Crocs(CROX) Prnewswire·2025-02-20 14:46Core Viewpoint - Faruqi & Faruqi, LLP is investigating potential claims against Crocs, Inc. related to alleged violations of federal securities laws, particularly concerning misleading statements about the sustainability of HEYDUDE's revenue growth and the impact of inventory management on financial results [2][4]. Group 1: Company Overview - Crocs, Inc. completed the acquisition of HEYDUDE in February 2022, with HEYDUDE accounting for approximately 25% of Crocs' total revenues in 2022 [5]. - The company reports HEYDUDE sales in two segments: direct-to-consumer (DTC) and wholesale sales [5]. Group 2: Allegations and Financial Impact - The complaint alleges that Crocs and its executives made false or misleading statements regarding HEYDUDE's revenue growth, which was largely driven by stocking third-party wholesalers rather than actual retail sales [4][6]. - Following the revelation of the overstocking issue, Crocs' stock price declined significantly, dropping nearly 16% on April 27, 2023, and nearly 15% on July 27, 2023, after guidance was lowered [7][9]. - On November 2, 2023, Crocs reported a 19.4% decline in HEYDUDE's wholesale revenues, leading to further reductions in revenue growth guidance from 14%-18% to 4%-6% [10][11]. Group 3: Recent Developments - On October 29, 2024, Crocs disclosed that HEYDUDE's revenues fell below expectations, attributing struggles to excess inventories and acknowledging that too much product was shipped in 2022 [12]. - This announcement resulted in a stock price decline of approximately 19.2% on October 29, 2024 [13].