Crocs, Inc. pulled its full-year guidance due to the “new global trade environment as well as business and consumer uncertainty,” but saw first-quarter results that easily topped analyst targets as the Crocs and Heydude brands exceeded management expectations.

Sales of Crocs increased 2.4 percent, or 4.2 percent on a constant-currency (cc) basis, while sales of Heydude declined 9.8 percent.

Earnings in the first quarter of $3.00 topped the analysts’ consensus estimate of $2.48. Revenue for the quarter came in at $937 million versus the consensus estimate of $907.11 million.

“We are incredibly proud of our better-than-expected first quarter performance despite what has been an increasingly volatile macroeconomic backdrop since the onset of the year. Both our Crocs and Heydude brands contributed to the outperformance with gross margins, operating margins, adjusted earnings per share, and cash flow coming in above plan. Our financial strength enabled us to return shareholder value through $61 million in share repurchases, while remaining well within our net leverage target range,” said Andrew Rees, chief executive officer.

Rees continued, “While we are pleased by the performance of our overall business in April, the new global trade environment, as well as business and consumer uncertainty, has made it challenging to predict how consumers may respond in the future. Amid this heightened operating backdrop, we are withdrawing our guidance for 2025. We are committed to remaining transparent to our investment community, our consumers, and our customers as we work to chart a winning course.”

“We have a proven track record of coming out of periods of uncertainty stronger than when we entered them. I believe the current reality presents an opportunity to gain market share, as we focus on what we can control and lean into our clear, competitive advantages.”

First Quarter 2025 Operating Results
(compared to the same period last year)

  • Consolidated revenues were $937 million, approximately flat, or an increase of 1.4 percent on a cc basis. Direct-to-consumer (DTC) revenues grew 2.3 percent, or 3.5 percent on a cc basis. Wholesale revenues contracted 1.6 percent, or approximately flat on a cc basis.
  • Gross margin was 57.8 percent compared to 55.6 percent. Adjusted gross margin grew 180 basis points to 57.8 percent compared to 56.0 percent.
  • Selling, general, and administrative expenses (SG&A) of $319 million increased 7.8 percent from $296 million, and represented 34.0 percent of revenues compared to 31.5 percent. Adjusted SG&A of $319 million increased 17.8 percent from $271 million and represented 34.0 percent of revenues compared to 28.8 percent.
  • Income from operations of $223 million decreased 1.5 percent from $226 million, resulting in an operating margin of 23.8 percent compared to 24.1 percent. Adjusted income from operations of $223 million decreased 12.5 percent from $255 million, resulting in an adjusted operating margin of 23.8 percent compared to 27.1 percent.
  • Diluted earnings per share of $2.83 increased 13.2 percent from $2.50. Adjusted diluted earnings per share of $3.00 were approximately flat.
  • During the quarter, the company borrowed $130 million in debt. Crocs repurchased approximately 0.6 million shares for $61 million at the average share price of $100.23. At quarter-end, approximately $1.3 billion of share repurchase authorization remained available for future repurchases.

First Quarter 2025 Brand Summary
(compared to same period last year)

Crocs Brand revenues increased 2.4 percent to $762 million, or 4.2 percent on a cc basis.

  • Channel — DTC revenues increased 1.1 percent to $285 million, or 2.5 percent on a cc basis. Wholesale revenues increased 3.2 percent to $477 million, or 5.3 percent on a cc basis.
  • Geography — North America revenues decreased 3.8 percent to $369 million, or 3.4 percent on a cc basis. International revenues increased 8.9 percent to $393 million, or 12.3 percent on a cc basis.

Heydude Brand revenues decreased 9.8 percent to $176 million, or 9.5 percent on a cc basis.

  • Channel — DTC revenues increased 8.3 percent to $65 million, or 8.3 percent on a cc basis. Wholesale revenues decreased 17.9 percent to $111 million, or 17.4 percent on a cc basis.

Balance Sheet and Cash Flow
(March 31, 2025 as compared to March 31, 2024)

  • Cash and cash equivalents were $166 million compared to $159 million.
  • Inventories were $391 million compared to $392 million.
  • Total borrowings were $1,482 million compared to $1,727 million.
  • Capital expenditures were $15 million compared to $16 million.

Financial Outlook
Due to macroeconomic uncertainties stemming from global trade policies, the company is withdrawing its full-year 2025 financial outlook that it provided on February 13, 2025, and is not providing a full-year outlook.

Image courtesy Crocs