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Crocs’ H2 Revenues Will Be Hindered by Inventory Levels

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Expected product shortages for the remainder of the year are deliberate, Crocs said. The Niwot, CO-based firm dramatically cut summer delivery orders in March and sold through more units (16.3 million) than projected, realizing a 10 percent increase in average selling price ($20.29) in the second quarter.

“While we are reacting to shortages in core inventory, we feel it is more important to keep inventory lean and turn up the majority of our focus to 2021,” President and CEO Andrew Rees told analysts last week.

Crocs’ e-commerce combined with that of its e-tail partners represented more than 50 percent of the brand’s second-quarter revenues. U.S. sales rose in the high single digits despite stores being closed for half of the period as conversion and average transaction value rose. Store comps increased 18 percent despite softness in tourist markets such as Orlando and Hawaii.

“I actually think that the pandemic and how the consumer is trending puts us in an even stronger position than we might have thought we were in before,” Rees said. “I think it’s pushing the consumer to a very casual place. They are looking for comfort. They are looking for value. They are looking for great storytelling. They are looking for personalization and inspiration.”