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Key Takeaways Crocs is expanding beyond clogs through product innovation, collaborations and lifestyle offerings.HEYDUDE is refreshing products and focusing on direct sales to stabilize its performance.CROX combines cost discipline, supply-chain diversification and digital engagement to support margins. Crocs, Inc. (CROX - Free Report) is focusing on strengthening its brand power, expanding digital and direct-to-consumer reach and driving product innovation to support growth. The company continues to build the Crocs brand through global marketing campaigns, collaborations, personalization and product newness, while expanding beyond its core clogs into sandals and broader lifestyle offerings.

The company follows a portfolio strategy by managing the Crocs brand and HEYDUDE brands. While Crocs remains the key growth engine, efforts are underway to stabilize HEYDUDE’s performance through operational adjustments and a strict focus on direct sales. Its HEYDUDE brand is undergoing a product evolution, with refreshed versions of its top sellers and entirely new styles aimed at attracting younger and more fashion-conscious consumers.

By combining creativity with deep consumer insights, Crocs is strengthening brand appeal and deepening consumer engagement across its direct-to-consumer channels, positioning it for sustainable growth and potential market-share gains. At the same time, Crocs remains focused on protecting profitability through disciplined cost management and operational efficiency. Efforts include optimizing inventory, controlling expenses and limiting promotional activity to support margins. The company is also diversifying its supply chain to mitigate tariff-related risks and reduce its reliance on specific sourcing and manufacturing regions.

Product innovation and personalization remain central to Crocs’ success. The company continues to introduce new designs and product variations while promoting customization through Jibbitz charms, which encourages repeat purchases and deeper consumer engagement. On the innovation front, the company is refreshing its iconic silhouettes with updated materials, colors and comfort features, while introducing product lines in sandals, boots and seasonal footwear. Cost-saving initiatives, disciplined spending and supply-chain efficiencies are enhancing operating flexibility.

CROX’s Price Performance, Valuation and EstimatesCrocs’ shares have gained 40.2% in the past six months against the industry’s 6.3% decline.

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From a valuation standpoint, CROX is trading at a forward price-to-earnings ratio of 8.33X compared with the industry’s average of 15.05X.

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The Zacks Consensus Estimate for CROX’s 2026 and 2027 earnings per share (EPS) indicates year-over-year growth of 10.7% and 8%, respectively. The company’s EPS estimate for 2026 and 2027 has increased in the past 30 days.

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Crocs currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Crocs’ CompetitorsRalph Lauren’s (RL - Free Report) growth strategy focuses on strengthening its luxury lifestyle positioning, expanding its customer base and increasing engagement with younger consumers. The company is investing in its iconic core products while broadening its offerings across high-potential categories. RL is expanding its presence in key international markets, particularly Asia and China, while strengthening its directly operated stores and digital channels. Product innovation, personalized consumer experiences and technology investments, including AI-powered tools, are helping Ralph Lauren improve brand relevance and deepen customer relationships.

Gildan Activewear Inc. (GIL - Free Report) is benefiting from its Sustainable Growth Strategy, which focuses on expanding capacity, driving innovation and advancing ESG initiatives to strengthen competitiveness. GIL is focused on the optimization of manufacturing processes and the implementation of cost-reduction initiatives. Gildan Activewear is expanding its production footprint, which is expected to enhance flexibility, support future demand and generate additional cost efficiencies. It is also simplifying operations by harmonizing supply chains, standardizing IT systems and reducing organizational complexity.

lululemon athletica inc. (LULU - Free Report) focuses on sustaining growth by strengthening its brand, expanding its global customer base and delivering innovative, high-quality products. LULU is emphasizing product innovation, differentiated assortments and deeper consumer engagement across its core categories. lululemon is also expanding its international presence, particularly in China and other high-growth markets, while enhancing its digital and omnichannel capabilities to capitalize on evolving consumer preferences and support growth.

Key Takeaways Crocs raised its 2026 revenue and adjusted EPS outlook after stronger second-quarter execution.Crocs Brand DTC revenues rose 12.9%, while international revenues increased 7.8% in the quarter.Tariffs drove 160 basis points of gross-margin pressure as HEYDUDE wholesale revenues fell 17.2%. Crocs, Inc. (CROX - Free Report) raised its 2026 outlook after a stronger second quarter, putting execution at the center of the investment case. Direct-to-consumer growth, international gains and new products are supporting the Crocs Brand.

Those positives are offset by HEYDUDE weakness and tariff-related margin pressure. The key question is whether channel and geographic momentum can keep improving fast enough to protect earnings growth.

Crocs’ Raised Outlook Reflects Better ExecutionCrocs now expects 2026 enterprise revenues to increase 1% to 2%, up from its prior range of down 1% to up 1%. Adjusted earnings are projected at $13.70-$14 per share, above the prior $13.20-$13.75 range.

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The Crocs Brand is expected to grow revenues 2% to 3% for the year, led by international markets. HEYDUDE guidance also improved to a 2% to 4% decline, with management expecting the brand to return to growth in the second half.

CROX DTC Growth Helps Counter Wholesale WeaknessSecond-quarter Crocs Brand direct-to-consumer revenues increased 12.9% to $559 million, while HEYDUDE DTC revenues rose 7.2% to $96 million. Wholesale revenues fell 5% for Crocs and 17.2% for HEYDUDE, making channel mix a central part of the recovery case.

Peer results show why that mix matters. Deckers Outdoor Corporation (DECK - Free Report) reported 13% DTC net sales growth and 2.2% wholesale growth in its June quarter. NIKE, Inc. (NKE - Free Report) reported a 7% decline in NIKE Direct revenues and 4% wholesale growth in its fiscal fourth quarter.

Crocs International Growth Adds Another TailwindCrocs Brand international revenues increased 7.8% to $542 million in the second quarter. China, India and Japan posted double-digit growth, while WesternEurope benefited from DTC momentum.

Product breadth is helping support that expansion. Crocband, Echo and Crafted clogs performed well, while the Miami, Getaway and Brooklyn sandal franchises gained adoption. The Classic Ballet Flat also recorded sellouts globally, particularly in Asia.

CROX Tariff Costs Keep Margin Risk in FocusAdjusted gross margin declined 170 basis points to 60% in the second quarter. Management said 160 basis points of the year-over-year pressure came from incremental tariffs, showing that higher revenues are not translating cleanly into margin expansion.

Adjusted operating margin fell 180 basis points to 25.1%. Cost savings and international price increases provided offsets, but tariff exposure and HEYDUDE’s weaker mix remain constraints on operating leverage.

Crocs’ Ranking Signals Fit the Mixed SetupCrocs’ raised outlook, DTC gains and international growth strengthen the near-term operating picture, but the setup is not one-sided. HEYDUDE remains in transition, North America is expected to decline for the full year and tariffs continue to pressure profitability.

CROX currently carries a Zacks Rank #2 (Buy). It also has a VGM Score of B and Value Score of B, which add favorable signals for investors using those styles. The Growth Score of C is more neutral, while the Momentum Score of F is the weakest part of the Style Score profile. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Rank is designed to capture near-term earnings-estimate trends, while the Style Scores complement that signal across value, growth and momentum characteristics. For CROX, the combination is constructive but mixed, leaving continued execution across brands, channels and margins as the main test for the improved outlook.

Crocs, Inc. (NASDAQ:CROX) shares fell almost 10% on Thursday after the footwear company issued a weaker-than-expected third quarter outlook, as tariff pressures and continued weakness at its HEYDUDE brand weighed on sentiment, despite a second-quarter earnings and revenue beat.

The company forecast Q3 adjusted earnings per share of $3.20 to $3.30 on roughly flat revenue, below Wall Street expectations for adjusted EPS of around $3.53 to $3.55 and revenue of about $1 billion. Crocs attributed the outlook to ongoing tariff impacts and product mix pressures.

For the second quarter of 2026, Crocs reported adjusted earnings per share of $4.55, above analyst estimates of $4.32 to $4.35.

Revenue came in at $1.18 billion, topping expectations of $1.15 billion and rising 2.6% from the prior year.

The company’s core Crocs brand surpassed $1 billion in quarterly revenue for the first time, with sales increasing 4.3% year over year to $1 billion. Direct-to-consumer revenue for the brand rose 12.9%, while wholesale revenue declined 5%.

HEYDUDE continued to face challenges, with quarterly revenue falling 5.7% to $179 million. Direct-to-consumer sales increased 7.2%, but wholesale revenue declined 17.2%.

Overall gross margin declined to 59.4% from 61.7% a year earlier, while adjusted gross margin fell 170 basis points to 60% as tariff-related costs affected profitability. Adjusted operating income declined 4.5% to $296 million, with adjusted operating margin narrowing to 25.1% from 26.9%.

Crocs raised its full-year 2026 outlook, now expecting revenue growth of approximately 1% to 2%, compared with its previous forecast of down 1% to up 1%. Adjusted diluted earnings per share guidance was increased to a range of $13.70 to $14, up from the prior range of $13.20 to $13.75.

“Our results reflect broad consumer demand across both brands, healthy direct-to-consumer growth, and strong consumer response to new product innovation,” Crocs CEO Andrew Rees said in a statement.  

The company also announced that its board increased its share repurchase authorization by $1.5 billion, leaving approximately $2 billion available for future buybacks. During the quarter, Crocs repurchased about 2.3 million shares for $251 million.

Full-Year 2026 Outlook Raised On Both The Top- And Bottom-Line Crocs Brand Surpasses $1 Billion In Quarterly Revenue For The First Time Share Repurchase Authorization Increased By $1.5 Billion To Approximately $2 Billion , /PRNewswire/ -- Crocs, Inc. (NASDAQ: CROX), a world leader in innovative casual footwear for all, today announced its second quarter 2026 financial results.

"We are pleased to have delivered a stronger-than-expected second quarter, highlighted by record enterprise revenue, including the Crocs Brand surpassing $1 billion in quarterly revenue for the first time ever. Our results reflect broad consumer demand across both brands, healthy direct-to-consumer growth, and strong consumer response to new product innovation. Based on our strong first half performance, we are again raising our full-year top- and bottom-line guidance," said Andrew Rees, Chief Executive Officer.

Mr. Rees continued, "Supported by our strong cash flow generation, we remain committed to balancing investment in our brands with disciplined capital allocation, including share repurchase and debt paydown. Reflecting our confidence in the business and future cash-flow generation, we have expanded our share repurchase authorization as we aim to further return meaningful value to shareholders."

Amounts referred to as "Adjusted" or "Non-GAAP" are Non-GAAP measures and include adjustments that are described under the heading "Reconciliation of GAAP Measures to Non-GAAP Measures." A reconciliation of these amounts to their GAAP counterparts is contained in the schedules below.

Second Quarter 2026 Operating Results (Compared to the Same Period Last Year)

Consolidated revenues were $1,179 million, an increase of 2.6%, or 2.0% on a constant currency basis. Direct-to-consumer ("DTC") revenues grew 12.0%, or 11.3% on a constant currency basis. Wholesale revenues decreased 7.2%, or 7.6% on a constant currency basis. Gross margin was 59.4% compared to 61.7%. Adjusted gross margin decreased 170 basis points to 60.0% compared to 61.7%. Selling, general, and administrative expenses ("SG&A") of $415 million decreased 63.5% from $1,136 million, and represented 35.2% of revenues compared to 98.9%. The decrease in SG&A is largely driven by noncash impairment charges related to the indefinite-lived HEYDUDE trademark and HEYDUDE Brand reporting unit goodwill of $430 million and $307 million, respectively, during the three months ended June 30, 2025. Adjusted SG&A increased 3.1% to $412 million, and represented 34.9% of revenues compared to 34.7%. Income from operations of $286 million compared to loss from operations of $428 million resulted in operating margin of 24.2% compared to operating margin loss of 37.2%. The prior year loss from operations is driven by asset impairments, as described above. Adjusted income from operations of $296 million decreased 4.5% from $309 million, resulting in adjusted operating margin of 25.1% compared to 26.9%. Diluted earnings per share of $4.13 compared to diluted loss per share of $8.82. The prior year loss per share is driven by asset impairments, as described above. Adjusted diluted earnings per share of $4.55 increased 7.6% from $4.23. During the quarter, we repaid $31 million of debt. We repurchased approximately 2.3 million shares for $251 million at the average share price of $106.87. At quarter-end, approximately $496 million of share repurchase authorization remained available for future repurchases. Second Quarter 2026 Brand Summary (Compared to the Same Period Last Year)

Crocs Brand: Revenues increased 4.3% to $1.0 billion, or 3.7% on a constant currency basis. Channel DTC revenues increased 12.9% to $559 million, or 12.0% on a constant currency basis.  Wholesale revenues decreased 5.0% to $441 million, or 5.4% on a constant currency basis. Geography North America revenues increased 0.4% to $459 million, or 0.4% on a constant currency basis. International revenues increased 7.8% to $542 million, or 6.6% on a constant currency basis. HEYDUDE Brand: Revenues decreased 5.7% to $179 million, or 5.8% on a constant currency basis. Channel DTC revenues increased 7.2% to $96 million or 7.1% on a constant currency basis. Wholesale revenues decreased 17.2% to $83 million, or 17.4% on a constant currency basis. Balance Sheet and Cash Flow (June 30, 2026, as compared to June 30, 2025)

Cash and cash equivalents were $170 million compared to $201 million.  Inventories were $389 million compared to $405 million.  Total borrowings were $1.31 billion compared to $1.38 billion.  Capital expenditures were $39 million compared to $32 million. Crocs, Inc. Upsizes Share Repurchase Authorization To $2.0 Billion

On July 27, 2026, the Board approved a $1.5 billion increase to our share repurchase authorization, after which approximately $2.0 billion remained available for future common stock repurchases.

Financial Outlook

Full Year 2026

For 2026, we expect:

Revenues to be up approximately 1% to 2% compared to full year 2025, up from our previous guidance of down 1% to up 1%, at currency rates as of July 27, 2026. Crocs Brand to be up approximately 2% to 3% compared to full year 2025, up from our previous guidance of flat to up 2%. HEYDUDE Brand to be down approximately 4% to 2% compared to full year 2025, up from our previous guidance of down 7% to 5%. Non-GAAP adjustments to be approximately $25 million primarily associated with our cost reduction initiatives. Adjusted operating margin to expand modestly from 22.3%. GAAP effective tax rate to be approximately 23% and adjusted effective tax rate to be approximately 18%. Adjusted diluted earnings per share to be in the range of $13.70 to $14.00, up from our previous guidance range of $13.20 to $13.75. Adjusted diluted earnings per share guidance does not assume any impact from potential future share repurchases. Capital expenditures of $70 million to $80 million. Third Quarter 2026

For the third quarter of 2026, we expect:

Revenues to be approximately flat compared to the third quarter of 2025, at currency rates as of July 27, 2026. Crocs Brand to be up approximately 1% compared to the third quarter of 2025. HEYDUDE Brand to be down approximately 3% to flat compared to the third quarter of 2025. Adjusted operating margin to be approximately 21.5%. Adjusted diluted earnings per share to be in the range of $3.20 to $3.30. Adjusted diluted earnings per share guidance does not assume any impact from potential future share repurchases. Conference Call Information

A conference call to discuss second quarter results is scheduled for today, Thursday, July 30, 2026, at 8:30 am ET. To receive conference call details, please register at the Investor Relations section of the Crocs website, investors.crocs.com. The webcast will also be available live and on replay through July 30, 2027, at this site.

About Crocs, Inc.:

Crocs, Inc. (Nasdaq: CROX), headquartered in Broomfield, Colorado, is a world leader in innovative casual footwear for all, combining comfort and style with a value that consumers know and love. The Company's brands include Crocs and HEYDUDE, and its products are sold in more than 85 countries through wholesale and direct-to-consumer channels. For more information on Crocs, Inc. visit investors.crocs.com. To learn more about our brands, visit www.crocs.com or www.heydude.com. Individuals can also visit https://investors.crocs.com/news-and-events/ and follow both Crocs and HEYDUDE on their social platforms.

Forward Looking Statements

This press release includes estimates, projections, and statements relating to our business plans, commitments, objectives, and expected operating results that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

These statements include, but are not limited to, statements regarding our financial condition, brand and liquidity outlook, and expectations regarding our future financial results, share repurchases, our strategy, plans, objectives, expectations (financial or otherwise) and intentions, future financial results and growth potential, statements regarding future financial outlook and future profitability, cash flows, and brand strength, anticipated product portfolio and our ability to deliver sustained, highly profitable growth and create significant shareholder value. These statements involve known and unknown risks, uncertainties, and other factors, which may cause our actual results, performance, or achievements to be materially different from any future results, performances, or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include the factors described in our most recent Annual Report on Form 10-K under the heading "Risk Factors" and our subsequent filings with the Securities and Exchange Commission. Readers are encouraged to review that section and all other disclosures appearing in our filings with the Securities and Exchange Commission.

All information in this document speaks only as of July 30, 2026. We do not undertake any obligation to update publicly any forward-looking statements, whether as a result of the receipt of new information, future events, or otherwise, except as required by applicable law.

Category:Investors

CROCS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

2026

2025

2026

2025

Revenues

$ 1,179,468

$ 1,149,373

$ 2,100,925

$ 2,086,706

Cost of sales

478,761

440,537

877,273

836,321

 Gross profit

700,707

708,836

1,223,652

1,250,385

Selling, general and administrative expenses

415,029

1,136,352

737,130

1,454,927

Income (loss) from operations

285,678

(427,516)

486,522

(204,542)

Foreign currency (losses) gains, net

(2,302)

434

(3,927)

5,307

Interest income

583

371

918

704

Interest expense

(19,909)

(22,523)

(40,368)

(45,289)

Other (expense) income, net

(127)

627

(378)

152

 Income (loss) before income taxes

263,923

(448,607)

442,767

(243,668)

Income tax expense

59,036

43,675

100,324

88,511

Net income (loss)

$ 204,887

$ (492,282)

$ 342,443

$ (332,179)

Net income (loss) per common share:

 Basic

$ 4.17

$ (8.82)

$ 6.89

$ (5.94)

 Diluted

$ 4.13

$ (8.82)

$ 6.83

$ (5.94)

Weighted average common shares outstanding:

 Basic

49,115

55,783

49,695

55,946

 Diluted

49,628

55,783

50,164

55,946

CROCS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and par value amounts)

June 30,
2026

December 31,
2025

ASSETS

Current assets:

Cash and cash equivalents

$ 170,276

$ 130,354

Accounts receivable, net of allowances of $38,848 and $28,136, respectively

430,297

278,191

Inventories

389,212

368,687

Income taxes receivable

4,924

32,782

Other receivables

22,892

22,082

Prepaid expenses and other assets

67,005

53,787

Total current assets

1,084,606

885,883

Property and equipment, net of accumulated depreciation of $239,780 and $209,873,
respectively

246,078

238,191

Intangible assets, net

1,317,707

1,324,680

Goodwill

404,643

404,689

Deferred tax assets, net

911,346

935,054

Restricted cash

3,555

3,557

Right-of-use assets

337,548

338,669

Other assets

50,796

44,027

Total assets

$ 4,356,279

$ 4,174,750

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

 Accounts payable

$ 262,511

$ 266,090

 Accrued expenses and other liabilities

306,066

300,959

 Income taxes payable

69,308

47,308

 Current operating lease liabilities

90,144

85,772

Total current liabilities

728,029

700,129

Deferred tax liabilities, net

861

882

Long-term income taxes payable

639,580

649,057

Long-term borrowings

1,307,658

1,230,885

Long-term operating lease liabilities

291,400

297,192

Other liabilities

4,077

3,322

Total liabilities

2,971,605

2,881,467

Commitments and contingencies

Stockholders' equity:

Common stock, par value $0.001 per share, 250.0 million shares authorized, 111.0 million
  and 110.7 million issued, 48.1 million and 50.2 million outstanding, respectively

111

111

Treasury stock, at cost, 62.9 million and 60.5 million shares, respectively

(3,296,549)

(3,040,416)

Additional paid-in capital

921,457

896,605

Retained earnings

3,823,081

3,480,638

Accumulated other comprehensive loss

(63,426)

(43,655)

Total stockholders' equity

1,384,674

1,293,283

Total liabilities and stockholders' equity

$ 4,356,279

$ 4,174,750

CROCS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

Six Months Ended June 30,

2026

2025

Cash flows from operating activities:

Net income (loss)

$ 342,443

$ (332,179)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

40,286

38,011

Operating lease cost

56,581

49,738

Share-based compensation

24,852

20,036

Asset impairments

3,301

738,115

Deferred taxes

(53)

13,956

Other non-cash items

8,531

8,428

Changes in operating assets and liabilities:

Accounts receivable

(154,913)

(147,242)

Inventories

(22,832)

(49,824)

Prepaid expenses and other assets

(21,297)

(12,160)

Accounts payable, accrued expenses and other liabilities

1,604

(26,467)

Right-of-use assets and operating lease liabilities

(56,764)

(49,821)

Income taxes

49,029

(32,026)

Cash provided by operating activities

270,768

218,565

Cash flows from investing activities:

Purchases of property, equipment, and software

(38,729)

(31,946)

Cash used in investing activities

(38,729)

(31,946)

Cash flows from financing activities:

Proceeds from borrowings

295,000

539,000

Repayments of borrowings

(223,000)

(514,000)

Repurchases of common stock, including excise tax

(256,157)

(194,137)

Repurchases of common stock for tax withholding

(3,238)

(4,104)

Cash used in financing activities

(187,395)

(173,241)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

(4,724)

7,125

Net change in cash, cash equivalents, and restricted cash

39,920

20,503

Cash, cash equivalents, and restricted cash—beginning of period

133,911

183,678

Cash, cash equivalents, and restricted cash—end of period

$ 173,831

$ 204,181

CROCS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

In addition to financial measures presented on the basis of accounting principles generally accepted in the United States of America ("GAAP"), we present "Non-GAAP gross profit," "Non-GAAP gross margin," "Non-GAAP gross margin by brand," "Non-GAAP selling, general, and administrative expenses," "Non-GAAP selling, general and administrative expenses as a percent of revenues," "Non-GAAP income from operations," "Non-GAAP operating margin," "Non-GAAP income before income taxes," "Non-GAAP income tax expense," "Non-GAAP effective tax rate," "Non-GAAP net income," and "Non-GAAP basic and diluted net income per common share," which are non-GAAP financial measures. We also present future period guidance for "Non-GAAP operating margin," "Non-GAAP effective tax rate," "Non-GAAP diluted earnings per share," and "Free cash flow." We also present a long-term target for 'Net leverage.' Non-GAAP results exclude the impact of items that management believes affect the comparability or underlying business trends in our condensed consolidated financial statements in the periods presented.

We also present certain information related to our current period results of operations through "constant currency," which is a non-GAAP financial measure and should be viewed as a supplement to our results of operations and presentation of reportable segments under GAAP. Constant currency represents current period results that have been retranslated using exchange rates used in the prior year comparative period to enhance the visibility of the underlying business trends excluding the impact of foreign currency exchange rate fluctuations.

Management uses non-GAAP results to assist in comparing business trends from period to period on a consistent basis in communications with the board of directors, stockholders, analysts, and investors concerning our financial performance. We believe that these non-GAAP measures, in addition to corresponding GAAP measures, are useful to investors and other users of our condensed consolidated financial statements as an additional tool for evaluating operating performance and trends by providing meaningful information about operations compared to our peers by excluding the impacts of various differences. The calculation of our non-GAAP financial metrics may vary from company to company. As a result, our calculation of these metrics may not be comparable to similarly titled metrics used by other companies.

Management believes Non-GAAP gross profit, Non-GAAP gross margin, and Non-GAAP gross margin by brand are useful performance measures for investors because they provide investors with a means of comparing these measures between periods without the impact of certain expenses that we believe are not indicative of our routine cost of sales. Our routine cost of sales includes core product costs and distribution expenses primarily related to receiving, inspecting, warehousing, and packaging product and transportation costs associated with delivering products from distribution centers. Costs not indicative of our routine cost of sales may or may not be recurring in nature and include costs to expand and transition to new distribution centers.

Management believes Non-GAAP selling, general and administrative expenses and Non-GAAP selling, general and administrative expenses as a percent of revenues are useful performance measures for investors because they provide a more meaningful comparison to prior periods and may be indicative of the level of such expenses to be incurred in future periods. These measures exclude the impact of certain expenses not related to our normal operations that are expected to be non-recurring in nature, such as impairment charges.

Non-GAAP income from operations and Non-GAAP operating margin reflect the impact of Non-GAAP gross profit and Non-GAAP selling, general, and administrative expenses, as discussed above. We believe these are useful performance measures for investors because they provide a basis to compare performance in the period to prior periods.

Non-GAAP income before income taxes reflects the impact of Non-GAAP income from operations, as discussed above. We believe this is a useful performance measure for investors because it provides a basis to compare performance in the period to prior periods.

Management believes Non-GAAP income tax expense is a useful performance measure for investors because it provides a basis to compare our tax rates to historical tax rates, and because the adjustment is necessary in order to calculate Non-GAAP net income.

Management believes Non-GAAP effective tax rate is a useful performance measure for investors because it provides an ongoing effective tax rate that they can use for historical comparisons and forecasting.

Management believes Non-GAAP net income is a useful performance measure for investors because it focuses on underlying operating results and trends and improves the comparability of our results to prior periods. This measure reflects the impact of Non-GAAP gross profit, Non-GAAP selling, general, and administrative expenses, and Non-GAAP income tax expense, as described above.

Management believes Non-GAAP basic and diluted net income per common share are useful performance measures for investors because they focus on underlying operating results and trends and improve the comparability of our results to prior periods. These measures reflect the impact of Non-GAAP gross profit, Non-GAAP selling, general, and administrative expenses, and Non-GAAP income tax expense, as described above.

Management believes Net leverage is a useful performance measure for investors because it provides a measure of our financial strength and liquidity.

Free cash flow is calculated as 'Cash provided by operating activities' less 'Purchases of property, equipment, and software.' Management believes free cash flow is useful for investors because it provides a clear measure of our ability to generate cash for discretionary uses such as funding growth opportunities, repurchasing shares, and reducing debt.

For the three and six months ended June 30, 2026, management believes it is helpful to evaluate our results excluding the impacts of various adjustments relating to special or non-recurring items. Investors should not consider these non-GAAP measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

CROCS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

(UNAUDITED)

Non-GAAP gross profit and gross margin reconciliation:

Three Months Ended June 30,

Six Months Ended June 30,

2026

2025

2026

2025

(in thousands)

GAAP revenues

$ 1,179,468

$ 1,149,373

$ 2,100,925

$ 2,086,706

GAAP gross profit

$ 700,707

$ 708,836

$ 1,223,652

$ 1,250,385

Distributor takeback costs (1)

4,356

—

4,356

—

Distribution centers (2)

2,355

—

3,733

—

Other

49

—

118

—

Total adjustments

6,760

—

8,207

—

Non-GAAP gross profit

$ 707,467

$ 708,836

$ 1,231,859

$ 1,250,385

GAAP gross margin

59.4 %

61.7 %

58.2 %

59.9 %

Non-GAAP gross margin

60.0 %

61.7 %

58.6 %

59.9 %

(1)

Relates to the takeback of a distributor in Malaysia.

(2)

Relates to the transition away from a third-party logistics provider for the HEYDUDE Brand, software transition costs at our Crocs Brand distribution center in Dayton, Ohio, and other distribution center related transition costs.

Non-GAAP gross margin reconciliation by brand:

Crocs Brand:

Three Months Ended June 30,

Six Months Ended June 30,

2026

2025

2026

2025

GAAP Crocs Brand gross margin

62.6 %

64.1 %

61.2 %

62.6 %

Non-GAAP adjustments:

Distributor takeback costs (1)

0.4 %

— %

0.3 %

— %

Distribution centers (2)

0.1 %

— %

0.1 %

— %

Other

less than 0.1%

— %

less than 0.1%

— %

Non-GAAP Crocs Brand gross margin

63.1 %

64.1 %

61.6 %

62.6 %

(1)

Relates to the takeback of a distributor in Malaysia.

(2)

Relates to software transition costs at our Crocs Brand distribution center in Dayton, Ohio and other distribution center related transition costs.

HEYDUDE Brand:

Three Months Ended June 30,

Six Months Ended June 30,

2026

2025

2026

2025

GAAP HEYDUDE Brand gross margin

43.1 %

50.2 %

43.5 %

48.5 %

Non-GAAP adjustments:

Distribution centers (1)

0.6 %

— %

0.6 %

— %

Non-GAAP HEYDUDE Brand gross margin

43.7 %

50.2 %

44.1 %

48.5 %

(1)  Relates to the transition away from a third-party logistics provider.

Non-GAAP selling, general and administrative reconciliation:

Three Months Ended June 30,

Six Months Ended June 30,

2026

2025

2026

2025

(in thousands)

GAAP revenues

$ 1,179,468

$ 1,149,373

$ 2,100,925

$ 2,086,706

GAAP selling, general and administrative expenses

$ 415,029

$ 1,136,352

$ 737,130

$ 1,454,927

Impairment of indefinite-lived trademark (1)

—

(430,000)

—

(430,000)

Impairment of goodwill (2)

—

(307,000)

—

(307,000)

Charges incurred in connection with cost savings initiatives

(2,924)

—

(4,583)

—

Impairment of leasehold improvement assets (3)

—

—

(3,301)

—

Severance costs (4)

(310)

—

1,260

Other

38

—

38

—

Total adjustments

(3,196)

(737,000)

(6,586)

(737,000)

Non-GAAP selling, general and administrative expenses (5)

$   411,833

$  399,352

$  730,544

$  717,927

GAAP selling, general and administrative expenses as a percent of revenues

35.2 %

98.9 %

35.1 %

69.7 %

Non-GAAP selling, general and administrative expenses as a percent of revenues

34.9 %

34.7 %

34.8 %

34.4 %

(1)

Represents an impairment of the HEYDUDE indefinite-lived trademark.

(2)

Represents an impairment of the HEYDUDE Brand reporting unit goodwill.

(3)

Represents impairment charges for certain HEYDUDE leasehold improvement assets.

(4)

Represents operational workforce reduction charges incurred in connection with cost savings initiatives in the three months ended June 30, 2026. Additionally, the six months ended June 30, 2026, includes a change in estimate for severance costs recorded as of December 31, 2025.

(5)

Non-GAAP selling, general and administrative expenses are presented gross of tax.

Non-GAAP income from operations and operating margin reconciliation:

Three Months Ended June 30,

Six Months Ended June 30,

2026

2025

2026

2025

(in thousands)

GAAP revenues

$ 1,179,468

$ 1,149,373

$ 2,100,925

$ 2,086,706

GAAP income (loss) from operations

$    285,678

$   (427,516)

$    486,522

$   (204,542)

Non-GAAP gross profit adjustments (1)

6,760

—

8,207

—

Non-GAAP selling, general and administrative expenses adjustments (2)

3,196

737,000

6,586

737,000

Non-GAAP income from operations

$   295,634

$   309,484

$   501,315

$   532,458

GAAP operating margin

24.2 %

(37.2) %

23.2 %

(9.8) %

Non-GAAP operating margin

25.1 %

26.9 %

23.9 %

25.5 %

(1)

See 'Non-GAAP gross profit and gross margin reconciliation' above for more details.

(2)

See 'Non-GAAP selling, general and administrative expenses and selling, general and administrative expenses as a percent of revenues reconciliation' above for more details.

Non-GAAP income tax expense and effective tax rate reconciliation:

Three Months Ended June 30,

Six Months Ended June 30,

2026

2025

2026

2025

(in thousands)

GAAP income (loss) from operations

$ 285,678

$ (427,516)

$ 486,522

$ (204,542)

GAAP income (loss) before income taxes

263,923

(448,607)

442,767

(243,668)

Non-GAAP income from operations (1)

$ 295,634

$ 309,484

$ 501,315

$ 532,458

GAAP non-operating income (expense):

Foreign currency (losses) gains, net

(2,302)

434

(3,927)

5,307

Interest income

583

371

918

704

Interest expense

(19,909)

(22,523)

(40,368)

(45,289)

Other (expense) income, net

(127)

627

(378)

152

Non-GAAP income before income taxes

$ 273,879

$ 288,393

$ 457,560

$ 493,332

GAAP income tax expense

$   59,036

$   43,675

$ 100,324

$   88,511

Tax effect of non-GAAP operating adjustments

2,273

29,942

2,406

29,942

Impact of intra-entity IP transactions (2)

(13,104)

(22,701)

(22,283)

(32,273)

Non-GAAP income tax expense

$  48,205

$   50,916

$  80,447

$  86,180

GAAP effective income tax rate

22.4 %

(9.7) %

22.7 %

(36.3) %

Non-GAAP effective income tax rate

17.6 %

17.7 %

17.6 %

17.5 %

(1)

See 'Non-GAAP income from operations and operating margin reconciliation' above for more details.

(2)

In the fourth quarter of 2024, and previously in 2023, 2021, and 2020, we made changes to our international legal structure, including an intra-entity transaction related to certain intellectual property rights, primarily to align with current and future international operations. The transactions resulted in a step-up in the tax basis of intellectual property rights and correlated increases in foreign deferred tax assets based on the fair value of the transferred intellectual property rights. This adjustment represents the current period impact of these transactions.

Non-GAAP net income per share reconciliation:

Three Months Ended June 30,

Six Months Ended June 30,

2026

2025

2026

2025

(in thousands, except per share data)

Numerator:

GAAP net income (loss)

$ 204,887

$ (492,282)

$ 342,443

$ (332,179)

Non-GAAP gross profit adjustments (1)

6,760

—

8,207

—

Non-GAAP selling, general and administrative expenses adjustments (2)

3,196

737,000

6,586

737,000

Non-GAAP other income adjustment

—

—

—

(842)

Tax effect of non-GAAP adjustments (3)

10,831

(7,241)

19,877

2,331

Non-GAAP net income

$ 225,674

$ 237,477

$ 377,113

$ 406,310

Denominator:

GAAP weighted average common shares outstanding - basic

49,115

55,783

49,695

55,946

Plus: GAAP dilutive effect of stock options and unvested restricted stock units

513

—

469

—

GAAP weighted average common shares outstanding - diluted

49,628

55,783

50,164

55,946

GAAP weighted average common shares outstanding - basic

55,783

55,946

Plus: dilutive effect of stock options and unvested restricted stock units

365

379

Non-GAAP weighted average common shares outstanding - diluted

56,148

56,325

GAAP net income (loss) per common share:

Basic

$ 4.17

$ (8.82)

$ 6.89

$ (5.94)

Diluted

$ 4.13

$ (8.82)

$ 6.83

$ (5.94)

Non-GAAP net income per common share:

Basic

$ 4.59

$ 4.26

$ 7.59

$ 7.26

Diluted

$ 4.55

$ 4.23

$ 7.52

$ 7.21

(1)

See 'Non-GAAP gross profit and gross margin reconciliation' above for more information.

(2)

See 'Non-GAAP selling, general and administrative expenses and selling, general and administrative expenses as a percent of revenues reconciliation' above for more information.

(3)

See 'Non-GAAP income tax expense (benefit) and effective tax rate reconciliation' above for more information.

Free cash flow reconciliation:

Three Months Ended June 30,

Six Months Ended June 30,

2026

2025

2026

2025

(in thousands)

Cash provided by operating activities

$ 351,702

$ 285,800

$ 270,768

$ 218,565

Purchases of property, equipment, and software

(20,729)

(16,571)

(38,729)

(31,946)

Free cash flow

$ 330,973

$ 269,229

$ 232,039

$ 186,619

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL GUIDANCE

Full Year 2026:

Approximately:

Non-GAAP operating margin reconciliation:

GAAP operating margin

>21.7%

Non-GAAP adjustments (1)

0.6 %

Non-GAAP operating margin

>22.3%

Non-GAAP effective tax rate reconciliation:

GAAP effective tax rate

23 %

Non-GAAP adjustments (2)

(5) %

Non-GAAP effective tax rate

18 %

Non-GAAP diluted earnings per share reconciliation:

GAAP diluted earnings per share

$12.47 to $12.77

Non-GAAP adjustments (1)(2)

$1.23

Non-GAAP diluted earnings per share

$13.70 to $14.00

(1)

During 2026, we expect to incur approximately $25 million of non-GAAP adjustments, primarily associated with our cost reduction initiatives. This estimate does not include the receipt of potential IEEPA tariff refunds, as we are not able to predict the timing quarter-by-quarter. We plan to recognize IEEPA tariff refunds when they are realized or considered realizable, in accordance with the gain contingency model.

(2)

In the fourth quarter of 2024, and previously in 2023, 2021, and 2020, we made changes to our international legal structure, including an intra-entity transaction related to certain intellectual property rights, primarily to align with current and future international operations. The transactions resulted in a step-up in the tax basis of intellectual property rights and correlated increases in foreign deferred tax assets based on the fair value of the transferred intellectual property rights. This adjustment represents the full year 2026 impact of these transactions.

Non-GAAP Financial Guidance

Our forward-looking guidance for consolidated "adjusted operating margin" and "adjusted diluted earnings per share" represents non-GAAP financial measures that excludes or otherwise has been adjusted for special items from our U.S. GAAP financial statements. We consider these items to be necessary adjustments for purposes of evaluating our ongoing business performance and are often considered non-recurring. Such adjustments are subjective and involve significant management judgment.

While we are able to estimate full year non-GAAP adjustments, we are unable to reconcile forward-looking adjusted measures to their nearest U.S. GAAP measure quarter-by-quarter because we are unable to predict the timing of these adjustments with a reasonable degree of certainty. By their very nature, special and other non-core items are difficult to anticipate with precision because they are generally associated with unexpected and unplanned events that impact our company and its financial results. Therefore, we are unable to provide a reconciliation of these measures for the guidance related to the third quarter of 2026 without unreasonable efforts.

CROCS, INC. AND SUBSIDIARIES

REVENUES BY SEGMENT, CHANNEL, AND GEOGRAPHY

(UNAUDITED)

Three Months Ended
June 30,

Six Months Ended
June 30,

% Change

Constant Currency

% Change (1)

Favorable (Unfavorable)

2026

2025

2026

2025

Q2 2026-
2025

YTD
2026-
2025

Q2 2026-
2025

YTD
2026-
2025

($ in thousands)

Crocs Brand:

North America:

Wholesale

$ 152,549

$ 166,528

$ 290,946

$ 337,210

(8.4) %

(13.7) %

(8.4) %

(13.8) %

Direct-to-consumer

306,184

290,602

513,713

488,437

5.4 %

5.2 %

5.4 %

5.1 %

Total North America (2)

458,733

457,130

804,659

825,647

0.4 %

(2.5) %

0.4 %

(2.6) %

International:

Wholesale

288,950

298,151

596,375

604,274

(3.1) %

(1.3) %

(3.7) %

(3.8) %

Direct-to-consumer

252,754

204,309

366,819

291,278

23.7 %

25.9 %

21.6 %

22.3 %

Total International

541,704

502,460

963,194

895,552

7.8 %

7.6 %

6.6 %

4.8 %

Total Crocs Brand

$ 1,000,437

$ 959,590

$ 1,767,853

$ 1,721,199

4.3 %

2.7 %

3.7 %

1.2 %

Crocs Brand:

Wholesale

$ 441,499

$ 464,679

$ 887,321

$ 941,484

(5.0) %

(5.8) %

(5.4) %

(7.4) %

Direct-to-consumer

558,938

494,911

880,532

779,715

12.9 %

12.9 %

12.0 %

11.5 %

Total Crocs Brand

1,000,437

959,590

1,767,853

1,721,199

4.3 %

2.7 %

3.7 %

1.2 %

HEYDUDE Brand:

Wholesale

82,564

99,760

165,966

210,453

(17.2) %

(21.1) %

(17.4) %

(21.8) %

Direct-to-consumer

96,467

90,023

167,106

155,054

7.2 %

7.8 %

7.1 %

7.7 %

Total HEYDUDE Brand (3)

179,031

189,783

333,072

365,507

(5.7) %

(8.9) %

(5.8) %

(9.4) %

Total consolidated revenues

$ 1,179,468

$ 1,149,373

$ 2,100,925

$ 2,086,706

2.6 %

0.7 %

2.0 %

(0.6) %

(1)

Reflects year over year change as if the current period results were in constant currency, which is a non-GAAP financial measure. See 'Reconciliation of GAAP Measures to Non-GAAP Measures' above for more information.

(2)

North America includes the United States and Canada.

(3)

The vast majority of HEYDUDE Brand revenues are derived from North America.

Investor Contact:

Abigail Ritter, Crocs, Inc.

(302) 265-0922

[email protected]

PR Contact:

Melissa Layton, Crocs, Inc.

(303) 848-7885

[email protected]

SOURCE Crocs, Inc.

Crocs, Inc. (NASDAQ:CROX) has received a higher price target from Bank of America ahead of its second-quarter earnings report, with the firm reiterating its ‘Buy’ rating and raising its target to $160 from $145 on expectations that sustained direct-to-consumer (DTC) growth in North America could support further valuation expansion.

The firm increased its valuation multiple to 11 times its 2027 earnings estimate from 10 times previously, writing that additional evidence of durable North American DTC growth could drive further multiple expansion.

This price target implies upside from current levels of about $132.

Bank of America forecasts Q2 earnings per share of $4.24, broadly in line with Visible Alpha consensus estimates.

The firm sees the potential for upside in the quarter, supported by continued DTC momentum and an improving setup for the second half of the year as the company laps strategic actions taken last year that weighed on sales.

The analysts expect total second-quarter sales to decline 1% year over year, with growth in the Crocs brand's DTC business offset by weaker wholesale sales and continued declines at Heydude. They forecast North American DTC sales to rise 1%, below the Street's expectation of 2%, but noted that demand for newer products, including sandals, could support stronger results.

Bank of America highlighted continued consumer interest in new product launches, pointing to popular sandal styles such as the Miami Flip, where it has observed products selling out even after restocking.

On margins, the firm expects gross margin to decline 150 basis points year over year, in line with company guidance that incorporates tariff-related headwinds. While lower tariff rates and the potential for refunds could provide some relief, the analysts wrote that a greater contribution from newer products and sales channels with lower gross margins could offset those benefits.

Looking beyond the second quarter, Bank of America expects a more favorable operating environment in the second half of the year, supported by upcoming product launches, including the Echo 2 and Mellow 2 collections, and easier comparisons following last year's reductions in promotional activity and wholesale shipments.

The firm also sees the possibility that improving demand for new products could eventually benefit North American wholesale sales, although its current forecasts continue to assume negative wholesale trends through the remainder of 2026.

Key Takeaways Crocs' LEGO Brick Clog drove strong social engagement and digital traffic.LoveShackFancy sold out globally, while Disney boosted accessories and premium Jibbitz charms.TikTok Shop expansion and Gen Z campaigns helped Crocs attract younger consumers and support DTC momentum. Strategic partnerships have been Crocs Inc.'s (CROX - Free Report) most effective tools for reinforcing brand relevance and expanding its appeal beyond its traditional customer base. In the first quarter of 2026, management highlighted collaborations as a key component of its consumer engagement strategy, using limited-edition launches, entertainment franchises and digital campaigns to create excitement around the brand. The company's multi-year global partnership with LEGO debuted with the LEGO Brick Clog, which management described as one of Crocs' best-performing partnerships on social media, generating significant consumer engagement and digital traffic.

Crocs also complemented this initiative with collaborations that directly supported product innovation. The LoveShackFancy collection sold out globally, reinforcing the demand for newer silhouettes such as the Classic Ballet Flat. At the same time, the Disney collaboration featuring Mickey Mouse helped drive strong growth in bags, accessories and premium Jibbitz charms, demonstrating that partnerships can extend spending beyond footwear into higher-margin personalization categories.

Management indicated that these initiatives contributed to strong consumer response across multiple product categories, including clogs, sandals and accessories, supporting the company's broader diversification strategy.

Beyond products, Crocs is using partnerships to deepen digital engagement. The company expanded its presence on TikTok Shop globally and was recognized as the platform's Top Seller of the Year for 2025. It also introduced innovative marketing campaigns, including a Gen Z-focused micro-drama series and experiential launches tied to events such as NBA All-Star Week.

Management believes that these collaborations and marketing activations are helping attract younger consumers while strengthening direct-to-consumer momentum. As Crocs broadens its product portfolio and global reach, strategic partnerships appear to be doing more than creating short-term buzz. They are reinforcing brand visibility, supporting product innovation and helping the company differentiate itself in an increasingly competitive casual footwear market.

Zacks Rundown for CROXCrocs’ shares have jumped 26.8% in the past three months against the industry’s decline of 3.2%.

Image Source: Zacks Investment Research

From a valuation standpoint, CROX trades at a forward price-to-earnings ratio of 8.94X, lower than the industry’s average 14.65X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for CROX’s 2026 and 2027 EPS estimates imply year-over-year growth of 9.3% and 7.7%, respectively. The consensus mark for 2026 and 2027 EPS has been unchanged in the past 30 days.

Image Source: Zacks Investment Research

CROX stock presently carries a Zacks Rank #4 (Sell).

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The Zacks Consensus Estimate for DLTH’s current fiscal-year earnings implies growth of 39.5% from the year-ago reported figure. Duluth Holdings has delivered a trailing four-quarter earnings surprise of 107.5%, on average.

Steven Madden Ltd. (SHOO - Free Report) designs, sources, markets and sells fashion-forward branded and private-label footwear, accessories, handbags and apparel for women, men and children across the world. SHOO currently flaunts a Zacks Rank #1.

The Zacks Consensus Estimate for Steven Madden’s current fiscal-year sales and earnings implies growth of 11.7% and 22.9%, respectively, from the year-ago reported figures. SHOO delivered a trailing four-quarter negative earnings surprise of 1.9%, on average.

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The Zacks Consensus Estimate for COLM’s current fiscal-year sales and earnings implies growth of 2.6% and 4.6% from the year-ago reported numbers. COLM delivered a trailing four-quarter earnings surprise of 44.1%, on average.