Crocs Beats Q1 Forecasts, Withdraws Guidance on Tariff Uncertainty
Crocs Inc. bested Wall Street’s first quarter expectations, but its Hey Dude brand continues to struggle.
“Both our Crocs and Hey Dude brands contributed to the outperformance with gross margins, operating margins, adjusted earnings per share, and cash flow coming in above plan,” said CEO Andrew Rees in a statement.
He added that the company is “pleased by the performance of our overall business in April,” but that the new global trade environment has created business and consumer uncertainty that makes it challenging to predict how shoppers will respond in the future. But he also emphasized that the company has a “proven track record of coming out of periods of uncertainty stronger than when we entered them.”
Rees also said the the casual footwear firm has the opportunity to gain market share as it focuses on what it “can control and lean into our competitive advantages.”
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For the three months ended March 31, net income rose 5.0 percent to $2.83 a diluted share, from net income of $152.5 million, or $2.50 in the same year-ago quarter. On an adjusted basis, diluted earnings per share were $3.00.
Revenues for the period slipped 0.1 percent to $937.3 million from $938.6 million. Direct-to-consumer (DTC) revenues grew 2.3 percent, while wholesale revenues decreased by 1.6 percent.
Wall Street was expecting adjusted diluted earnings per share of $2.49, on revenue of $907.9 million.
By brand, Crocs revenues were up 2.4 percent to $762 million, which included a 1.1 percent increase in DTC revenues to $285 million and a 3.2 percent rise in wholesale sales to $477 million. North American revenues slipped 3.8 percent to $369 million, while international revenues rose 8.9 percent to $393 million.
At Hey Dude, revenues fell 9.8 percent to $176 million. DTC revenues rose 8.3 percent to $65 million, while wholesale revenues fell 17.9 percent to $111 million.
The company said its gross margin was 57.8 percent versus 55.6 percent a year ago.
Like many other companies, Crocs withdrew its prior financial guidance for 2025 due to macroeconomic uncertainties connected to global trade policies.
Rees said the company completed $61 million in share repurchases in the quarter.
Crocs continues to be a favorite among celebrities such as Priyanka Chopra, Post Malone and Lil Nas X, but a Piper Sandler survey noted that upper income teens appear to be favoring other brands, such as Ugg. The company in December signed a licensing deal with Concept One to build its accessories offerings as it tries to evolve into a lifestyle brand. UBS analyst said Crocs could benefit from the trend in sports footwear growth, which includes casual shoes. Crocs is also keeping tabs on what consumers want, and has introduced a sneaker-sandal hybrid for the trail via is new Exp line.
