Crocs' Q4 Earnings Top Estimates, Direct-to-Consumer Revenues Up 4.7%

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

The company’s fourth-quarter performance was backed by disciplined execution of its brand strategies and product and go-to-market innovation. It exited 2025 on a solid note with a better-than-expected holiday period. The company has recognized and actioned $100 million of cost savings in 2026, targeting greater efficiency and flexibility to make investments in brands.

Crocs’ adjusted earnings of $2.29 per share beat the Zacks Consensus Estimate of $1.92 but decreased 9.1% from the prior-year figure.

Following better-than-expected fourth-quarter 2025 results, CROX’s shares have jumped 13% in the trading hours. In the past six months, the company’s shares have gained 11.5% compared with the industry’s 9.1% growth.

Insight Into CROX’s Q4 Performance

Consolidated revenues dipped 3.2% to $957.6 million from the year-ago figure but came above the Zacks Consensus Estimate of $919 million. On a constant-currency basis, revenues fell 4.2% year over year. Direct-to-consumer (DTC) revenues jumped 4.7% but wholesale revenues declined 14.5%. On a constant-currency basis, DTC revenues inched up 3.6%, while wholesale revenues dropped 15.5% year over year.

The Crocs brand’s revenues inched up 0.8% year over year to $768 million, including a 6.7% decrease in wholesale revenues, offset by a 6.1% rise in DTC revenues. On a constant-currency basis, revenues for the Crocs brand fell 0.4%, with a 4.8% rise in the DTC business and a 7.7% decline in wholesale. Revenues for the Crocs brand surpassed the Zacks Consensus Estimate of $744 million.

The HEYDUDE brand’s revenues dropped 16.9% year over year to $189 million. The decline was due to a 40.5% decrease in wholesale revenues and flat DTC revenues. On a constant-currency basis, revenues for the HEYDUDE brand declined 17.5%, with a 41.7% decrease in wholesale business. Revenues for the HEYDUDE brand beat the Zacks Consensus Estimate of $177 million.
 

Crocs, Inc. Price, Consensus and EPS Surprise

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

The adjusted gross profit dipped 8.6% year over year to $523.7 million. The adjusted gross margin contracted 320 basis points (bps) to 54.7%. Adjusted selling, general and administrative (SG&A) expenses, as a percentage of revenues, jumped 20 bps to 37.9%. Adjusted operating income fell 19.7% year over year to $161 million. The adjusted operating margin contracted 340 bps to 16.8% from the year-ago quarter.

Financial Details of Crocs

The Zacks Rank #4 (Sell) company ended third-quarter 2025 with cash and cash equivalents of $130 million, long-term borrowings of $1.23 billion and stockholders’ equity of $1.29 billion. It incurred a capital expenditure of $51 million as of Dec. 31, 2025.

In the quarter, CROX repaid $90 million of debt. The company repurchased 2.2 million shares for $180 million. It had $747 million of share repurchase authorization available for future repurchases at the end of 2025.

CROX’s Q4 2025 Outlook

For the first quarter of 2026, management anticipates revenues to decline 3.5-5.5% year over year at currency rates as of Feb. 9, 2026. Revenues at the Crocs brand are likely to be down roughly low-single-digits compared with the fourth quarter of 2025, while HEYDUDE brand revenues are projected to be down 15-18%.

For the said quarter, the adjusted operating margin is likely to be nearly 21.5%, while adjusted earnings per share are envisioned to be in the bracket of $2.67-$2.77.

For 2026, management expects revenues to be down roughly 1% to up slightly year over year, as of currency rates as of Feb. 9, 2026. Crocs revenues are likely to be approximately flat to up 2% from 2025. HEYDUDE is likely to be down roughly 7-9% compared with 2025.

The company expects non-GAAP adjustments of $25 million with respect to supply-chain optimization and cost savings. Adjusted operating margin is forecast to expand modestly from 22.3% while the adjusted effective tax rate is likely to be 18%.

Adjusted earnings per share are envisioned to be in the $12.88-$13.35 band, not assuming any impacts of potential future share repurchases. It predicts capital expenditures of $70-$80 million for 2026.

Key Picks in the Consumer Discretionary Space 

Ralph Lauren Corporation RL, which is a designer and marketer of premium lifestyle products, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

RL delivered a trailing four-quarter earnings surprise of 9.7%, on average. The Zacks Consensus Estimate for Ralph Lauren’s current financial-year sales indicates growth of 11.7% from the year-ago number. 

Columbia Sportswear Company COLM, which is a marketer and distributor of outdoor and active lifestyle apparel, footwear, accessories and equipment, currently sports a Zacks Rank of 1.

The Zacks Consensus Estimate for COLM’s current financial-year sales is expected to rise 2.1% from the corresponding year-ago reported figure. COLM delivered a trailing four-quarter earnings surprise of 25.2%, on average.

Boyd Gaming BYD, which is a gaming company, currently carries a Zacks Rank #2 (Buy). 

BYD delivered a trailing four-quarter earnings surprise of 11.4%, on average. The Zacks Consensus Estimate for BYD’s current financial-year EPS indicates growth of 2.2% from the year-ago number. 

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

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