REVENUEBeat +3.9%
EPSBeat +11.5%
Actuals vs. estimates
| Metric | Actual | Consensus | Surprise |
|---|---|---|---|
| Revenues | $1.04B | $1.00B | ▲ Beat +3.9% |
| EPS(non-GAAP diluted) | $3.69 | $3.31 | ▲ Beat +11.5% |
Highlights & what matters
- Revenue of $1,042.6 million beat the $1,003.5 million estimate by 3.9%; adjusted diluted EPS of $3.69 beat the $3.31 estimate by 11.5%.
- Full-year guidance raised for the third time this year: revenue to approximately +3% from +1% to +2%, Crocs Brand to approximately +4% from +2% to +3%, HEYDUDE to approximately flat from -4% to -2%, and adjusted diluted EPS to $14.45-$14.65 from $13.70-$14.00.
- HEYDUDE returned to growth at +6.1% to $169.9 million, but on wholesale up 14.0% to $79.1 million against direct-to-consumer flat at +0.1% to $90.8 million.
- Capital came back hard: approximately 2.0 million shares repurchased for $250.0 million at an average $123.32, $21 million of debt repaid, and $1.7 billion of authorization remaining.
- The one thing that matters: growth was not broad - Crocs Brand North America revenue fell 2.1% to $438.4 million while international rose 11.8% to $434.4 million, so both the quarter and the raised guide rest on international direct-to-consumer, up 24.1% to $209.2 million.
Key metrics
| Metric | Reported | Prior year | Change |
|---|---|---|---|
| Consolidated revenues | $1,043 million | — | an increase of 4.6% on a reported and constant currency basis |
| Crocs Brand revenues | $873 million | — | increased 4.4% |
| HEYDUDE Brand revenues | $170 million | — | increased 6.1% |
| Adjusted gross margin | 60.3% | 58.5% | increased 180 basis points |
| Adjusted operating margin | 22.3% | 20.8% | — |
| Adjusted diluted earnings per share | $3.69 | $2.92 | increased 26.4% |
Guidance changes
| Item | New guidance | Prior guidance |
|---|---|---|
| Full year 2026 revenues | up approximately 3% compared to full year 2025 | up 1% to 2% |
| Full year 2026 Crocs Brand revenues | up approximately 4% compared to full year 2025 | up 2% to 3% |
| Full year 2026 HEYDUDE Brand revenues | approximately flat compared to full year 2025 | down 4% to 2% |
| Full year 2026 adjusted diluted earnings per share | $14.45 to $14.65 | $13.70 to $14.00 |
| Fourth quarter 2026 revenues | up approximately 7% to 9% compared to the fourth quarter of 2025 | — |
| Fourth quarter 2026 adjusted diluted earnings per share | $3.25 to $3.45 | — |
Quality of earnings
- The headline is flattered by a one-off, but the adjusted beat is real. GAAP gross margin of 66.2% includes $64.1 million of non-recurring IEEPA tariff refunds and GAAP diluted EPS of $4.52 includes $2.7 million of interest on them; adjusted gross margin of 60.3% was still up 180 basis points and adjusted operating income rose 11.7% to $232.0 million on 4.6% revenue growth.
- Most of the adjusted EPS growth is the buyback, not the business. Adjusted net income rose 12.4% to $177.0 million from $157.4 million, while adjusted diluted EPS rose 26.4% to $3.69 from $2.92, with diluted shares down 11.2% to 48.0 million from 54.0 million.
- Cash backs the earnings and inventory is in line. Operating cash flow of $290.4 million ran 1.3 times net income of $216.8 million, free cash flow was $275.5 million against $226.2 million, and inventories grew 4.0% to $413.0 million against 4.6% revenue growth.
Gotchas & watch items
- The growth is international, not broad: Crocs Brand North America wholesale fell 4.9% to $137.2 million and North America direct-to-consumer fell 0.7% to $301.1 million, while international direct-to-consumer rose 24.1% to $209.2 million.
- Underlying North America direct-to-consumer is better than printed: a footnote attributes approximately (2.7%) of the three-month change to a business model change begun during the third quarter, against the reported 0.7% decline.
- HEYDUDE's return to growth is sell-in rather than sell-through: wholesale up 14.0% to $79.1 million against direct-to-consumer up 0.1% to $90.8 million, after wholesale ran down 12.4% year-to-date.
- The fourth-quarter guide requires an acceleration at a lower margin: revenue up 7% to 9% against 4.6% delivered, with adjusted operating margin guided to approximately 20.5% versus 22.3% in the third quarter.