Crocs Q3 revenue falls 6.2% as guidance points to softer Q4 2025

Core Insights - Crocs reported a consolidated revenue of $996 million for Q3 2025, a decrease of 6.2% from $1.06 billion in the same quarter last year [1] - The company's operating income fell by 23% to $208 million, leading to a reduction in operating margin from 25.4% to 20.8% [1] - Net income decreased to $145.8 million compared to $200 million in the previous year [1] - Gross margin contracted by 110 basis points to 58.5% from 59.6% year-on-year [1] Sales Performance - Direct-to-consumer (DTC) revenue increased by 1.6%, while wholesale revenue dropped by 14.7% [2] - Crocs-branded revenue declined by 2.5% to $836 million, with DTC sales rising by 2% to $472 million [2] - HEYDUDE brand revenue fell by 21.6% to $160 million, with DTC sales slipping by 0.5% [3] Regional Performance - North America revenue for Crocs decreased by 8.8% to $448 million, while international revenue increased by 5.8% to $389 million [3] Financial Actions and Future Guidance - The company repurchased 2.4 million shares for $203 million and reduced debt by $63 million during the quarter [4] - For Q4 2025, overall revenue is expected to be around 8% lower than the same period in 2024, with Crocs-branded revenue anticipated to decline by about 3% [4] - Capital expenditure for the full year 2025 is projected to be between $70 million and $75 million [4] Management Commentary - CEO Andrew Rees emphasized the company's strong profitability and cash flow, which facilitated share repurchases and debt reduction [5] - The company aims for $50 million in gross cost savings in 2025 and has identified an additional $100 million in potential savings for 2026 [6]