Loading...
01/10 16:35
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presented mixed signals. Positive aspects include better-than-expected performance of Crocs, strong gross margins, and a significant share repurchase plan. However, the decline in HEYDUDE revenues and lack of specific guidance on Q2 revenue create uncertainty. The management's cautious tone in the Q&A, particularly regarding global trade unpredictability and reluctance to provide detailed guidance, suggests a neutral outlook. The stock price is likely to remain stable in the short term, with no major catalysts for a significant upward or downward movement.
Enterprise Revenues $937 million, up 1% year-over-year, driven by better-than-expected performance from both Crocs and HEYDUDE brands.
Croc’s Brand Revenues $762 million, up 4% year-over-year, led by double-digit growth in International markets and better-than-expected performance in North America.
HEYDUDE Revenues $176 million, down 10% year-over-year, but better than the guidance of a 14% to 16% decline, driven by an 8% growth in direct-to-consumer sales.
Enterprise Adjusted Gross Margins 57.8%, up 180 basis points year-over-year, attributed to lower product costs and favorable customer mix.
Croc’s Brand Adjusted Gross Margins 60.7%, up 260 basis points year-over-year, due to lower product costs and favorable customer mix.
HEYDUDE Brand Adjusted Gross Margins 46.6%, down 120 basis points year-over-year, driven by deleverage against supply chain costs.
Adjusted Operating Margin 23.8%, up 230 basis points compared to guidance and down 330 basis points year-over-year, reflecting strategic investments.
Adjusted Diluted Earnings Per Share $3, roughly flat year-over-year, significantly above expectations.
Inventory Balance $391 million, flat year-over-year, with inventory turns above the goal of four times on an annualized basis.
Cash and Cash Equivalents $166 million, with $679 million of borrowing capacity on the revolver, indicating a strong liquidity position.
Share Repurchase 607,000 shares repurchased for $61 million at an average cost of $100 per share.
Total Borrowings $1.5 billion, remaining within the net leverage target range of 1 to 1.5 times.
New Product Introductions: Crocs is introducing new Clog franchises, including the Classic Clog and new franchises like InMotion, which have shown strong growth.
Sandal Growth: Sandals gained notable share of the business, with strong sell-throughs across core franchises like Getaway, Brooklyn, and Miami.
Influencer Campaigns: A spring break activation with influencer Alex Cooper drove over 2.5 million social impressions, enhancing brand visibility.
Collaboration Releases: A limited release collaboration with Tokyo-based streetwear brand BAPE generated significant traffic and new customer acquisition.
International Revenue Growth: Achieved 12% revenue growth internationally, with China growing over 30% and notable growth in Western Europe.
Market Share Gains: Crocs aims to gain market share globally, with strong performance in China and successful activations on platforms like Tmall.
Cost Savings Initiatives: Identified approximately $50 million of additional savings to be realized in 2025 to mitigate potential tariff impacts.
Inventory Management: Carefully managing forward unit inventory levels while being mindful of the impact of tariffs on average unit costs.
Withdrawal of Guidance: Withdrew full year guidance due to uncertainty around tariffs and potential consumer demand impacts.
Sourcing Strategy: Maintaining a well-diversified sourcing mix to mitigate tariff impacts, with 47% from Vietnam and 17% from Indonesia.
Tariff Impact: The company faces uncertainty due to incremental tariffs imposed by the U.S. on countries where products are sourced. A 10% incremental tariff could cost approximately $45 million annually, while a 145% tariff on China could lead to costs of around $130 million.
Supply Chain Challenges: The company has a diversified sourcing mix but is currently navigating a volatile global trade environment, making it difficult to predict short and long-term impacts on business.
Consumer Demand Uncertainty: There is a potential for softer demand for footwear and consumer goods due to increased costs and higher prices, which could burden consumers already facing economic pressures.
Cost Management: In response to the uncertain macroeconomic environment, the company has identified $50 million in additional savings for 2025 and is evaluating further cost-reduction actions.
Regulatory Issues: The company has suspended guidance for 2025 due to the unpredictable financial impact of tariffs and the overall economic climate.
Revenue Growth: Enterprise revenues of $937 million grew 1% year-over-year, exceeding guidance of a 1.5% decline.
Gross Margin: Enterprise adjusted gross margins of 57.8% increased by 180 basis points compared to the prior year.
Cost Savings: Identified approximately $50 million of additional savings to be realized in 2025.
Sourcing Strategy: Anticipated sourcing mix into the U.S. for 2025: 47% from Vietnam, 17% from Indonesia, 13% each from China and India, and 5% each from Mexico and Cambodia.
Market Share Growth: Achieved 12% revenue growth in international markets, with China growing over 30%.
Digital Marketing: Continued focus on digitally led social-first marketing strategies, including successful campaigns on TikTok.
Revenue Guidance: Withdrew full year guidance due to uncertainty around tariffs and potential consumer demand.
Tariff Impact: If a 10% incremental tariff is imposed, it would cost approximately $45 million annually; a 145% tariff on China would imply a cost of $130 million.
Gross Margin Expectations: Expect gross margin pressure from tariffs to start in Q2, with the largest impact anticipated in the second half of the year.
Capital Allocation: Plans to pay down debt and opportunistically buy back stock while maintaining a net leverage target range of 1 to 1.5 times.
Share Repurchase: During the quarter, we repurchased approximately 607,000 shares of our common stock for a total of $61 million at an average cost of $100 per share. At the end of Q1, we had just under $1.3 billion remaining on our buyback authorization.
The earnings call reflects concerns with declining revenues and tariff impacts, despite cost-saving measures and international growth. The Q&A highlighted cautious consumer spending and challenges in North America, with management avoiding specifics on cost savings and tariff impacts. Additionally, HEYDUDE's ongoing cleanup and cautious wholesale planning indicate uncertainty. The lack of clear guidance and ongoing tariff-related headwinds contribute to a negative sentiment, suggesting a stock price decline of -2% to -8%.
The earnings call shows mixed signals: strong international growth, particularly in China, and cost-saving measures are positive. However, challenges in North America, tariffs, and cautious consumer behavior create headwinds. The withdrawal of full-year guidance due to tariffs and demand uncertainty is concerning. The Q&A section reveals management's strategic responses but lacks clear impact quantification, contributing to uncertainty. Overall, the sentiment is neutral, balancing positive international performance with domestic challenges and tariff impacts.
The earnings call presented mixed signals. Positive aspects include better-than-expected performance of Crocs, strong gross margins, and a significant share repurchase plan. However, the decline in HEYDUDE revenues and lack of specific guidance on Q2 revenue create uncertainty. The management's cautious tone in the Q&A, particularly regarding global trade unpredictability and reluctance to provide detailed guidance, suggests a neutral outlook. The stock price is likely to remain stable in the short term, with no major catalysts for a significant upward or downward movement.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
