HEYDUDE, the casual footwear brand that Crocs, Inc. (NASDAQ: CROX ) acquired for $2.5B in early ’22, has struggled to increase revenues since ’23. Management kept reducing FY guidance every quarter for two years straight, which weighed heavily on the stock's performance. I have discussed some ofI am an experienced investor with a generalist approach to the markets, but over the years, I have developed particular expertise in several key sectors. My investment philosophy is rooted in identifying stocks with ...

Investors who choose to actively manage their portfolios, picking individual businesses in the process, probably want to beat the market over the long term. To achieve this goal, perhaps it's a good idea to look at past winners. Maybe the good times will continue.Artificial intelligence might be getting all the attention. However, there's one booming footwear stock that has skyrocketed 465% in the past five years (as of May 14). That kind of stellar performance deserves a closer look.Is this the smartest st ...

Limited-edition collection debuts glow-in-the-dark Echo Wave and a convertible G-SHOCK timepiece DOVER, N.J., May 13, 2025 /PRNewswire/ -- Today, Casio America, Inc. is excited to announce a first-of-its-kind collaboration between G-SHOCK, the brand known for its uncompromising toughness, and global footwear icon Crocs. Together, the two cultural powerhouses introduce a limited-edition collection that blends rugged utility with street-ready design, pushing the boundaries of self-expression and functional fa ...

Core Insights - Crocs is experiencing faster-than-expected growth in 2025, alleviating some investor concerns regarding tariff impacts on profitability [1] Company Performance - Management provided insights into the potential impact of tariffs, suggesting that the financial effects may not be as significant as previously feared [1]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________________________________ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Delaware 20-2164234 (I.R.S. Employer Identification No.) 500 Eldorado Blvd., Building 5, Broomfield, Colorado 80021 For the quarterly period ended March 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For ...

Core Insights - Crocs, Inc. reported strong first-quarter 2025 results, with revenues and earnings surpassing the Zacks Consensus Estimate, driven by effective execution across Crocs and HEYDUDE brands, disciplined cost management, resilient consumer demand, and strategic pricing [1][2] Financial Performance - Adjusted earnings per share were $3.00, beating the Zacks Consensus Estimate of $2.51, remaining nearly flat year over year [4] - Consolidated revenues were flat year over year at $937 million, exceeding the Zacks Consensus Estimate of $910 million; on a constant-currency basis, revenues improved by 1.4% [4] - Direct-to-consumer (DTC) revenues increased by 2.3%, while wholesale revenues fell by 1.6%; on a constant-currency basis, DTC revenues jumped by 3.5% and wholesale revenues were flat [4] Brand Performance - Revenues for the Crocs brand grew by 2.4% year over year to $762 million, with a 1.1% increase in DTC revenues and a 3.2% rise in wholesale revenues; on a constant-currency basis, revenues improved by 4.2% [5] - HEYDUDE brand revenues rose by 9.8% year over year to $176 million, with a 17.9% decrease in wholesale revenues offset by an 8.3% increase in DTC revenues; on a constant-currency basis, revenues improved by 9.5% [6] Profitability Metrics - Adjusted gross profit rose by 3% year over year to $541.5 million, with adjusted gross margin expanding by 180 basis points to 57.8% [7] - Adjusted selling, general and administrative (SG&A) expenses increased by 520 basis points to 34% of revenues; adjusted operating income fell by 12.5% year over year to $255 million, with adjusted operating margin contracting by 330 basis points to 23.8% [7] Financial Position - At the end of Q1 2025, the company had cash and cash equivalents of $166.5 million, long-term borrowings of $1.48 billion, and stockholders' equity of $1.97 billion [8] - The company borrowed $130 million in debt during the quarter and repurchased 0.6 million shares for $61 million, with $1.3 billion of share repurchase authorization available for future repurchases [9] Outlook - Due to ongoing macroeconomic uncertainty, the company has withdrawn its 2025 financial guidance and will not issue an updated full-year outlook at this time [10]

Core Insights - Crocs reported revenue of $937.33 million for Q1 2025, a slight year-over-year decline of 0.1%, with EPS at $3.00 compared to $3.02 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $909.56 million by 3.05%, and the EPS surpassed the consensus estimate of $2.51 by 19.52% [1] Revenue Breakdown - Crocs Brand revenue was $761.61 million, exceeding the average estimate of $744.37 million, reflecting a year-over-year increase of 2.4% [4] - HEYDUDE Brand revenue was $175.73 million, below the average estimate of $166.55 million, showing a year-over-year decline of 9.8% [4] - Direct-to-Consumer revenue for Crocs Brand was $284.80 million, slightly above the estimate of $279.37 million [4] - HEYDUDE Brand Direct-to-Consumer revenue reached $65.03 million, surpassing the estimate of $61.63 million [4] - Wholesale revenue for Crocs Brand was $476.80 million, exceeding the estimate of $467.14 million [4] - HEYDUDE Brand Wholesale revenue was $110.69 million, above the estimate of $105.40 million [4] Margin Analysis - Non-GAAP Gross Margin for HEYDUDE Brand was 46.6%, lower than the estimated 47.9% [4] - Non-GAAP Gross Margin for Crocs Brand was 60.7%, higher than the estimated 58.3% [4] Stock Performance - Crocs shares returned +1.2% over the past month, underperforming the Zacks S&P 500 composite's +11.3% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance in the near term [3]

Financial Data and Key Metrics Changes - The company reported enterprise revenues of $937 million, a 1% increase compared to the prior year, exceeding guidance which anticipated a decline of approximately 1.5% [5][25] - Adjusted gross margins improved to 57.8%, up 180 basis points year-over-year, while adjusted operating margins were 23.8%, exceeding guidance by over 200 basis points [6][27] - Adjusted diluted earnings per share were $3, nearly 20% above the high end of the guidance range [7][29] Business Line Data and Key Metrics Changes - Crocs brand revenues reached $762 million, a 4% increase year-over-year, driven by double-digit growth in international markets [6][26] - Hey Dude brand revenues were $176 million, down 10% year-over-year, but better than the anticipated decline of 14% to 16% [27] - Direct-to-consumer (DTC) sales for Hey Dude grew by 8%, indicating an acceleration from the previous quarter [27] Market Data and Key Metrics Changes - International revenue for Crocs increased by 12%, with China showing over 30% growth compared to the prior year [26][18] - North American revenue for Crocs was down 3% year-over-year, which was better than expected [26][19] - The company noted robust growth in Western Europe, particularly in France and Germany [26][19] Company Strategy and Development Direction - The company is focused on maintaining competitive advantages and adapting to a volatile macroeconomic environment, including managing sourcing and cost structures [8][12] - Strategic investments are being made to enhance brand relevance and expand product offerings beyond clogs, particularly in sandals [14][15] - The company is committed to a digitally led marketing strategy, leveraging social commerce and influencer partnerships to drive brand engagement [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the unpredictability of global trade policies and their potential impact on business operations, leading to the withdrawal of full-year guidance [10][30] - The company is proactively identifying cost savings of approximately $50 million for 2025 and managing inventory levels carefully [11][34] - Despite uncertainties, management remains confident in the company's ability to generate significant free cash flow and maintain profitability [12][29] Other Important Information - The company has a diversified sourcing mix, with 47% of products anticipated to come from Vietnam in 2025, and is actively adjusting sourcing strategies in response to tariff changes [9][10] - The company repurchased 607,000 shares during the quarter, maintaining a strong liquidity position with $166 million in cash and $679 million in borrowing capacity [29][30] Q&A Session Summary Question: Can you comment on the sustainability of gross margins? - Management indicated that gross margins are sustainable due to effective vendor negotiations, investments in logistics, and favorable customer mix [40][41] Question: What is the strategy regarding pricing in light of potential cost increases? - Management acknowledged pricing as a lever to mitigate costs, with a strategic approach to potential price increases across channels [43] Question: Can you provide insights on Q2 revenue guidance? - Management expressed satisfaction with April's performance but emphasized caution due to the unpredictable global trade environment [48][49] Question: How are you planning to mitigate the potential impact of tariffs? - Management outlined a diversified sourcing strategy and indicated that they would cancel orders if tariffs remain high, rather than incur losses [50][51] Question: What is the approach to marketing spend in 2025? - Management plans to maintain marketing investments to engage consumers, despite the uncertain environment [55] Question: How is the company managing wholesale versus DTC pricing? - Management stated that while DTC pricing can be adjusted, they prefer coordinated pricing changes across channels [89][90] Question: What are the drivers for international growth? - Management highlighted brand penetration as a key driver, with significant focus on markets like China and India [78][80]

Financial Data and Key Metrics Changes - The company reported enterprise revenues of $937 million, a 1% increase compared to the prior year, exceeding guidance which anticipated a decline of approximately 1.5% [4][24] - Adjusted gross margins improved to 57.8%, gaining 180 basis points year-over-year, while adjusted operating margins were 23.8%, exceeding guidance by over 200 basis points [5][26] - Adjusted diluted earnings per share reached $3, nearly 20% above the high end of the guidance range [6][28] Business Line Data and Key Metrics Changes - Crocs brand revenues were $762 million, up 4% year-over-year, driven by a 5% increase in wholesale and a 3% increase in direct-to-consumer (DTC) sales [25] - Hey Dude brand revenues declined by 10% to $176 million, but DTC sales grew by 8%, indicating a recovery from previous quarters [26] - Adjusted gross margin for the Crocs brand was 60.7%, up 260 basis points, while Hey Dude's adjusted gross margin was 46.6%, down 120 basis points due to supply chain cost pressures [27] Market Data and Key Metrics Changes - International revenue grew by 12%, with China showing over 30% growth compared to the prior year, supported by the addition of 40 new partner doors [17][25] - North American revenue was down 3% year-over-year, but performance exceeded expectations [19][25] - Western Europe also saw robust growth, particularly in France and Germany [25][78] Company Strategy and Development Direction - The company is focused on maintaining competitive advantages and adapting to a volatile macroeconomic environment, including managing sourcing and cost structures in response to tariffs [6][10] - Strategic investments are being made to enhance brand relevance and expand product offerings beyond clogs, particularly in sandals [12][13] - The company aims to leverage social commerce and digital marketing to drive brand engagement and sales [16][15] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the unpredictability of the global trade environment and its potential impact on consumer demand [10][48] - The decision to withdraw guidance for 2025 was primarily due to the difficulty in predicting the financial impact of tariffs [29][30] - Despite challenges, management remains optimistic about the company's ability to generate significant free cash flow and maintain profitability [11][28] Other Important Information - The company identified an additional $50 million in cost savings for 2025 and is actively managing inventory levels [10][32] - The liquidity position is strong, with $166 million in cash and $679 million in borrowing capacity [28] Q&A Session Summary Question: Comments on sustainability of gross margins and pricing opportunities - Management indicated confidence in the sustainability of gross margins due to vendor negotiations and improved efficiencies, while also acknowledging pricing as a lever to mitigate costs [36][39][41] Question: Thoughts on not guiding Q2 revenue and mitigation strategies - Management noted strong performance in April but emphasized caution in predicting future trends due to the uncertain global trade environment [45][48][49] Question: Level of marketing spend in 2025 - The company plans to maintain elevated marketing spending to engage consumers, despite the uncertain backdrop [53][54] Question: Drivers for Crocs international growth - Management highlighted brand penetration as a key driver, with significant growth opportunities in China, India, and Western Europe [75][78] Question: Impact of price increases on wholesale and DTC channels - Management stated that while they have flexibility in DTC pricing, they prefer coordinated pricing strategies across channels [84][86] Question: Current state of wholesale channel and inventory management - Management confirmed that major retailers are planning conservatively, aligning with the company's strategy to avoid excess inventory [90][91]

Financial Performance - Crocs Inc Q1 2025 revenues reached $937 million, a 1% increase compared to the previous year[31] - Crocs brand revenues increased by 4% to $762 million, while HEYDUDE brand revenues decreased by 10% to $176 million[31] - Adjusted gross margin for Crocs Inc was 578%, a 180 basis points increase year-over-year[31] - Adjusted operating income was $223 million, a 12% decrease year-over-year, with an adjusted operating margin of 238%, a 330 basis points decrease[31] - Adjusted diluted EPS was $300[30] Brand Performance - Crocs brand direct-to-consumer revenue was $285 million, a 3% increase, and wholesale revenue was $477 million, a 5% increase[32] - Crocs brand international revenue grew by 12%, driven by China which was up over 30%[34] - HEYDUDE brand direct-to-consumer revenue was $65 million, an 8% increase, while wholesale revenue was $111 million, a 17% decrease[36] Strategic Decisions - The company repurchased $61 million in shares[5] - Due to macroeconomic uncertainties, the company withdrew its full-year 2025 financial outlook[6, 22] - The company has a buyback authorization of $13 billion[27]