Crocs, Inc. Reports Better-Than-Expected First Quarter Results Fueled by Outperformance in Both Crocs and HEYDUDE Brands

Core Insights - Crocs, Inc. reported better-than-expected first quarter 2025 performance despite a volatile macroeconomic environment, with contributions from both Crocs and HEYDUDE brands leading to strong gross margins, operating margins, adjusted earnings per share, and cash flow [2][3] - The company has withdrawn its 2025 financial guidance due to uncertainties in the global trade environment and consumer behavior [3][8] Financial Performance - Consolidated revenues for Q1 2025 were $937 million, approximately flat compared to the previous year, with a 1.4% increase on a constant currency basis [7] - Direct-to-consumer (DTC) revenues grew by 2.3%, or 3.5% on a constant currency basis, while wholesale revenues contracted by 1.6% [7] - Gross margin improved to 57.8% from 55.6%, with adjusted gross margin increasing by 180 basis points to 57.8% [7] - Selling, general, and administrative expenses (SG&A) rose by 7.8% to $319 million, representing 34.0% of revenues, compared to 31.5% in the previous year [7] - Income from operations decreased by 1.5% to $223 million, resulting in an operating margin of 23.8% [7] - Diluted earnings per share increased by 13.2% to $2.83, while adjusted diluted earnings per share remained approximately flat at $3.00 [7] Brand Performance - Crocs brand revenues increased by 2.4% to $762 million, or 4.2% on a constant currency basis, with DTC revenues up by 1.1% and wholesale revenues up by 3.2% [7] - HEYDUDE brand revenues decreased by 9.8% to $176 million, with DTC revenues increasing by 8.3% but wholesale revenues declining by 17.9% [7] Balance Sheet and Cash Flow - Cash and cash equivalents were $166 million, up from $159 million, while inventories were slightly down at $391 million compared to $392 million [7] - Total borrowings decreased to $1.482 billion from $1.727 billion [7] - The company repurchased approximately 0.6 million shares for $61 million during the quarter, with $1.3 billion remaining in share repurchase authorization [7] Market Outlook - The CEO expressed confidence in the company's ability to navigate periods of uncertainty and emphasized the potential to gain market share by focusing on controllable factors and competitive advantages [2][3]