Crocs (NasdaqGS:CROX) Q4 2025 Earnings call February 12, 2026 08:30 AM ET Company ParticipantsAndrew Rees - CEOAnna Andreeva - Managing DirectorAubrey Tianello - Equity ResearchBrooke Roach - Managing Director and Equity ResearchErinn Murphy - SVP, Investor Relations and StrategyJim Chartier - Director of ResearchPatraic Reagan - Financial ExecutivePeter McGoldrick - VP and Equity ResearchTom Nikic - Managing DirectorConference Call ParticipantsAdrienne Yih - Managing Director and Consumer Discretionary Ana ...

Crocs (NasdaqGS:CROX) Q4 2025 Earnings call February 12, 2026 08:30 AM ET Company ParticipantsAndrew Rees - CEOAnna Andreeva - Managing DirectorAubrey Tianello - Equity ResearchBrooke Roach - Managing Director and Equity ResearchErinn Murphy - SVP, Investor Relations and StrategyJim Chartier - Director of ResearchPatraic Reagan - Financial ExecutivePeter McGoldrick - VP and Equity ResearchTom Nikic - Managing DirectorConference Call ParticipantsAdrienne Yih - Managing Director and Consumer Discretionary Ana ...

Forward Looking Statement Investor Presentation 2025 This presentation includes estimates, projections, and statements relating to our business plans, commitments, objectives, and expected operating results that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements regardi ...

Core Insights - Crocs, Inc. (CROX) is expected to report fourth-quarter 2025 results on February 12, with revenue estimates at $916.6 million, reflecting a 7.4% decline year-over-year. Earnings per share are estimated at $1.91, indicating a 24.2% decrease from the previous year [1][3]. Financial Performance - The company has a trailing four-quarter earnings surprise average of 14.3%, with the last quarter's earnings exceeding estimates by 22.2% [2]. - Management projected a revenue decline of approximately 8% year-over-year, with Crocs brand revenues expected to drop around 3% and HEYDUDE brand revenues anticipated to fall mid-20% [5]. Operational Challenges - Crocs is facing a challenging operating environment, with margins pressured by increased expenses, tariffs, and higher selling, general and administrative (SG&A) costs [3][9]. - The HEYDUDE brand has been experiencing weak trends, with revenue estimates for the quarter at $175 million, down about 23% year-over-year due to cautious consumer behavior and wholesale channel pressures [4][9]. Brand Performance - Despite challenges, Crocs has seen strength in its core products, including clogs, sandals, and personalization offerings, which may help cushion overall performance [6][9]. - The Jibbitz business has also shown encouraging results, contributing positively to the company's performance [6]. Valuation - Crocs is currently trading at a forward 12-month price-to-earnings ratio of 6.83x, significantly below its five-year high of 25.08x and the industry average of 16.16x, indicating an attractive investment opportunity [10]. - The company's shares have increased by 12.1% over the past six months, contrasting with a 2.7% decline in the industry [10].

Core Insights - Crocs, Inc. has evolved from a functional niche brand to a culturally relevant lifestyle brand, focusing on sustainable and profitable growth through brand building, product innovation, and go-to-market strategies [1] Financial Performance - Crocs shares have increased by 11.3% over the past three months, outperforming the Zacks Textile - Apparel industry's decline of 0.5% and the broader Consumer Discretionary sector's decline of 7.8% [2] Product and Market Strategy - The company is experiencing growth in core categories such as clogs and sandals, as well as in personalization products like Jibbitz, with strong performance across digital and retail channels [3] - Crocs is refreshing its product lines with updated materials and comfort features while introducing new offerings in sandals, boots, and seasonal footwear [3] - Innovations like the Echo and In-Motion franchises are contributing to brand strength, allowing Crocs to maintain pricing discipline and protect margins [4] Direct-to-Consumer Growth - The direct-to-consumer (DTC) channel is a significant growth driver, with a balanced mix of DTC and wholesale channels enhancing brand engagement and distribution efficiency [5] - Investments in digital platforms and data analytics have improved inventory management and marketing effectiveness [5] Challenges and Brand Refresh - The HEYDUDE brand is currently facing challenges due to a cautious U.S. consumer and elevated tariffs, but product refreshes are underway to restore momentum [6] - The brand is undergoing a reset in North America, focusing on inventory management and performance marketing adjustments to enhance profitability [6] Earnings Estimates - Positive earnings estimate revisions have been noted, with the Zacks Consensus Estimate for Crocs' earnings per share (EPS) projected at $12.13 for the current year and $12.60 for the next year, reflecting growth of 5% and 8.6% respectively [9]

Core Insights - Crocs, Inc. (CROX) is set to report third-quarter 2025 results on October 30, with revenue expectations of $965.1 million, reflecting a 9.1% decline year-over-year. Earnings per share are estimated at $2.37, down 34.2% from the previous year [1][3]. Financial Performance - The company has a trailing four-quarter earnings surprise average of 12.5%, with the last quarter exceeding estimates by 5.5% [2]. - The consensus estimate for direct-to-consumer (DTC) revenues is $507 million for the third quarter, indicating growth despite overall brand challenges [6]. Brand and Market Dynamics - Crocs' HEYDUDE brand is experiencing persistent softness due to cautious U.S. consumer behavior, elevated tariffs, and pressures in the wholesale channel [3][9]. - The company anticipates a sales decline of 9-11%, influenced by marketplace cleanups, reduced wholesale volumes, and increased input costs [4]. Operational Challenges - Increased investments in talent, marketing, and DTC expansion, along with higher selling, general and administrative (SG&A) expenses, are impacting operating leverage [5]. - The company expects an adjusted operating margin of 18-19%, with a negative impact of approximately 170 basis points from tariffs [5]. Valuation Perspective - Crocs is trading at a forward 12-month price-to-earnings ratio of 7.26x, below its five-year high of 26.17x and the industry average of 16.95x, presenting an attractive investment opportunity [10]. - The stock has declined by 13.9% over the past six months, compared to a 5.6% drop in the industry [10].

Core Thesis - Crocs, Inc. is viewed positively due to its asset-light model, high margins, and significant cash generation potential, with shares trading below intrinsic value estimates of $140–$175 per share [4][5]. Financial Performance - As of September 23rd, Crocs' share price was $78.15, with trailing and forward P/E ratios of 21.24 and 8.58, respectively [1]. - The company generated $992.5 million in operating cash flow and approximately $923 million in free cash flow in 2024, achieving a return on invested capital (ROIC) of around 27% [3]. - Crocs maintains a manageable balance sheet with net debt of approximately $1.2 billion, actively reducing this through buybacks and selective debt paydowns [3]. Business Model and Strategy - Crocs operates as a global footwear brand with a focus on high-margin products, primarily through its core clogs and the HEYDUDE brand, with direct-to-consumer (DTC) sales accounting for roughly 50% of 2024 revenue [2]. - The company benefits from superior gross margins of 58.8% and operating margins of 24.9%, driven by improved pricing control and low SKU complexity [2]. - Growth strategies include simple product architecture, viral collaborations, and international expansion, with HEYDUDE integration aimed at replicating Crocs' disciplined margin and inventory management [3]. Market Position and Valuation - The stock is currently trading at approximately $77, which is below its estimated intrinsic value, presenting an asymmetric risk/reward profile [4]. - The company emphasizes long-term operating margins around 24% and prioritizes capital allocation towards share repurchases and deleveraging over dividends [3]. Risks and Challenges - Near-term risks include fashion volatility, tariff exposure, and the necessity to maintain channel discipline as the DTC mix increases [4].

Market Trends & Competition - Nike's quarterly sales in China decreased by 17% year-over-year, indicating challenges for some American brands [1] - Anti-American sentiment and tough local competition are impacting American brands in China [1] Company Performance (Crocs) - Crocs' revenue in China increased by over 30% in the most recent quarter, contrasting with a 6.5% decline in North America revenue [1] - Crocs is successfully targeting China's Gen Z consumer segment [2] Marketing & Localization Strategies - Crocs adapted its global slogan "Come As You Are" to "Just match my vibes" and "born to be free" to resonate with young Chinese consumers [2][3] - Crocs utilizes Jibbitz to enable young consumers to personalize their shoes and express their identity [4][5] - Crocs avoids overt American symbols in its stores and uses local celebrity endorsers like Bai Lu [6] - Crocs collaborates with Chinese designers like Feng Chen Wang and streetwear brands like Melting Sadness to cater to local tastes [8] - Crocs is following the example of brands like McDonald's and KFC by embracing local tastes and understanding Chinese consumer preferences [9] Expansion & Future Outlook - Yum China, which owns KFC, plans to operate 20,000 food and beverage outlets by the end of next year, highlighting the growth potential in the Chinese market [10] - Brands need to understand and adapt to the fast-paced Chinese market to succeed [11]

Summary of Crocs (CROX) 2025 Conference Call Company Overview - Crocs operates a multi-brand portfolio, with the Crocs brand selling over 25 million pairs globally each year, and the Hey Dude brand also selling over 25 million pairs annually [2][6] Core Points and Arguments Resilience and Diversification - Crocs demonstrates resilience in a dynamic consumer environment due to brand diversification (Crocs and Hey Dude) and sourcing across multiple countries, mitigating tariff and sourcing risks [5][6] - The company has a strong financial performance over the last five years, with robust sales growth, profitability, and cash flow, allowing for continued investment in growth despite headwinds [7][10] Cost Management - Management has proactively reduced SG&A costs by at least $50 million on a forward-looking basis to control expenses [8][41] - Inventory control is emphasized to avoid undesirable trade-offs for long-term brand success, with inventory turns exceeding 4x [8][9] Consumer Behavior and Market Trends - The consumer market is currently cautious, with casual footwear expenditures down mid-single digits in Q1, which is atypical for the footwear market [16] - Companies are passing price increases to consumers through various mechanisms, leading to a cautious consumer outlook [16][22] Pricing Strategy - Crocs plans to follow market leaders in implementing price increases, focusing on strategic product pricing rather than leading the charge [22][23] Growth Opportunities - The clog silhouette remains relevant in the U.S. market but is well-penetrated, with growth opportunities identified in international markets like China, India, and Southeast Asia [24][25][28] - Sandals and personalization (Jibbitz) are showing strong performance, with Jibbitz contributing about 8% of sales [25][26] International Expansion - Crocs has a 2.5% market share in the U.S. and is already at or above that in markets like the UK, South Korea, and Australia, while having significant penetration opportunities in larger markets [27][28] Social Commerce Success - Crocs is the number one brand on TikTok shop, indicating strong performance and high margins from social commerce, which is expected to continue driving sales [31][32][33] Hey Dude Brand Performance - Hey Dude has shown strong growth in DTC channels and outlet stores, with ongoing efforts to clean up wholesale inventory [35][36] - The brand remains profitable and is expected to have a strong growth runway ahead [38] Cash Flow and Financial Management - Cash generation is robust, with investments focused on growth drivers, distribution, logistics, and IT, while maintaining a strong balance sheet [44][48] - The company plans to continue stock buybacks and debt paydown, having executed $60 million in stock buybacks in Q1 [49] New Product Lines - The EXP line aims to cater to affluent markets with elevated products and innovative designs, including collaborations with luxury brands [50][51] Additional Important Points - Management emphasizes a long-term perspective on shareholder value creation, focusing on sustainable growth rather than short-term gains [10][40] - The company is cautious about the economic environment and is committed to maintaining high levels of profitability and gross margin [40][41]

Core Viewpoint - Crocs, Inc. is expected to report a decline in both revenue and earnings per share for the first quarter of 2025, with challenges stemming from the HEYDUDE brand and a volatile operating environment [1][2][3]. Financial Performance - The consensus estimate for revenues is $909.6 million, reflecting a 3.1% decrease from the previous year [1]. - Earnings per share are estimated at $2.51, indicating a 16.9% decline year-over-year [1]. - The company has a trailing four-quarter earnings surprise of 17.8% on average, with the last quarter surpassing estimates by 10.04% [2]. Brand Performance - The HEYDUDE brand is facing significant challenges, with expected revenue declines of 14-16% due to weak wholesale demand [4]. - The Crocs brand is projected to have flat to slightly down revenue performance, although international growth may provide some support [4]. - Direct-to-consumer (DTC) revenues are growing, but overall brand momentum is under pressure [2][5]. Market Conditions - Crocs anticipates a 3.5% year-over-year revenue decline, influenced by currency fluctuations, with a $19 million adverse impact from foreign currency [3]. - The North America business is expected to decline by mid-single digits, partially due to the timing shift of the Easter holiday [4]. Valuation - Crocs is trading at a forward 12-month price-to-earnings ratio of 7.11X, which is below both its five-year high of 34.18X and the industry average of 10.15X, indicating an attractive valuation opportunity [7]. Stock Performance - Over the past six months, Crocs' shares have decreased by 9.1%, contrasting with the industry growth of 17.6% [8].