Crocs Q1 Earnings on Deck: Will Adverse Trends Hurt Performance?

Crocs, Inc. CROX is scheduled to release first-quarter 2025 results on May 8, before market open. The Zacks Consensus Estimate for revenues is pegged at $909.6 million, indicating a decline of 3.1% from the prior-year figure.

The consensus estimate for earnings per share has remained stable at $2.51 in the past seven days. The estimate indicates a decline of 16.9% from the year-ago period’s number.

This Broomfield, CO-based company has a trailing four-quarter earnings surprise of 17.8%, on average. In the last reported quarter, its bottom line surpassed the Zacks Consensus Estimate by 10.04%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Crocs, Inc. Price, Consensus and EPS Surprise

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

Key Factors to Note Ahead of CROX’s Q1 Results

Crocs has been witnessing persistent softness in its HEYDUDE brand, which, coupled with a volatile operating environment, is likely to have negatively impacted sales. In the first quarter, the HEYDUDE brand is likely to have faced continued pressure from soft wholesale demand and declining comparable sales in its direct-to-consumer channel. Despite growth in DTC revenues, the overall brand momentum appears challenged, which could weigh on the company's consolidated performance.

On its last earnings call, Crocs outlined a cautious outlook for the first quarter of 2025, anticipating a 3.5% year-over-year revenue decline based on currency rates as of Feb. 10, 2025. This guidance includes a $19 million adverse impact from foreign currency, with enterprise revenues expected to decline about 1.5% on a constant-currency basis.

The Crocs brand is projected to see flat to slightly down revenue performance, supported by mid-single-digit international growth offsetting softer trends elsewhere. Meanwhile, the HEYDUDE brand is forecasted to decline 14-16%, largely due to weakness in wholesale demand. Regionally, the North America business is expected to fall by mid-single digits, partially impacted by the Easter holiday timing shift. Adjusted earnings per share are projected to be $2.38-$2.52, with an adjusted operating margin of approximately 21.5%, including about 80 basis points of headwind from foreign currency and new tariffs.

However, Crocs’ first quarter results are likely to reflect gains from robust consumer demand and the continued strength of its core product categories, including clogs and sandals. The company has consistently performed well in these segments, supported by effective pricing strategies and strong brand appeal. Its personalization engine, particularly the Jibbitz business, has also shown steady growth, especially in international markets. Additionally, Crocs' solid performance in its direct-to-consumer (DTC) channel and wholesale channels is expected to have further supported its revenue and margin expansion.

What Our Model Unveils for Crocs Stock

Our proven model does not conclusively predict an earnings beat for Crocs this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Crocs currently has an Earnings ESP of -0.32% and a Zacks Rank #4 (Sell).

CROX’s Valuation Picture

From a valuation perspective, Crocs offers an attractive opportunity, trading at a discount relative to the historical and industry benchmarks. With a forward 12-month price-to-earnings ratio of 7.11X, which is below the five-year high of 34.18X and the Textile - Apparel industry’s average of 10.15X, the stock offers compelling value for investors seeking exposure to the sector.

The recent market movements show that Crocs’ shares have lost 9.1% in the past six months against the industry's 17.6% growth.

CROX Stock's Performance in The Past Six Months

Stocks With the Favorable Combination

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

Under Armour, Inc. UAA has an Earnings ESP of +20.75% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Under Armour’s fourth-quarter fiscal 2025 earnings is pegged at a loss of 9 cents per share, implying a decline of 181.8% from the year-ago quarter. The consensus mark for earnings has been unchanged in the past 30 days. For Under Armour’s quarterly revenues, the consensus mark is pegged at $1.2 billion, which indicates a decrease of 13.1% from the year-ago quarter. UAA delivered an earnings surprise of 98.6% in the last quarter.

Ralph Lauren RL currently has an Earnings ESP of +2.21% and a Zacks Rank of 3. RL is likely to register a top-line increase when it reports fourth-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.6 billion, indicating a 4.1% rise from the figure reported in the prior-year quarter.

The consensus estimate for Ralph Lauren’s earnings is pegged at $1.96 per share, implying a 14.6% jump from the year-ago quarter. The consensus mark for earnings has moved up by 1% in the past 30 days. RL delivered an earnings surprise of 6.5% in the last quarter.

Planet Fitness PLNT presently has an Earnings ESP of +2.79% and a Zacks Rank #3. The company is expected to register an increase in its top and bottom lines when it reports first-quarter 2025 numbers. The Zacks Consensus Estimate for PLNT’s quarterly revenues is pegged at $280.7 million, which indicates growth of 13.2% from the prior-year quarter’s reported figure.

The consensus mark for Planet Fitness’ quarterly earnings remained stable in the past 30 days at 61 cents per share. The estimate indicates an increase of 15.1% from the year-ago quarter. PLNT delivered an earnings surprise of 10.2% in the trailing four quarters, on average.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research