Crocs, Inc. reported third-quarter results that beat expectations, but again disappointed Wall Street with softer sales guidance amid higher competition from athletic footwear styles and broader weakness in consumer spending. During a quarterly conference call with analysts, Andrew Rees, CEO, outlined the steps being taken to revive the core Crocs brand’s growth in North America.

“Improving the trajectory of North America is a top priority,” Rees told analysts.

Sales for the Crocs brand in the third quarter decreased 8.8 percent to $448 million, following declines of 6.5 percent in the second quarter, 3.8 percent in the first quarter and flat sales in the fourth quarter. Crocs’ officials further forecast that Crocs brand sales would decline in the low double digits in the fourth quarter.

The steep decline in the third quarter for the Crocs brand reflects two strategic actions the company made to protect its “long-term brand health,” as previously indicated to analysts on its Q2 quarterly call.

The actions include reducing discounting on online channels in North America, which Rees said has “the greatest impact on our classic clog business.” Second, the Crocs brand reduced receipts into the wholesale channel to better match supply to demand and “ultimately drive a demand-led model.”

Said Rees,” While these actions are impacting near-term sales, we expect them to enable a foundation for future growth. Further, we have seen a net positive benefit to our gross profit dollars in North America as a result of our pullback on promotions.”

Rees also cited several steps the company has taken as part of its “five strategic pillars” to stimulate consumer demand. “Our return to growth in North America will be based on greater product innovation, diversification within clogs, growth within sandals, and new categories, said Rees. “We have carefully managed our Classic Clog franchise with the desired outcome of creating clearer segmentation, while leaning into innovation within new clog and sandal introductions,” he continued.

Rees provided an update on the company’s five strategic pillars, as follows:

  1. Driving brand relevance through product iterations and innovation: Crocs Classic Crafted Clog was introduced with a campaign featuring Lola Tung, an American actress, singer, and model who stars in the Amazon Prime series The Summer I Turned Pretty. The shoe delivered an initial sellout on TikTok Shop and has since seen a “strong consumer response in all channels.” Within existing clog franchises, the Echo RO was launched “to immediate success” while an updated Crocs brand and Echo 2.0 clog will arrive in 2026. Rees said, “We expect product diversification within our clog pillar to enable greater channel segmentation and drive long-term growth in our clog franchise.”
  2. Diversifying outside of clogs through new category expansion: Sandals outperformed the broader portfolio and took market share in this quarter, with strong full-price performance across key style franchises, including Brooklyn, Getaway and Miami. Retailers were noted to be chasing those key styles beyond the back-to-school season. Rees expects continued strength in them, as well as the reintroduction of an updated, personalizable two-strap sandal, to be an opportunity to gain market share in 2026. In the lined category, the Unfurgettable clog within the Cozy franchise, backed by “Stranger Things” actress Millie Bobby Brown, has had a “very positive response” on TikTok, particularly with Gen Z females.
  3. Fuel consumer engagement with disruptive digital and social marketing: The release during the quarter of classic and classic-lined clogs as well as Jibbitz in a partnership with the NFO “exceeded our expectations with particularly strong sell-through across the board, leading to multiple restocks,” said Rees. Other highlights included a collaboration with Krispy Kreme and its latest release on Roblox. Internationally, a Pan-Asian monsoon campaign, “Your Crocs, Your Splash,” featuring two prominent actors from South Korea and India, generated approximately 575 million views across Instagram and YouTube. Said Rees, “These partnerships are prime examples of how our brand excites, inspires and connects with a wide range of consumers across the globe.”
  4. Creating compelling consumer experiences across distribution: remains a priority, particularly in social commerce, where Crocs continues to be the number one footwear brand on TikTok Shop in the U.S. The platform is gaining adoption among younger consumers. Throughout October, both Crocs and HeyDude livestreamed on TikTok Shop and on their own websites, with Crocs becoming the first fashion brand to livestream 24/7 for a full month across TikTok. The Crocs brand recently launched on TikTok Shop in the U.K., Germany and Brazil.
  5. International growth: Many international markets remain in their “infancy of growth” for Crocs. During the first quarter, China delivered revenue growth across all channels, up mid-20 percent to the prior year, “outperforming the overall market handily,” said Rees. Strong growth was also observed in Japan and across all key markets in Western Europe during the quarter.

Said Rees, “In summary, our priorities are clear: driving product innovation in clogs and sandals, staying agile and consumer-focused while sharpening segmentation and accelerating international growth, but penetration opportunities remain.”

During the Q&A session with analysts, Rees stated that he believes the Crocs brand is being impacted by a pullback in spending by lower-income consumers.

Rees said, “There is a portion of our North American consumers who are highly affluent. They’re buying Crocs. They’re buying other high-end brands, and they are in great financial shape. But there is a large portion of consumers who are nervous. They are in less good financial shape, and they’re being super cautious about their spending and certainly spending closer to need.”

Rees also noted that both Crocs and brands are seeing more competition from athletic brands. He said, “The less than $100 arena remains relatively competitive. We do see the athletic brands, particularly the big ones, leaning back into these price points and increasing distribution.”

Asked about North American wholesale channels, Rees said retailers are planning cautiously, with continued declines in wholesale sell-in expected for the Crocs brand in North America for the fourth quarter.

Rees said retailers are “not seeing traffic growth, and they’re not expecting significant growth in the short term. And I don’t believe they’re going to plan significant growth into the early part of 2026.”

Nonetheless, Rees reiterated in the Q&A session that he expects Crocs brand sales to benefit from the company’s efforts to reduce online discounting, better align wholesale sell-in with demand, and focus on “clog innovation and brand relevance.” He again called out the potential of the new Crafted and Echo lines as well as the reintroduction of the Crocs brand “to diversify our clog platform and allow greater segmentation across our wholesale partners.”

Rees also cited the potential benefits of driving continued growth in sandals and slippers for the Crocs brand, as well as the buzz created by continued collaborations and TikTok live-streaming.

Rees said, “I think we have a well-rounded and robust strategy to return Crocs to growth in North America, and I am very confident in our ability to do that in short order.”

Images courtesy Crocs x Lola Tung