Crocs, Inc. shares surged nearly 20 percent on Thursday morning after the company reported its fourth quarter results, besting analyst estimates and announcing a potential turn around at HeyDude as sales for the quarter came in flat year-over-year.

Consolidated 2024 fourth-quarter revenues increased 3.1 percent to $990 million, or an increase of 3.8 percent on a constant-currency (cc) basis, compared to the prior-year Q4 period.

  • Direct-to-consumer (DTC) revenues grew 5.5 percent (+6.1 percent cc) year-over-year.
  • Wholesale revenues contracted 0.2 percent or grew 0.7 percent on a constant-currency basis.

Crocs Brand
Crocs Brand revenues increased 4.0 percent (+4.9 percent cc) to $762 million in the quarter.

  • Crocs Brand DTC revenues increased 5.0 percent (+5.7 percent cc) to $447 million.
  • Crocs Brand Wholesale revenues increased 2.7 percent (+3.8 percent cc) to $315 million.
  • Crocs Brand North America revenues were flat at $471 million for the quarter.
  • Crocs Brand International revenues increased 11.5 percent (+13.7 percent cc) to $291 million.

HeyDude Brand
HeyDude Brand revenues were flat at $228 million in the fourth quarter.

  • HeyDude DTC revenues increased 7.2 percent to $133 million.
  • HeyDude Wholesale revenues decreased 8.6 percent to $95 million.

“Our fourth quarter performance exceeded expectations across all metrics led by Crocs Brand growth of 4 percent, as the North American business outperformed our plan and China growth accelerated from the third quarter. HeyDude revenue was flat to last year, higher than anticipated as direct-to-consumer sales inflected to growth,” commented Crocs, Inc. CEO Andrew Rees.

Fourth Quarter Income Statement Summary
Fourth quarter gross margin was 57.9 percent of revenues in Q4, compared to 55.3 percent of revenues in the prior-year Q4 period. Adjusted gross margin improved 220 basis points year-over-year to 57.9 percent of revenues.

Selling, general, and administrative expenses (SG&A) increased 16.1 percent to $373 million, or 37.7 percent of revenues, in the fourth quarter, compared to $321 million, or 33.5 percent of revenues, in Q4 2023.

Adjusted SG&A increased 23.0 percent to $373 million, or 37.7 percent of revenues in Q4, compared to $303 million, or 37.7 percent of revenues, in the 2023 Q4 period.

Income from operations decreased 4.6 percent to $200 million, or 20.2 percent of revenues, in Q4, compared to income from operations of $210 million, or 21.8 percent of revenues, in Q4 2023. Adjusted income from operations decreased 13.5 percent to $200 million, or 20.2 percent of revenues, compared to $231 million, or 24.1 percent of revenues, in the prior-year Q4 period.

Diluted earnings per share amounted to $6.36, a 52.9 percent year-over-year increase from $4.16 per diluted share in the prior year period. Adjusted diluted earnings per share of $2.52 decreased 2.3 percent from $2.58 per diluted share in Q4 2023, which excludes the current period tax impact of intra-entity transactions.

“We delivered another record year for Crocs, Inc., highlighted by revenue growth of 4 percent to $4.1 billion and adjusted earnings-per-share growth of 9 percent. We generated exceptional operating cash flow of approximately $990 million, which enabled us to return value to shareholders through more than $550 million in share repurchases while fortifying our balance sheet through the pay down of approximately $320 million of debt,” said Rees.

Year-End Balance Sheet and Cash Flow Summary

  • Cash and cash equivalents were $180 million at year-end compared to $149 million at 2023 year-end.
  • Inventories were $356 million at year-end compared to $385 million at 2023 year-end.
  • Total borrowings were $1,349 million at year-end compared to $1.66 billion at 2023 year-end.
  • Capital expenditures were $69 million at year-end compared to $116 million at 2023 year-end.

During the quarter, Croc, Inc. repaid $75 million of debt and repurchased approximately 2.0 million shares for $225 million at the average share price of $111.51. At year-end, $324 million of share repurchase authorization remained available for future repurchases. The Board subsequently approved a $1.0 billion increase to the company’s share repurchase authorization, after which approximately $1.3 billion remained available for future common stock repurchases.

Outlook

First Quarter 2025
For the first quarter of 2025, Crocs, Inc. expects:

  • Revenues to be down approximately 3.5 percent compared to the first quarter of 2024, at currency rates as of February 10, 2025, which includes an anticipated negative impact of approximately $19 million from foreign currency.
    • Crocs Brand to be down approximately 1 percent to flat compared to the first quarter of 2024.
    • HeyDude Brand to be down approximately 16 percent to 14 percent compared to the first quarter of 2024.
  • Adjusted operating margin of approximately 21.5 percent, including an anticipated negative impact of approximately 80 bps from both foreign currency and announced and pending tariffs.
  • Adjusted diluted earnings per share of $2.38 to $2.52. Adjusted diluted earnings per share guidance does not assume any impact from potential future share repurchases.

Full Year 2025
“For 2025, we are expecting another year of revenue growth, led by mid-single digit growth in the Crocs Brand,” added Rees. “We are pleased by the early signs of progress we made for HeyDude during the fourth quarter and are taking a prudent approach to how we shape 2025 guidance for HeyDude as we focus on reigniting the brand.”

For the full year 2025, Crocs, Inc. expects:

  • Revenue growth of approximately 2 percent to 2.5 percent compared to full year 2024, at currency rates as of February 10, 2025, includes an anticipated negative impact of approximately $62 million from foreign currency.
    • Crocs Brand to grow approximately 4.5 percent compared to full year 2024.
    • HeyDude Brand to be down approximately 9 percent to 7 percent compared to full year 2024.
  • Adjusted operating margin of approximately 24.0 percent, including an anticipated negative impact of approximately 60 bps from both foreign currency and announced and pending tariffs.
  • Combined GAAP tax rate of approximately 21.5 percent and non-GAAP effective tax rate of approximately 18.0 percent.
  • Adjusted diluted earnings per share of $12.70 to $13.15. Adjusted diluted earnings per share guidance does not assume any impact from potential future share repurchases.
  • Capital expenditures of $80 million to $100 million.

Image courtesy Crocs, Inc.