In a significant financial move, Crocs , Inc. (NASDAQ:CROX), a $6.6 billion market cap company, has expanded its borrowing capacity. The footwear company announced on Monday that it has amended its credit agreement to increase its senior revolving credit facility by $250 million, bringing the total commitments to $1 billion.
This amendment, referred to as the Sixth Amendment, modifies the Second Amended and Restated Credit Agreement dated July 26, 2019. In addition to the increased credit line, Crocs now has the option to further boost its total commitments by up to an additional $400 million, subject to certain conditions.
The amendments made do not introduce substantial changes to the financial covenants or interest rates on outstanding borrowings under the Credit Agreement. This strategic financial restructuring is aimed at providing Crocs with a more robust financial foundation for its operations and future growth initiatives.
As of the latest update, there have been no material impacts on Crocs' stock performance following the announcement. The company's shares continue to be traded on The Nasdaq Global Select Market under the ticker symbol CROX.
In other recent news, Crocs, Inc. reported a moderate increase in its third quarter 2024 earnings, with consolidated revenues reaching $1.1 billion, marking a 2% year-over-year rise. The company's direct-to-consumer sales saw a 5% boost, while the Crocs brand enjoyed an 8% rise in revenue. However, the subsidiary brand, HEYDUDE, encountered a dip in revenue. Despite these challenges, adjusted earnings per share improved, and the company maintains a positive outlook.
Needham initiated coverage on Crocs with a Buy rating and a price target of $116.00, citing the company's international brand growth, strong free cash flow, and strategic capital allocation. In contrast, Loop Capital downgraded Crocs' stock from Buy to Hold and reduced the price target to $110 due to concerns over current sales trajectory and the challenges faced by HEYDUDE.
In light of these developments, Crocs adjusted its full-year revenue growth guidance for 2024 to approximately 3%. The company continues to invest in talent, with the hiring of Terence Reilly as the new Hey Dude president and the appointment of Steven Smith as Head of Creative Innovation.
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