Crocs Inc. saw North American wholesale sales tumble 18.9 percent for the Crocs Brand and 24.7 percent for HeyDude in the first quarter due to efforts to rationalize inventories in the marketplace. However, sales still topped expectations as a healthy response to new product led by better-than-expected DTC growth.

The results were also supported by continued healthy gains internationally for the Crocs Brand. Crocs lifted its guidance for the year.

“We delivered a better-than-expected first quarter, fueled by broad consumer relevance for both of our brands,” said Andrew Rees, CEO, on an analyst call.

Shares of Crocs closed Thursday at $101.98, up $1.84, or 1.8 percent. Shares had sunk as low as $75.13 during March on investor concerns over moderating growth.

Crocs Q1 Results
In the quarter, consolidated revenues slipped 1.7 percent, or 4 percent on a currency-neutral basis, to $921 million, significantly better than guidance calling for a decline of 8 percent.

Sales were expected to decline as the company continued to reduce wholesale receipts to better align inventory with demand at the wholesale level while also reducing the level of promotions within DTC channels.

Gross margins were down 90 basis points to 56.9 percent, driven by 100 basis points of incremental tariff impact as well as product mix, offset in part by brand mix. Adjusted SG&A dollars were flat to the prior year as the benefit of cost savings initiatives was offset by DTC investments.

Adjusted operating margin of 22.3 percent was down 150 basis points to the prior year but topped guidance of 15.5 percent. Adjusted earnings exclude the costs related to the transition away from a third-party logistics provider for the HeyDude Brand and software transition costs at the Crocs Brand.

On an adjusted basis, earnings fell 10.7 percent to $151.4 million, or $2.99 a share, from $169.7 million, or $3.00, but easily topped guidance in the range of $1.82 to $1.92. On a reported basis, earnings fell 14.1 percent to $137.6 million, or $2.71, from $160.1 million, or $2.83, a year ago.

Crocs Brand Results
Crocs Brand revenue of $767 million was down 1.8 percent on a currency-neutral basis and up 0.8 percent on a reported basis. Crocs Brand’s results were led by the international segment, up 7.2 percent on a reported basis and 2.3 percent on a currency-neutral basis to $421.5 million, including strength in China, India, Japan and Western Europe. Wholesale sales were up 0.4 percent internationally while DTC jumped 31.2 percent.

North America sales for the Crocs Brand were down 6.1 percent to $345.9 million as the 18.9 percent wholesale decline was partially offset by a 5 percent DTC gain. The DTC gain came despite a “meaningful reduction” in promotional activity, Patraic Reagan, EVP and CFO, said on the call.

Rees noted that globally, DTC sales for Crocs Brand grew 11 percent. He said, “We had a strong start to the year as consumers responded positively to product newness across all categories.”

The CEO indicated the Crocs Brand made “excellent progress” against its five strategic pillars, including driving brand relevance globally in the clog category. Rees said that during the first quarter its key clog franchises, Crocband, Crafted and Echo, “performed well,” supporting diversification within the clog category. The reintroduction of Crocband has been “well received,” the Crafted range has been particularly “strong with canvas and floral embroidery uppers,” and the Echo franchise is being scaled with new Echo RO colorways and expanded distribution. Said Rees, “Within our Classics franchise, we are prioritizing maintaining tight inventory control and driving further segmentation across our key partners in North America.”

Outside of the clogs category, Crocs’ sandal business “started the year off strong” and is expected to deliver half a billion in sales this year, up double-digits versus 2025. Said Rees, “Our 3 core style franchises, Getaway, Brooklyn and Miami are capturing incremental shelf space and winning with consumers. Earlier this spring, we introduced our personalizable 2-strap Saturday Sandal across channel and saw exceptional response from both consumers and retailers.”

Crocs also launched a Classic Ballet flat that delivered a “notable sellout globally,” while a LoveShackFancy collaboration ”sold out completely.” A Disney collaboration featuring bags and accessories with Jibbitz holes for personalization saw a “standout performance.”

Other highlights of the quarter included the introduction of a Lego Brick clog that became one of the brand’s best-performing partnerships on social media, and the release of a “Charmed To Meet You” mini-drama series on Gen-Z platform, RealShorts, that drew over 10 million views. Crocs was also recently awarded Top Seller of the Year on TikTok Shop for 2025; orchestrated an activation during NBA All-Star week around the updated Echo Clog, the Echo 2.0; and supported the release of a Ripple model with events aimed at sneakerheads at ComplexCon in Hong Kong and its SoHo store in New York City.

Internationally, TikTok Shop and DTC are both being emphasized, helping the Crocs Brand experience “outsized growth” in high-priority markets: China, India, Japan and Western Europe.

HeyDude Q1 Results
HeyDude delivered revenue of $154 million in the quarter, down 13 percent from the prior year. DTC was up 8 percent, driven by outsized digital marketplace performance and new store opening contributions. Reagan stated, “Notably, this growth was delivered against a continued lower level of performance marketing spend, thus driving higher profitability. The wholesale channel was down 26 percent as we continue to carefully manage our inventory to sell-through levels, consistent with our return to growth plan.”

Rees said HeyDude topped expectations, tied largely to outperformance in DTC despite a significant reduction in performance marketing spend. He likewise noted that HeyDude continued to make progress against its three strategic priorities, including “building a community laser-focused on our core consumer.”

During the quarter, HeyDude launched several relevant collaborations, including a partnership with the Houston Rodeo; collaborations with Chevrolet, the country singer Jelly Roll and Japanese manga series Narut. HeyDude also earned Top Growth Seller of the Year award on TikTok Shop during the quarter.

On product, HeyDude continues to focus on its two iconic styles, the Wally & Wendy, with the Stretch Sox continuing to drive the brand’s core business and a new Stretch Jersey franchise seeing momentum. As spring selling starts, HeyDude’s sandal business is starting to “gain material traction” while the Wally Comp Toe in the work category continues to see a “good response.”

Finally, Rees said HeyDude is focused on stabilizing the North America marketplace with a goal of returning to growth in the back half of the year. Progress was seen in the 8 percent DTC gain and focus on in-channel inventory levels at wholesale. Said Rees, “Wholesale sellouts, while still below our aspirations, improved sequentially versus the fourth quarter. Importantly, we’re receiving positive feedback from our key partners around new products like our HEY2O work and sandals offering as well as our core products like Stretch Jersey franchise and new introductions of our Stretch Sox platform.”

Middle East Conflict
Rees said that while it’s early to assess the potential impact of the Middle East conflict, the disruption could impact Crocs negatively in three ways. He said, “One, reduction of revenues from our Middle East distributor business, which has been contemplated within our annual guidance; two, increased raw material and transportation costs associated with elevated oil prices; and three, a broader impact to the global macro economy, which is uncertain at this time.”

Financial Outlook

Second Quarter 2026
For the second quarter of 2026, Crocs expects:

  • Revenues to be down slightly compared to the second quarter of 2025, at currency rates as of April 27, 2026.
    • Crocs Brand to be up approximately 1 percent to 3 percent compared to the second quarter of 2025.
    • HeyDude Brand to be down approximately 14 percent to 12 percent compared to the second quarter of 2025.
  • Adjusted operating margin to be approximately 24.7 percent.
  • Adjusted diluted earnings per share to be in the range of $4.15 to $4.35. Adjusted diluted earnings per share guidance does not assume any impact from potential future share repurchases.

Full Year 2026
For 2026, Crocs expects:

  • Revenues to be down approximately 1 percent to up 1 percent compared to full year 2025, up from previous guidance of down 1 percent to up slightly, at currency rates as of April 27, 2026.
    • Crocs Brand to be flat to up approximately 2 percent compared to full year 2025.
    • HeyDude Brand to be down approximately 7 percent to 5 percent compared to full year 2025, up from previous guidance of down 9 percent to 7 percent.
  • Non-GAAP adjustments to be approximately $25 million primarily associated with cost reduction initiatives.
  • Adjusted operating margin to expand modestly from 22.3 percent.
  • GAAP effective tax rate to be approximately 23 percent and adjusted effective tax rate to be approximately 18 percent.
  • Adjusted diluted earnings per share to be in the range of $13.20 to $13.75, up from a previous guidance range of $12.88 to $13.35. Adjusted diluted earnings per share guidance does not assume any impact from potential future share repurchases.
  • Capital expenditures of $70 million to $80 million.

Image courtesy Crocs