Crocs' Q3 Earnings Top Estimates, Wholesale Revenues Down 14.7%

Crocs, Inc. CROX has reported better-than-expected third-quarter 2025 results, wherein both earnings and revenues beat the Zacks Consensus Estimate. However, both metrics decreased year over year.

The company’s third-quarter performance was backed by disciplined execution of its brand strategies and product and go-to-market innovation. Moving forward, the company has recognized an additional $100 million of gross cost savings next year, in addition to $50 million in 2025. This demonstrates CROX’s strict focus on operating leverage.

Crocs’ adjusted earnings of $2.92 per share beat the Zacks Consensus Estimate of $2.39 but decreased 18.9% from the prior-year figure.

In the past six months, the Zacks Rank #4 (Sell) company’s shares have lost 10.6% compared with the industry’s 9.1% decline.

Insight Into CROX’s Q3 Performance

Consolidated revenues dipped 6.2% to $996 million from the year-ago figure but came above the Zacks Consensus Estimate of $968 million. On a constant-currency basis, revenues fell 6.8% year over year. DTC revenues jumped 1.6% but wholesale revenues declined 14.7%. On a constant-currency basis, DTC revenues inched up 0.9%, while wholesale revenues dropped 15.1% year over year.

Crocs, Inc. Price, Consensus and EPS Surprise

Crocs, Inc. price-consensus-eps-surprise-chart | Crocs, Inc. Quote

The Crocs brand’s revenues dipped 2.5% year over year to $836 million, including a 7.9% decrease in wholesale revenues, offset by a 2% rise in DTC revenues. On a constant-currency basis, revenues for the Crocs brand fell 3.2%, with a 1.2% rise in the DTC business and an 8.4% decline in wholesale. Revenues for the Crocs brand surpassed the Zacks Consensus Estimate of $823 million.

The HEYDUDE brand’s revenues dropped 21.6% year over year to $160.1 million. The decline was due to a 38.6% decrease in wholesale revenues and a 0.5% dip in DTC revenues. On a constant-currency basis, revenues for the HEYDUDE brand declined 11.9%, with a 22.6% decrease in wholesale, offset by a 4.5% rise in the DTC business. Revenues for the HEYDUDE brand beat the Zacks Consensus Estimate of $146 million.

The adjusted gross profit dipped 7.9% year over year to $583 million. The adjusted gross margin contracted 110 basis points (bps) to 58.5%. Adjusted selling, general and administrative (SG&A) expenses, as a percentage of revenues, increased 350 bps to 37.7%. Adjusted operating income fell 23% year over year to $207.7 million. The adjusted operating margin contracted 460 bps to 20.8% from the year-ago quarter.

Financial Details of Crocs

The company ended third-quarter 2025 with cash and cash equivalents of $154 million, long-term borrowings of $1.32 billion and stockholders’ equity of $1.36 billion. It incurred a capital expenditure of $45 million as of Sept. 30, 2025.

In the quarter, CROX repaid $63 million of debt. The company repurchased 2.4 million shares for $203 million. It had $927 million of share repurchase authorization available for future repurchases at the end of the third quarter.

CROX’s Q4 2025 Outlook

For the fourth quarter of 2025, management anticipates revenues to decline roughly 8% year over year at currency rates as of Oct. 27, 2025. Revenues at the Crocs brand are likely to drop approximately 3% compared with the fourth quarter of 2024, while HEYDUDE brand revenues are projected to be down mid-20%.

The company expects non-GAAP adjustments of $10 million with respect to cost-reduction initiatives. Adjusted operating margin is forecast to be approximately 15.5% while the adjusted effective tax rate is likely to be 16%.

Adjusted earnings per share are envisioned to be in the $1.82-$1.92 band, not assuming any impacts of potential future share repurchases. It predicts capital expenditures of $70-$75 million for 2025.

Key Picks in the Consumer Discretionary Space 

Boyd Gaming BYD, which is a gaming company, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

BYD delivered a trailing four-quarter earnings surprise of 9.1%, on average. The Zacks Consensus Estimate for BYD’s current financial-year EPS indicates growth of 5.2% from the year-ago number. 

Guess?, Inc. GES, which is a designer and marketer of casual apparel and accessories, currently carries a Zacks Rank #2 (Buy). 

GES delivered a trailing four-quarter earnings surprise of 26.7%, on average. The Zacks Consensus Estimate for GES’ current financial-year sales indicates growth of 7% from the year-ago number. 

Hanesbrands Inc. HBI, which is a designer and manufacturer of apparel essentials for men, women and children in the US and internationally, currently carries a Zacks Rank of 2.

The Zacks Consensus Estimate for HBI’s current financial-year EPS is expected to rise 65% from the corresponding year-ago reported figure. HBI delivered a trailing four-quarter earnings surprise of 56.1%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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