Crocs posted consolidated revenues of $996m in Q3 compared to $836m in 2024, with DTC up 1.6% but wholesale down 14.7%.
Operating income fell 23% to $208m from $270m, while adjusted diluted earnings per share dropped 18.9% to $2.92.
Crocs reported a net income loss of $145m compared to $199m in the same period last year and a decrease in gross profit to $583m from $633m.
Despite lower revenues, Crocs continued to generate strong cash flow, allowing it to repurchase 2.4m shares worth $203m and reduce debt by $63m.
CEO Andrew Rees said: "Our third-quarter performance was driven by disciplined execution against our brand strategies, as well as greater product and go-to-market innovation. While our results came in ahead of expectations, we believe both of our brands have greater potential, and are working to regain momentum in the marketplace.”
Crocs Q3 brand performance
Heydude’s revenue dropped 21.6% to $160m, driven by a 38.6% fall to $69m in wholesale and a largely stable DTC, down just 0.5% to $91m.
The brand was said to be showing signs of stabilisation in North America, with improved sell-through rates and a return to the top 10 preferred footwear brands among males.
In the conference call, Rees said he believes Heydude is a strong brand within the US casual footwear sector, “Despite challenges, we are confident in its future trajectory. The focus is on returning Heydude to profitability and growth through strategic decisions and management team retooling,” he added.
Meanwhile, its namesake brand Crocs saw revenue decrease 2.5% to $836m, with international markets providing a key lift. International sales grew 5.8% to $389m.
This offset an 8.8% decline in North America due to a strategic pullback on discounting. DTC sales rose 2% to $472m, while wholesale sales fell 7.9% to $364m.
The company previously forecast an expected negative impact from tariffs during its Q2 results, which ended up hitting gross margins by 230 basis points in Q3 and is expected to continue affecting Q4.
Crocs announced it was focusing on product innovation, particularly in clogs and sandals, and expanding its international presence, with significant revenue growth in China, Japan, and Western Europe.
Crocs Q4 outlook
For the fourth quarter, the company expects revenues to decline around 8% year-on-year, with Crocs brand sales down 3% and Heydude down mid-20%.
Adjusted operating margin is projected at 15.5%, with adjusted diluted earnings per share between $1.82 and $1.92.
Rees continued: "As we look forward, in addition to the $50m of gross cost savings in 2025, we have identified an incremental $100m of gross cost savings, and are committed to driving operating leverage in 2026."
He also noted a pickup in store openings, particularly in Europe, with successful outlet stores in the UK and France.
