boston Globe | Boston Globe | Getty Images

The global supply chain chaos is making it difficult for retailers to sell shoes, as well as departmental stores and other retail outlets. threating their performance this holiday season

However CrocsIt has developed a strategy to help it manage the crisis and minimize its impact. Wall Street expectations were beaten by the company’s third quarter earnings and sales on Thursday. Crocs hiked its full-year revenue outlook. Crocs stock shot up after the news; Crocs was just up 7%.

Chief Executive Andrew Rees explained on an earnings call a key advantage is the fact that the retailer’s clog shoes are easy to make, and so the company faces fewer hurdles in shifting production around, when needed.

Our shoes are very simple and easy to use. [swapping]Ress said factories are very fast. Ress explained that the classic clog contains three components. Two of them are produced on-site so there is no need for external logistics. Our capabilities in rapid manufacturing are well-known.

Crocs began diversifying its manufacturing abroad quickly, particularly in the case of Crocs. with facilities in Vietnam facing prolonged shutdownsbecause of pandemic lockdowns within the region. The company stated that it had moved production to China and Bosnia in the immediate term. It is increasing its production in Indonesia. A facility in India will also be available by next year.

Vietnam is a major source of Crocs manufacturing. The company stated that it would contribute about 70% to production by the end this year. However, its share will decline due to Crocs’ diversification efforts.

According to Ress., almost all of the Vietnamese factories of the retailer are back in operation as of today. Ress said that workers are returning to the plants “pretty efficiently”. Ress added that Crocs was still planning to create an “on again, off again” situation in the area.

In the interim, avoid massive logjams at West Coast portsAccording to the company, it is expanding its presence on the East Coast in order to better reach customers in America. Crocs is also using air freight rather than cargo transport to ship orders for the spring and summer next year.

Ress declared, “We will prioritise the most important channels.”

Crocs expects to experience inflation in the next year due to a rise in freight costs and wages. Crocs has increased some of its clog shoe prices. Inflationary pressures can be balanced by reducing promotions.

Anne Mehlman Chief Financial Officer stated to analysts that they are proactively looking into other options and ways of reducing inflationary pressures.

Crocs shares rose more than 140% in the past year. Crocs shares have a market value of $9.3 Billion.

Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.