February 13, 2026 ·8 min
Crocs Q4-2025 Earnings Note
Q4 margins compressed to 16.8% on a weak North America and a shrinking HeyDude.
In Q4-2025, Crocs earned $161MM operating income (non-GAAP) on $958MM in sales (+3.2% YoY) (operating margin: 16.8%):
| Margin Analysis | Q4-2024 | Q4-2025 |
|---|---|---|
| Gross Margin | 57.9% | 54.7% |
| SG&A % of Revenue | 37.7% | 37.9% |
| Operating Margin | 20.2% | 16.8% |
| Effective tax rate | 16.2% | 16.3% |
| Net Income Margin | 14.8% | 12.4% |
Quarterly margins have developed as follows:
| Company Margins | Q4-23 | Q1-24 | Q2-24 | Q3-24 | Q4-24 | Q1-25 | Q2-25 | Q3-25 | Q4-25 |
|---|---|---|---|---|---|---|---|---|---|
| Gross Margin % | 55.3 | 55.6 | 61.4 | 59.6 | 57.9 | 57.8 | 61.7 | 58.5 | 54.7 |
| Adj. EBIT Margin % | 21.8 | 24.1 | 29.3 | 25.4 | 20.2 | 23.8 | 27.0 | 20.8 | 16.8 |
| Adj. Net Margin % | 26.4 | 16.2 | 20.6 | 18.8 | 14.8 | 17.1 | 21.4 | 14.6 | 12.4 |
Total 2025 free cash flow was $659MM on $4,041MM in sales (FCF margin: 16.3%). They paid down $128MM of debt and repurchased $577MM of common stock (-10% YoY).
| Sales ($MM) | Q4-23 | Q1-24 | Q2-24 | Q3-24 | Q4-24 | Q1-25 | Q2-25 | Q3-25 | Q4-25 |
|---|---|---|---|---|---|---|---|---|---|
| Crocs - North America | 471 | 383 | 489 | 491 | 471 | 369 | 457 | 448 | 436 |
| YoY | 3% | 9% | 3% | 2% | 0% | -4% | -6% | -9% | -7% |
| Crocs - International | 261 | 361 | 425 | 367 | 291 | 393 | 502 | 389 | 332 |
| YoY | 25% | 21% | 19% | 15% | 11% | 9% | 18% | 6% | 14% |
| HeyDude | 228 | 195 | 198 | 204 | 228 | 176 | 190 | 160 | 189 |
| YoY | -18% | -17% | -18% | -17% | 0% | -10% | -4% | -22% | -17% |
| Total | 960 | 939 | 1,112 | 1,062 | 990 | 937 | 1,149 | 996 | 958 |
| YoY | 1.6% | 6.2% | 3.6% | 1.6% | 3.1% | -0.1% | 3.4% | -6.2% | -3.2% |
Inventory at $369MM is +4% in dollars but units are down ‘high-single digits’.
They ended the year with 8,010 employees (corporate: 2,230; retail stores: 4,940; distribution centers: 840). It has 2.9MM ft² of company-operated distribution facilities, and 1.0MM ft² of 3P-operated distribution facilities.
HeyDude was purported to have a $31.67 average selling price in 2025 (+4%). Crocs ASP was -0.1% YoY at $25.4.
| Average Selling Price ($) | Q1-22 | Q2-22 | Q3-22 | Q4-22 | Q1-23 | Q2-23 | Q3-23 | Q4-23 | Q1-24 | Q2-24 | Q3-24 | Q4-24 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Crocs | $21.3 | $22.6 | $23.6 | $24.4 | $21.2 | $25.3 | $27.5 | $27.2 | $23.5 | $26.3 | $26.8 | $26.7 | $25.5 | $25.4 |
| HeyDude | $28.9 | $28.7 | $29.4 | $30.1 | $26.4 | $28.9 | $29.7 | $30.6 | $27.7 | $30.8 | $31.0 | $33.0 | $30.5 | $31.7 |
The new CFO seems open to disclosing more granular data than usual. He says: “Q4-2025 was the 10th consecutive quarter of positive ASP growth YoY, supported by channel and product mix.”
They will not try to expand pricing this year in North America. This implies they will attempt to do so internationally in 2026. CEO: “I would say there are no significant price changes implied in the North American guidance. We have taken select price increases on select products, probably more internationally than North American. And we have taken some price increases on select products within HEYDUDE. But I would say price is not a material driver of our intended 2026 performance.”
They might want to keep pricing consistent. But volume is unlikely to remain so. HeyDude unit volume was -16.7% YoY to 22.5MM pairs in 2025:
| Unit Sales | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| Crocs | 69,087,000 | 102,962,000 | 115,558,000 | 119,577,000 | 127,000,000 | 128,938,000 |
| Growth (YoY) | 49.0% | 12.2% | 3.5% | 6.2% | 1.5% | |
| HeyDude | 30,519,000 | 32,969,000 | 26,950,000 | 22,457,000 | ||
| Growth (YoY) | 8.0% | -18.3% | -16.7% |
In North America, they took two major strategic actions in H2-2025 (according to CEO Andrew Rees):
- “Accelerated returns and markdown allowances to our retailers to improve inventory health while elevating our brand presentation at wholesale”
- “Pulled back on unproductive performance marketing”
The expected result? “They have been effective in cleaning up the channel and establish a more profitable foundation for future growth”.
2025 gross margin was 61.3% (2024: 61.6%). Quarterly margin breakdown is shown below:
| Crocs Brand Only | Q1-23 | Q2-23 | Q3-23 | Q4-23 | Q1-24 | Q2-24 | Q3-24 | Q4-24 | Q1-25 | Q2-25 | Q3-25 | Q4-25 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue ($MM) | 649 | 833 | 799 | 732 | 744 | 914 | 858 | 762 | 762 | 960 | 836 | 768 |
| Gross Margin (%) | 55.8 | 61.9 | 61.9 | 59.4 | 58.1 | 64.1 | 62.5 | 60.9 | 60.7 | 64.1 | 61.8 | 57.8 |
| Operating Margin (%) | 33.60 | 38.14 | 37.24 | 20.33 | 35.51 | 38.90 | 36.51 | 32.69 | 35.93 | 37.35 | 32.61 | 26.93 |
In a refreshing change, management disclosed some granular sales splits between categories:
| Crocs Brand Sales | 2025 | As % of Crocs Brand |
|---|---|---|
| Clogs | $2,461MM | 74% |
| Sandals | $432MM | 13% |
| Jibbitz | $266MM | 8% |
| Other | $166MM | 5% |
| Total | $3,326MM | |
| Gross Margin | 61.3% |
| Q1-23 | Q2-23 | Q3-23 | Q4-23 | Q1-24 | Q2-24 | Q3-24 | Q4-24 | Q1-25 | Q2-25 | Q3-25 | Q4-25 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Crocs Brand Revenue $MM | 649 | 833 | 799 | 732 | 744 | 914 | 858 | 762 | 762 | 960 | 836 | 768 |
| Wholesale ($MM) | 287 | 411 | 407 | 369 | 306 | 462 | 435 | 396 | 315 | 477 | 465 | 294 |
| D2C ($MM) | 362 | 422 | 391 | 363 | 437 | 452 | 423 | 367 | 447 | 483 | 372 | 475 |
| Crocs Brand As % of Company Sales | 73% | 78% | 76% | 76% | 79% | 82% | 81% | 77% | 81% | 83% | 84% | 80% |
| Crocs Growth YoY% | 19% | 14% | 12% | 10% | 15% | 10% | 7% | 4% | 2% | 5% | -3% | 1% |
| Wholesale Growth YoY% | 8% | 19% | 4% | 4% | 7% | 13% | 7% | 7% | 3% | 3% | 7% | -26% |
| D2C Growth YoY% | 30% | 9% | 21% | 16% | 21% | 7% | 8% | 1% | 2% | 7% | -12% | 30% |
For 2026, management anticipates YoY revenue rate in North America to “improve slightly from 2025 run rate as our guidance anticipates that the D2C channel outperforms the wholesale channel”.
Management’s strategy is to attempt to return Crocs North America to growth through:
- Clog iterations and innovation. CEO: “So we are managing the inventory, the Classic Clog carefully in the marketplace. We’ve pulled back on discounting, particularly on the Classic Clog on our digital channels, which is creating some of the headwind. But we are introducing a significant number of new innovative products into the marketplace that are clog-based.”
- Diversification, so growth of sandals and growth outside of clogs, including slippers and personalization. CEO: “We took market share in sandals last year. Very confident we’re going to continue to take market share in 2026 in sandals.”
- Social and digital selling. CEO “We continue to outperform and be the #1 and #2 brand, footwear brand on TikTok Shop. And we’re very confident that our digital prowess and our ability to ignite these”
Sandals are led by strong full-price selling of their Brooklyn, Getaway and Miami sandals. CEO Andrew Rees: “Getaway, Miami and Brooklyn will continue to grow and scale, and we’ve added patents within those franchises. We’ve added colors, and we’ve broadened those franchises, and we think they have global growth trajectory.”
Crocs production (all 3P) continues to be Vietnam-focused. % of 2025 production in Vietnam was 45% (2024: 51%, 2023: 56%). Remainder is from China, Indonesia, India, and Mexico.
2025 gross margin was 44.8% (2024: 47.7%). Total sales were $715MM.
| HeyDude Brand Only | Q1-23 | Q2-23 | Q3-23 | Q4-23 | Q1-24 | Q2-24 | Q3-24 | Q4-24 | Q1-25 | Q2-25 | Q3-25 | Q4-25 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue ($MM) | 235 | 239 | 247 | 228 | 195 | 198 | 204 | 228 | 176 | 190 | 160 | 189 |
| Gross Margin (%) | 49.6 | 47.1 | 35.6 | 44.3 | 46.2 | 49.1 | 47.9 | 47.7 | 46.6 | 50.2 | 42.3 | 39.7 |
| Operating Margin (%) | 32.55 | 27.36 | 12.87 | 16.90 | 20.61 | 21.45 | 12.83 | 12.60 | 13.23 | 16.39 | 4.22 | 3.75 |
Management is attempting to take action to clean up wholesale and reposition. I am unsure which portion of this is 1. management’s choice to reduce wholesale sales, and 2. The wholesaler’s choice to not load up on HeyDude stock.
| Q1-23 | Q2-23 | Q3-23 | Q4-23 | Q1-24 | Q2-24 | Q3-24 | Q4-24 | Q1-25 | Q2-25 | Q3-25 | Q4-25 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| HeyDude Revenue $MM | 235 | 239 | 247 | 228 | 195 | 198 | 204 | 228 | 176 | 190 | 160 | 189 |
| Wholesale ($MM) | 168 | 149 | 147 | 104 | 135 | 114 | 113 | 95 | 111 | 100 | 69 | 56 |
| D2C ($MM) | 68 | 91 | 100 | 124 | 60 | 84 | 91 | 133 | 65 | 90 | 91 | 133 |
| HeyDude As % of Company Sales | 27% | 22% | 24% | 24% | 21% | 18% | 19% | 23% | 19% | 17% | 16% | 20% |
| HeyDude Growth YoY% | 105% | 3% | -8% | -18% | -17% | -18% | -17% | 0% | -10% | -4% | -22% | -17% |
| Wholesale Growth YoY% | 93% | -8% | -19% | -27% | -20% | -24% | -23% | -9% | -18% | -12% | -39% | -41% |
| D2C Growth YoY% | 141% | 30% | 15% | -9% | -11% | -8% | -9% | 7% | 8% | 8% | 0% | 0% |
HeyDude production continues to be shifted to Vietnam. % of 2025 production in Vietnam was 44% (2024: 20%, 2023: 5%). Remainder is from China, Cambodia, Indonesia, and India.
CFO Patraic Reagan on Feb 12th 2026: “D2C is expected to outperform the wholesale channel and improve throughout the year.”
2025 ended with ~2,600 Crocs mono-branded stores and kiosks globally. They sell in 85 countries globally.
Through 2025, the company opened 48 full-sized company-operated Croc stores and 23 new company-operated HeyDude outlets in 2025. Company-operated stores:
| 2024 | 2025 | |
|---|---|---|
| Crocs Full-Price Stores | 87 | 98 |
| Crocs Outlet Stores | 232 | 269 |
| Crocs Kiosks | 71 | 72 |
| HeyDude Outlets | 52 | 75 |
186 of the 439 company-operated Crocs stores are in the US. 2nd is South Korea with 95 (3rd: China with 56).
They will be opening more stores. “see an opportunity to open between 200 - 250 doors, both in our Tier 1 markets and within distributor markets around the world.”
Average market share in China, India, Japan, Germany, and France is 1/3 of market share in established countries (South Korea, US; defined as >2% of shoe market share).
TikTok Shop continues to be a core penetration strategy for ecommerce. In 2025, they launched on 7 markets on TikTok Shop.
Interestingly, digital sales as % of total company sales have remained flat (2025: 37.8% of sales, 2024: 37.2%, 2023: 37.9%). They run 23 company-operated ecommerce websites globally.
India being 1-2% penetrated was quite surprising for me. It’s a sandal + clog friendly culture. But Crocs only has 2 company-operated stores there. Since 2015, they exclusively operate through a franchise agreement with India-based Metro Brands. It’s an 18-year agreement.
As of 2025, Metro operates 219 Crocs-branded India stores across 100 cities (Mar-2021: 149 stores). Average store size is 600 ft². States with the highest stores are 1. Maharashtra (31 stores, this is India’s 2nd most populated state, the world’s 4th most populated, and 1st in India’s GDP), and 2. Karnataka (31 stores). Link for Metro Crocs India. Metro position Crocs as a premium shoe.
Metro is India’s largest footwear retailer (908 stores). It was founded in 1955 and went public in Dec-2021. Metro ended 2025 with a 57.7% gross margin and 14.1% net margin on $277MM of sales. 10.6% of Metro’s sales are online. 55% of their 908 stores are on the high street, and 44% in malls (remainder: airports).
China is now 8% of sales (+30% YoY). There are 56 company-operated Crocs stores in China. Total number of stores in China is 400+. My previous note on everything management has said on China is available here.
According to the new 10K, for the US they have “an incremental tariff of 20%, 20%, 19%, 18%, and 19% on all imports from Vietnam, China, Indonesia, India, and Cambodia, respectively”.
Back in the Q1-2025 earnings call, they mentioned 2025 US-import sourcing mix as: 47% Vietnam, 17% Indonesia, 13% China, 13% India, 5% Mexico, 5% Cambodia.
Management’s new estimation is $80MM annualized expense from tariffs in 2026. This is down from prior estimation of $90MM.
For Q4-2025, they repurchased 2.16MM shares (-4.2% diluted shares QoQ) for $177MM (average price: $83 p/s).
For full 2025, they repurchased 6.5MM shares (-8.4% diluted shares YoY) for $577MM (average price: $88.8 p/s). This compares to 4.3MM shares repurchased for $551MM in 2024.
Crocs ended 2025 with 51.74MM diluted shares outstanding. There was a $747MM repurchase authorization remaining. As of Feb 5th 2026, they had 50.23MM shares outstanding. This means they have repurchased another ~1.5MM shares since year end.
Working Capital: $185.7MM
Of which Cash: $130MM; Inventory valued at: $368MM
Property + Equipment as reported: $238MM
LT Debt: $1,230MM
| Category | Guidance for Q1-2026 | Guidance for FY 2026 | 2025 Figure |
|---|---|---|---|
| Revenue (Total) | -5.5% to -3.5% YoY | -1% to ‘up slightly’ YoY | $4,041MM |
| Crocs Brand Revenue | ‘down low single digits %’ | Flat to +2% YoY | $3,326MM |
| HeyDude Brand Revenue | -18% to -15% | -9% to -7% YoY | $715MM |
| Adj. Operating Margin | 21.5% | >22.3% | 22.3% |
| Adjusted Diluted EPS | $2.67 to $2.77 | $12.88 to $13.35 (excludes impact from future share repurchases) | $12.7 |
| Capital Expenditures | $70MM - $80MM | $51.2MM |
They will also incur ~$62.6MM interest on debt this year.