Listen to the article
3 min
This audio is auto-generated. Please let us know if you have feedback.
Dive Brief:
Crocs did better than expected in Q4, as consolidated revenues dropped 3.2% year over year to $958 million, with direct-to-consumer sales up 4.7% and wholesale down 14.5%. Gross margin contracted to 54.7% compared to 57.9% last year. Net income plunged over 71% to $105.2 million.
Even its struggling Heydude brand outperformed, with revenues down 17% to $189 million. Crocs brand revenues rose slightly to $768 million, rounding out its eighth straight year of growth.
Crocs ended the year with about 2,600 stores and kiosks. In 2026 the plan is to further expand the brand’s footprint internationally, with “an opportunity to open between 200 and 250 doors,” CEO Andrew Rees told analysts Thursday.
Dive Insight:
The Crocs clog silhouette has arguably achieved classic status — the brand is the market share leader in clogs, which make up three-quarters of its product mix, Rees said. But the company is also leaning into new styles for both of its brands.
“We believe continued newness in our existing franchises, along with the introduction of our new Saturday franchise and updated personalizable two-strap sandal, underscores an opportunity to gain further market share in this category,” Rees said.
Both brands, but especially Heydude, have been buoyed by their presence on social media. Crocs is the No. 1 footwear brand on TikTok Shop in the U.S., according to Rees, who anticipates “significant future growth in social selling, including on this platform.” Last year the brand launched via TikTok Shop in seven markets globally and plans more this year, he said.
Crocs and Heydude are both prominent on the platform, and that has helped spur improvement in Heydude’s DTC channel, according to M Science Research Analyst Drake MacFarlane.
“Heydude’s path ahead still appears rocky given the wholesale cleanup actions management has discussed previously, but the DTC result for Heydude is a positive,” MacFarlane said in emailed comments.
Executives sought to temper expectations for 2026, telling analysts that progress would be most evident later in the year. This is especially true for Heydude, which should return to growth in the second half of 2026. All told, for the full year, the company expects revenues this year to fall about 1% or be up slightly, compared to full-year 2025. Crocs revenue is expected to be flat or rise as much as 2%, and Heydude to be down 7% to 9%.
This “assumes steady improvement without sacrificing margins,” Needham analysts led by Tom Nikic said in emailed comments Thursday.
Tariffs continue to be a factor for Crocs. The company, which has largely avoided raising prices to mitigate the impact of new import duties, now expects a tariff-related headwind of about $80 million on an annualized basis, down from its previous estimate of $90 million.