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1. Company Snapshot

1.a. Company Description

Crocs, Inc., together with its subsidiaries, designs, develops, manufactures, markets, and distributes casual lifestyle footwear and accessories for men, women, and children.It offers various footwear products, including clogs, sandals, slides, flip-flops, boots, flats, wedges, platforms, socks, shoe charms, loafers, sneakers, and slippers under the Crocs brand name.The company sells its products in approximately 85 countries through wholesalers, retail stores, e-commerce sites, and third-party marketplaces.


As of December 31, 2021, it had 193 outlet stores, 107 retail stores, 373 company-operated stores, 73 kiosks and store-in-stores, and 14 company-operated e-commerce sites.The company serves in the Americas, the Asia Pacific, Europe, the Middle East, and Africa.Crocs, Inc.


was founded in 1999 and is headquartered in Broomfield, Colorado.

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1.b. Last Insights on CROX

Crocs, Inc.'s recent performance was negatively impacted by declining sales and eroding margins. The company's Q3 revenue dropped 6.2% year-over-year, with adjusted EPS down 19% (Source: "Crocs: Cheap For Good Reason"). Weak consumer demand, ineffective promotions, and a heavy debt load contributed to the decline. Despite cost-cutting initiatives, Q4 guidance projects further revenue declines and margin contraction. A downgrade to "sell" reflects worsening outlooks for both core and HEYDUDE brands. Additionally, a fund exited its $50 million stake in Crocs due to weakening guidance and operating trends.

1.c. Company Highlights

2. Crocs' Q3 Earnings: A Mixed Bag

Crocs, Inc. reported third-quarter 2025 revenue of approximately $1 billion, down 7% from the prior year. The Crocs Brand revenue was $836 million, down 3%, with wholesale down 8% and DTC up 1%. HEYDUDE brand revenue was $160 million, down 22%, but ahead of expectations. The company's adjusted gross margin was 58.5%, down 110 basis points, and adjusted operating margin was 20.8%. Adjusted diluted earnings per share was $2.92, down 19% from the prior year, slightly above estimates. The company repurchased 2.4 million shares for $203 million and paid down $63 million of debt.

Publication Date: Nov -03

📋 Highlights
  • Revenue Decline: Q3 revenue fell to $1B (-7% YoY), with Crocs Brand down 3% to $836M and HEYDUDE down 22% to $160M despite outperforming expectations.
  • Adjusted Margin Pressure: Adjusted gross margin dropped to 58.5% (-110 bps YoY), while adjusted operating margin stood at 20.8%, with EPS declining 19% to $2.92.
  • Cost Savings Initiatives: Crocs targets $100M in incremental 2026 cost savings (adding to $50M in 2025), driven by supply chain optimization, organizational simplification, and reduced vendor spend.
  • HEYDUDE Challenges: HEYDUDE revenue fell 22% to $160M but remains a strategic focus for profitability, supported by improved sell-through from inventory cleanup.
  • 2026 Growth Strategy: Product innovations like the Crafted clog and Echo 2.0, along with DTC acceleration, aim to offset wholesale declines and drive margin improvement.

Operational Highlights

Crocs has taken strategic actions to improve brand momentum and provide flexibility in their cost structure, focusing on driving profitable growth. The company has identified several buckets for cost savings, including supply chain efficiencies, structural changes, and reduced spending on vendors and services. The HEYDUDE brand is a strong scale brand, and Crocs believes in its future trajectory, despite challenges in recent years.

Cost Savings and Efficiency

The company has identified $100 million of incremental gross cost savings to drive growth for its brands, in addition to the $50 million already actioned this year. Crocs expects to benefit from cost savings in 2026, achieved through simplifying their organizational structure, reducing spend in non-critical areas, and optimizing their supply chain. The company has not disclosed the exact amount of savings to be passed on to the bottom line but aims to manage adjusted SG&A to drive operating leverage in 2026.

Valuation and Outlook

With a P/E Ratio of 24.69 and an EV/EBITDA of 50.27, the market seems to be pricing in a certain level of growth for Crocs. However, analysts estimate next year's revenue growth at -0.1%, indicating a challenging environment. The actual EPS of $2.92 was above estimates, demonstrating the company's ability to manage costs. The company's guidance for Q4 indicates continued declines in wholesale sell-in for Crocs in North America, but expects its direct-to-consumer (DTC) channel to accelerate.

Product Pipeline and Strategy

Crocs has a strong lineup for 2026, including the recently introduced Crafted clog with a soft, materialized upper, and the reintroduction of Croc Brand. Additionally, new Echo 2.0 products will be launched later next year. In sandals, which drove growth in 2025, the company has more products and enhancements planned for 2026. The company's focus on clog innovation, brand relevance, and product diversification is expected to drive growth.

3. NewsRoom

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Can Product Refresh Revive Revenue Trends for Crocs' HEYDUDE Brand?

Dec -04

Source: zacks.com

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Edgestream Partners L.P. Grows Holdings in Crocs, Inc. $CROX

Dec -04

Source: defenseworld.net

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The AI Stock Bubble Is Poised to Pop: 2 Undervalued Stocks to Buy Now

Dec -03

Source: fool.com

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Crocs, Inc. $CROX Shares Bought by American Century Companies Inc.

Dec -01

Source: defenseworld.net

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This Could Be the Best Value Stock to Buy Before 2026

Nov -29

Source: fool.com

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Top Retail Stocks to Consider for a Black Friday Boost

Nov -28

Source: zacks.com

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The Zacks Analyst Blog Crocs, On Holding, Ralph Lauren, Kontoor and Boot Barn

Nov -28

Source: zacks.com

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Buy 5 Apparel & Shoes Stocks to Kick Off Your Black Friday Shopping

Nov -26

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.52%)

6. Segments

Crocs Brand

Expected Growth: 7%

Crocs' 7% growth is driven by increasing demand for comfort footwear, successful marketing campaigns, and strategic partnerships. The brand's expansion into new markets, particularly in Asia, has also contributed to growth. Additionally, the company's focus on digital transformation, including e-commerce and social media engagement, has enhanced customer experience and driven sales.

HEYDUDE Brand

Expected Growth: 5%

HEYDUDE's 5% growth is driven by increasing popularity among younger demographics, expansion into new markets, and strategic partnerships. The brand's comfort-focused and casual footwear resonates with consumers seeking relaxed, laid-back styles. Additionally, Crocs, Inc.'s effective marketing and e-commerce strategies contribute to the brand's growth.

7. Detailed Products

Clogs

Classic, comfortable, and iconic footwear made from proprietary Croslite material

Sandals

Comfortable, lightweight, and easy-to-clean sandals for warm weather

Slides

Easy-on, easy-off footwear with a contoured footbed for comfort

Boots

Waterproof, insulated, and comfortable boots for cold weather

Wellness Series

Footwear designed for comfort and wellness, featuring arch support and cushioning

Jibbitz Charms

Customizable charms that can be attached to Crocs shoes

Crocs At Work

Slip-resistant, comfortable, and easy-to-clean footwear for work environments

8. Crocs, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Crocs, Inc. faces moderate threat from substitutes due to the presence of alternative footwear options such as sneakers, sandals, and boots from other brands.

Bargaining Power Of Customers

Crocs, Inc. has a large customer base, but individual customers do not have significant bargaining power due to the company's strong brand presence and wide distribution network.

Bargaining Power Of Suppliers

Crocs, Inc. has a diversified supplier base, which reduces the bargaining power of individual suppliers. The company's large scale of operations also gives it negotiating power over suppliers.

Threat Of New Entrants

The footwear industry has high barriers to entry, including significant capital requirements, established distribution networks, and strong brand recognition. This makes it difficult for new entrants to compete with Crocs, Inc.

Intensity Of Rivalry

The footwear industry is highly competitive, with many established brands competing for market share. Crocs, Inc. faces intense rivalry from brands such as Nike, Adidas, and Vans, which can lead to pricing pressure and advertising wars.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 54.29%
Debt Cost 8.94%
Equity Weight 45.71%
Equity Cost 14.14%
WACC 11.32%
Leverage 118.75%

11. Quality Control: Crocs, Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Deckers

A-Score: 4.6/10

Value: 5.3

Growth: 9.1

Quality: 8.6

Yield: 0.0

Momentum: 1.0

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Steven Madden

A-Score: 4.3/10

Value: 3.9

Growth: 5.2

Quality: 5.4

Yield: 5.0

Momentum: 1.5

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Nike

A-Score: 4.2/10

Value: 2.0

Growth: 3.9

Quality: 6.1

Yield: 4.0

Momentum: 4.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Crocs

A-Score: 3.9/10

Value: 4.3

Growth: 9.1

Quality: 6.2

Yield: 0.0

Momentum: 1.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
On

A-Score: 3.5/10

Value: 0.7

Growth: 9.9

Quality: 6.3

Yield: 0.0

Momentum: 2.5

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
Adidas

A-Score: 3.4/10

Value: 3.3

Growth: 4.4

Quality: 5.3

Yield: 1.2

Momentum: 1.5

Volatility: 4.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

89.7$

Current Price

89.7$

Potential

-0.00%

Expected Cash-Flows