Investors liked Crocs Inc.’s fourth quarter earnings report, sending shares up in early morning trading.
Shares of Crocs rose in the range of 19.8 percent, or $16.33, to $99.06 after the company posted better-than-expected earnings report before the markets opened. Analysts had expressed caution on the firm in recent weeks.
“We ended 2025 on a strong note with a better-than-expected holiday quarter. For the year, revenue exceeded $4 billion, led by low-double digit international growth for the Crocs brand. At the same time, we accelerated our strategic actions to strengthen the long-term health of both the Crocs and Hey Dude brands,” said Andrew Rees, Crocs’ CEO. “Our powerful value creation model drove operating cash flow of approximately $700 million which enabled us to return shareholder value as we repurchased approximately 10 percent of our shares outstanding, and paid down $128 million of debt.”
More importantly, Rees said the company is entering 2026 “with greater confidence around our growth engines which are diversified across channels, geographies, brands, and product categories.” He noted that the company has identified and actioned $100 million of cost savings for 2026 that are aimed at “driving greater efficiency while providing the flexibility to continue to invest behind our brands and deepen our connection with consumers.”
For the quarter ended Dec. 31, net income dropped to $105.2 million, or $2.03 a diluted share, from $368.9 million or $6.36, in the year-ago quarter. Revenue fell 3.2 percent to $957.6 million from $989.8 million for the quarter. Direct-to-consumer sales rose 4.7 percent, while wholesale revenues fell 14.5 percent.
By brand, Crocs revenues rose 0.8 percent to $768 million in the quarter, with DTC revenues up 6.1 percent and a wholesale revenue decline of 6.7 percent. North America revenues fell 7.4 percent in the quarter, but international revenues rose 14.1 percent. At Hey Dude, revenues fell 16.9 percent, while DTC revenues were flat and wholesale revenue dropped 40.5 percent.
Adjusted earnings per share (EPS) for the quarter was $2.29. That’s better than Wall Street’s expectation of $1.91 on revenue of $917.1 million.
For the year, the company posted a net loss of $81.2 million, or $1.50 a diluted share, against net income of $950.1 million, or $15.88, in 2024. Revenue fell nearly 1.5 percent to $4.04 billion from $4.10 billion.
For the first quarter, the company is estimating revenues to be down between 3.5 percent to 5.5 percent, with the Crocs brand down low-single-digits versus year-ago levels, and the Hey Dude brand projected down 15 percent to 18 percent. Adjusted diluted EPS is forecasted in the range of $2.67 to $2.77, which is higher than Wall Street’s current expectation of $2.53 for the quarter.
For full year 2026, revenue was guided down 1 percent to up slightly versus full-year 2025 levels. The Crocs brand is expected to be flat to up 2 percent, while the Hey Dude brand is estimated at down 7 percent to down 9 percent. Adjusted diluted EPS was projected in the range of $12.88 to $13.35, higher than Wall Street’s estimate of $11.92 for the year.
Crocs said when it reported third quarter earnings that it was pulling back to move forward. The pull-back included reducing wholesale receipts to evolve into a “demand-led model.”
Last month, the company introduced a new global brand campaign “Wonderfully Unordinary” aimed at defining its next chapter, representing its first global omnichannel campaign since its “Come As You Are” spot that debuted in 2017.
