In Q3 2025, Crocs anticipates a revenue decrease of roughly 11% to 9% compared to the same period in 2024, based on currency rates from 4 August.
It also expects an adjusted operating margin between 18% and 19%. The forecast includes an expected negative impact from tariffs which could affect margins by roughly 170 basis points.
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The sales warning comes as it registered the “highest ever” gross profit at $708.84m in the second quarter, up from $681.92m in the prior-year period.
The company’s gross margin improved 30 basis points to 61.7% of sales during the quarter compared to 61.4% in the same period a year ago.
Crocs’ consolidated revenues saw an increase of 3.4%, reaching $1.15bn. This growth was driven by a 5.0% rise in Crocs brand revenues to $960m but offset by the 3.9% decline in its Heydude brand.
Direct-to-consumer revenues grew by 4.0%, and wholesale revenues increased by 2.8%.
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By GlobalData“We reported a solid second quarter with both our Crocs and Heydude brands contributing to our performance, while delivering the highest ever gross profit quarter in company history. Our strong cash flow generation enabled us to return shareholder value through $133m in share repurchases, and $105m in debt paydown,” Crocs chief executive officer Andrew Rees said.
Crocs key metrics in Q2 FY25
Crocs reported a loss from operations of $428m, a stark contrast to the $326m income from operations in the same quarter last year. This resulted in an operating margin loss of 37.2%.
Adjusted income from operations saw a slight decrease of 5% to $309m.
Diluted loss per share stood at $8.82, down significantly from earnings per share of $3.77 in the previous year, again impacted by asset impairments. Adjusted diluted earnings per share saw an increase of 5.5% to $4.23.
The company faced operational headwinds with selling, general, and administrative expenses surging to $1.14bn, a substantial increase from $356m in the previous year, representing 98.9% of revenues compared to the prior 32%.
This surge was primarily due to noncash impairment charges related to Heydude trademarks and goodwill totalling $737m.
During the quarter, Crocs repaid $105m of debt.
Crocs outlook
The company had already withdrawn its financial projections for the full year in May this year, due to the unpredictable nature of global trade policies and their impact on economic conditions.
Crocs has already realised $50m in cost reductions and is planning to cut back on inventory orders. It intends to limit promotional activities as a strategy to maintain the brand’s integrity within the market.
“Although these actions will impact the topline of our business in the short term, they will position our business to win, drive margin dollars, and support continued cash flow generation longer term,” Rees added.
