HEYDUDE's Growth Potential and Expansion Plans Revealed
2023-08-01
In the recent earnings call meeting, the Director and CEO of HEYDUDE discussed the company's plans to address ERP and capacity constraint issues, as well as opportunities for expansion and financial performance.
The most important topic discussed in the meeting was the company's plan to address HEYDUDE's ERP and capacity constraint issues. The company plans to transition to a new ERP and warehouse system by the end of the year, which is expected to address constraints, reduce costs, and provide more flexibility for growth.
The single most interesting topic discussed in this meeting is the growth opportunities for the HEYDUDE brand. The company acknowledges that they have not had as much success with HEYDUDE compared to their other brand, Crocs. However, they remain optimistic about future growth opportunities for HEYDUDE. These opportunities include expanding into new territories, targeting new customers, and introducing new product silhouettes.
One key aspect of this growth strategy is the focus on direct-to-consumer (DTC) revenue. The company reports a 29.7% growth in DTC, which includes e-commerce and retail clearance stores. However, there was a question raised about comparing this growth to the previous quarter, where the company reported 40% growth. The company clarifies that the 40% growth was only for March and not a fair comparison.
The company is actively working towards improving the performance of the HEYDUDE brand and sees significant growth potential beyond this year. The CEO is confident in the long-term potential of the brand and is focused on managing it for ultimate success.
The market outlook for the company appears positive. The company is making changes to its policy for wholesale customers selling on Amazon and plans to further restrict their rights to sell on their own platforms. This aligns with their approach for larger wholesale customers. The CEO highlights new product introductions, strong marketing support, collaborations, and diversification as drivers for the brand in North America.
The key drivers of the business are the company's digital business and partner-operated stores. The company expects growth to come from its digital business, which includes platforms like Tmall, JD, and Chinese TikTok. They also anticipate growth from partner-operated stores, which have been performing well and generating significant profits. China is a significant driver of growth for the company, with expectations for it to grow to about 10% of the company's revenue base.
The company's plans for its product/service include making investments in sales, general, and administrative expenses, talent, and marketing. They also plan to make changes to their policy for wholesale customers reselling on Amazon and constrict their rights to sell on their own websites. Additionally, the company plans to continue diversifying its product offerings, particularly in the Clogs, sandal, and Jibbets categories.
The competitive landscape is evolving for HEYDUDE due to their policy changes regarding reselling on Amazon. The company has terminated customers who were primarily buying goods to sell on Amazon and has a policy that prohibits selling on the platform. HEYDUDE plans to further restrict wholesale customers' rights to sell on their own websites, aligning with the policy of Crocs. The aim is to tighten control over digital sales.
Based on the information provided, the specific Key Performance Indicators (KPIs) discussed in the meeting were not explicitly mentioned. However, the meeting did highlight the company's plans to address ERP and capacity constraint issues, with a transition to a new ERP system and warehouse at the end of the year.
The company's progress on strategic initiatives includes the planned transition to a new Enterprise Resource Planning (ERP) system and warehouse, which is expected to address constraints, reduce costs, and provide more flexibility for growth.
In conclusion, HEYDUDE is actively working towards addressing ERP and capacity constraint issues while also focusing on growth opportunities for the brand. The company is optimistic about future growth and is making changes to its policies to align with its long-term strategy. With a focus on digital business and partner-operated stores, HEYDUDE aims to drive growth and expand its presence in both North America and China.