Crocs, Inc. (CROX) shares were up in double digits in early trading today and surged more than 20 percent in midday trading after company CEO Andrew Rees and CFO Patraic Reagan walked Wall Street analysts through the fine points of the company’s fourth quarter, full year 2025 and a look ahead that had people talking positively about the direction the Broomfield, Colorado-based footwear company is taking.

Rees reminded the call participants that Crocs, Inc. surpassed the 20-year mark as a public company on February 8.

“Since our IPO, we’ve established ourselves as a world leader in innovative casual footwear for all,” he continued. “In addition to creating one of the greatest and most recognizable icons of our time, the Classic Clog, we have built a powerful and defensible business model that is increasingly diversified across brands, products, channels and geographies with distribution in over 85 countries.”

Knowing the early history of the Crocs business, both pre- and post-IPO when it was a Wild West show, the current sense of calm at the company is in sharp contrast to the type the news SGB Executive covered “back in the day.” at the upstart business. Anyone with a history in the outdoor or footwear markets has to give considerable credit to Andrew Rees for his steady hand – even if things aren’t perfect.

“In the last 20 years, we have relentlessly served our consumers, selling approximately 1.5 billion pairs of shoes while delivering 14 percent sales growth on a compound annual growth basis,” Rees added. “Our high margins and cash flow generation give us great flexibility to continue to invest in and grow our business while returning a considerable amount of cash to shareholders. Since our IPO, Crocs shares have generated a total shareholder return in excess of 700 percent, almost 2x that of the S&P 500 over the same period.”

Rees said that the digital, international and non-clog product categories each now represent a revenue stream in excess of $1.5 billion, which they see as compelling drivers for future growth.

“We will attack the next 20 years with ambition, decisiveness and agility and stay on the offense by leveraging our product innovation engine, our social disruptive marketing and multichannel distribution,” he said.

Consolidated 2025 Summary
Rees started his prepared remarks about the company’s current business in much the same way he did in an early morning earnings release, commenting that 2025 ended on a strong note with a better-than-expected Holiday quarter for the parent of the Crocs and HeyDude brands.

“We had a strong holiday season with positive consumer response to our new product introductions,” the CEO noted.

Full-year revenues exceeded $4.04 billion, down 1.5 percent (-1.7 percent cc) year-over-year (y/y), with approximately $3.33 billion from the Crocs Brand and $715 million from HeyDude. The Crocs Brand reportedly grew for the 8th consecutive year.

Rees said the direct-to-consumer (DTC) business was over half of total enterprise revenue and grew faster than the company’s Wholesale business.

Consolidated fourth quarter revenues were $958 million in Q4, a decrease of 3.2 percent, or 4.2 percent on a constant-currency (cc) basis. International grew double digits and sales in North America were said to have outperformed internal expectations.

  • Direct-to-consumer (DTC) revenues grew 4.7 percent (+3.6 percent cc) year-over-year.
  • Wholesale revenues decreased 14.5 percent (+15.5 percent cc) in the fourth quarter.

Crocs Q4 Brand Summary
Crocs Brand revenues increased 0.8 percent (-0.4 percent cc) year-over-year to $768 million in the 2025 fourth quarter.

  • DTC revenues increased 6.1 percent (+4.8 percent cc) to $475 million.
  • Wholesale revenues decreased 6.7 percent (-7.7 percent cc) to $294 million in Q4 2025.

Crocs Brand North America revenues decreased 7.4 percent to $436 million.

  • North America Wholesale revenues fell 19.5 percent y/y to $103 million for Q4.
  • North America DTC revenues declined 2.8 percent y/y to $333 million.

Crocs Brand International revenues increased 14.1 percent (+11.0 percent cc) to $332 million in the fourth quarter, which came on top of 19 percent constant-currency growth in Q4 2024. Rees said the Crocs brand is continuing to gain market share across the world.

  • International Wholesale revenues grew 2.0 percent (+0.3 percent cc) y/y to $190 million for the fourth quarter.
  • International DTC revenues jumped 35.6 percent (+30.0 percent) to $142 million.

“In China, our second largest market, we grew 30 percent on top of 64 percent last year, and the country now represents approximately 8 percent of sales,” Rees detailed.

The CEO went on to say that Crocs Brand’s average market share in China, India, Japan, Germany and France represented approximately one-third of the market share it has in its established markets.

“We ended the year with approximately 2,600 Crocs mono-branded stores and kiosks,” Rees stated. “In 2026, we plan to continue expanding our footprint internationally and see an opportunity to open between 200 and 250 doors, both in our Tier 1 markets and within distributor markets around the world.”

Crocs Full-Year Brand Summary
Crocs Brand revenues increased 1.5 percent (+1.3 percent) to $3.33 billion for full-year 2025.

  • DTC revenues increased 3.4 percent (+2.9 percent cc) to $1.73 billion for the year
  • Wholesale revenues decreased 0.5 percent to $1.60 billion for the full year.
  • North America revenues decreased 6.8 percent (+6.7 percent) to $1.71 billion in 2025.
  • International revenues increased 11.9 percent (+11.2 percent) to $1.62 billion in 2025 and now comprise almost half of Crocs Brand sales.

CFO Reagan said Crocs Brand growth for the year was driven by units, which were up 2 percent to the prior year to a total of 129 million pairs sold, while brand ASPs were roughly flat to prior year.

North America Crocs revenue was down 7.4 percent to the prior year at $1.7 billion. Reagan said this was tied to both the decision to pull back on promotional activity in DTC channels earlier in the year as well as carefully managing sell-in to the North American market. For North America, full-year DTC were down 5.4 percent and Wholesale revenues declined 9.3 percent as the company worked to better manage channel sell-in.

International Crocs revenue was up 11.9 percent (+11.2 cc) y/y to $1.62 billion in 2025. Growth was led by DTC, which was up 24.9 percent (+22.9 percent) and Wholesale, which was up 5.4 percent in both reported and constant-currency terms.

“We gained market share in China, which grew revenues by 30 percent to last year with balanced growth across partner comparable store sales, digital and new store openings,” Reagan shared. “Importantly, we also saw another year of double-digit growth in Western Europe, while Japan returned to growth.”

The Path Ahead for the Crocs Brand
“While improving the trajectory of North America remains our top priority in 2026, we’re making good progress against our five strategic pillars for the Crocs Brand,” Rees commented.

“First, we’re driving brand relevance globally as the Clog market share leader,” he continued. During the year, Clogs represented 74 percent of our mix, with sales up slightly to last year, led by strong consumer response to our diversified clog franchises.”

He also mentioned that Crocs has seen strong early reads in its DTC channels for its Crafted Clog, which he said will add a wide variety of upper materializations that they plan to scale in 2026.

“We’re excited about the short- and long-term prospects for this new franchise,” he added.

During the fourth quarter, he said the line business was “particularly robust” in both North America and International, fueled by strong consumer response to newness, including the Unfurgettable Clog. In North America, he said they are carefully managing their Classic franchise, focusing on maintaining tight inventory control and driving further segmentation across key partners. Internationally, he said the Classic Clog grew nicely in 2025.

Rees went on to say they are making strong inroads in scaling their product pillars outside of Clogs through new category expansion.

“Sandals had a very good year and represented 13 percent of our mix, closing in on the $450 million mark,” the CEO noted. “Sales growth was robust in North America, where we not only took market share, but also took advantage of an extended selling season beyond the traditional spring/summer period.”

He said style sandals led the way, fueled by strong full-price selling of the brand’s Brooklyn, Getaway and Miami franchises.

“While sandal awareness is roughly half that of clogs, we saw an encouraging mid-single-digit increase in sandal awareness during 2025 versus 2024,” the CEO noted. “Looking forward into 2026, we believe continued newness in our existing franchises, along with the introduction of our new Saturday franchise and updated personalizable 2-strap sandal underscores an opportunity to gain further market share in this category.”

Jibbitz represented 8 percent of sales for the year.

Rees shared, “Within Jibbitz, we have seen continued growth of our elevated charms. Beyond Jibbitz, we have expanded what personalization looks like and introduced a collection of bags, bag charms and accessories.”

HeyDude Brand Q4
Revenues decreased 16.9 percent (-17.5 percent cc) year-over-year to $189 million in the 2025 fourth quarter.

  • DTC revenues were flat at $133 million.
  • Wholesale revenues decreased 40.5 percent (-41.7 percent) to $56 million in Q4 2025.

Consolidated Profitability & Expenses
Gross margin was reported at 54.7 percent of revenues in the fourth quarter, compared to 57.9 percent. Adjusted gross margin decreased 320 basis points to 54.7 percent compared to 57.9 percent.

Selling, general, and administrative expenses (SG&A) of $377 million increased 1.1 percent from $373 million and represented 39.4 percent of revenues, up from 37.7 percent. Adjusted SG&A of $363 million decreased 2.7 percent from $373 million and represented 37.9 percent of revenues compared to 37.7 percent.

Income from operations decreased 26.8 percent to $146 million, compared to $200 million in the prior-year period, resulting in an operating margin of 15.3 percent in Q4, compared to 20.2 percent in Q4 2024. Adjusted income from operations of $161 million decreased 19.7 percent from $200 million, resulting in an adjusted operating margin of 16.8 percent compared to 20.2 percent.

Diluted earnings per share decreased 68.1 percent to $2.03 in Q4 2025, compared to $6.36 diluted earnings per share in Q4 2024. Adjusted diluted earnings per share of $2.29 decreased 9.1 percent from $2.52 per share in Q4 2024.

During the quarter, CROX repurchased approximately 2.2 million shares for $180 million, at an average price of $83.63 per share. We repaid $90 million of debt.

Balance Sheet and Cash Flow Summary

  • Cash and cash equivalents were $130 million compared to $180 million.
  • Inventories were $369 million, up from $356 million.
  • Total borrowings were $1.23 billion, down from $1.35 billion.
  • Capital expenditures were $51 million, down from $69 million.

Full-Year Outlook
For the full year, CROX expects enterprise revenue growth to be in the range of up slightly to down 1 percent on a reported basis, assuming currency rates as of February 9.

“As you think about the shape of the year, I want to remind you all that the accelerated strategic actions we took in 2025 were largely second half weighted and as such, will continue to have an outsized impact on the first half of the year,” Reagan explained. “Said another way, we expect our year-over-year enterprise revenue growth on a reported basis in the second half to outpace the first half.”

For the Crocs Brand, the company expects full-year revenue on a reported basis to be flat to up 2 percent, led by approximately 10 percent International growth, offset by declines in North America as the company anniversaries the strategic actions taken in the second half of 2025.

“We anticipate the year-over-year revenue rate in North America to improve slightly from 2025 run rate as our guidance anticipates that the DTC channel outperforms the Wholesale channel,” the CFO noted.

For HeyDude, the company expects full-year revenue on a reported basis to be down approximately 7 percent to 9 percent.

“We expect the HeyDude brand to return to growth in the second half of 2026 as we anniversary the impact from the strategic actions we took that started in 2025, primarily in the second half,” Reagan noted.

DTC is expected to outperform the Wholesale channel and improve throughout the year.

CROX expects adjusted gross margin for the year to be up slightly to the prior year despite an anticipated approximate 80 basis points of incremental tariff pressure for the full year, which is expected to materialize in the first half.

Reagan continued, sharing, “Based on current tariff rates and sourcing mix, we now see an unmitigated tariff headwind of approximately $80 million on an annualized basis, which is down from our previously provided figure of $90 million. We believe our diversified sourcing mix and nimble supply chain position us well as we enter 2026. Adjusted SG&A dollars are anticipated to be roughly flat to prior year as we recognize the benefits of our previously announced cost savings programs, offset by investment in the direct-to-consumer channel. Taken together, we expect adjusted operating margin to expand modestly from the 22.3 percent level in 2025. This excludes approximately $25 million of specific discrete costs related to the implementation of our cost savings initiatives.”

CROX expects the underlying non-GAAP effective tax rate, which approximates cash taxes paid to be 18 percent and the GAAP effective tax rate to be 23 percent.

The company expects Adjusted diluted earnings per share to be in the range of $12.88 to $13.35.

“Consistent with our previous guidance philosophy, this range reflects future debt repayment but does not assume the impact from potential future share repurchases,” Reagan said. “We are committed to maintaining net leverage in the range of 1 to 1.5x while deploying excess cash flow towards opportunistically buying back shares. For the year, we are planning capital expenditures to be in the range of $70 million to $80 million.”

First Quarter Outlook
For the first quarter, CROX expects revenues to be down 3.5 percent to down 5.5 percent at currency rates as of February 9.

  • Crocs Brand revenues are expected to be down low single digits, led by International with a quarterly growth rate modestly below the full year run rate.
  • HeyDude revenues are expected to be in the range of down 15 percent to down 18 percent.

“Given the dynamics I spoke to earlier, the percentage decline for HeyDude’s first half revenue is anticipated to be similar for the first quarter,” the CFO noted.

Adjusted operating margin is expected to be approximately 21.5 percent of revenue for the first quarter. Adjusted gross margin is expected to be flat despite the continued impact of incremental tariffs.

“Given the visibility we have today, our Q1 incremental tariff headwind is estimated to be approximately 100 basis points, while the Q2 headwind is expected to be closer to 200 basis points,” Reagan suggested. “Adjusted diluted earnings per share is planned in the range of $2.67 to $2.77.”

Image courtesy Crocs, Inc.