Crocs beats Q2 estimates but shares fall 13% on weak Q3 outlook

Crocs Inc. reported Q2 earnings of $4.55 per share, topping estimates by 5.3%, as the Crocs brand surpassed $1 billion in quarterly revenue for the first time.

"The results reflect broad consumer demand across both brands, healthy direct-to-consumer growth, and strong consumer response to new product innovation," Chief Executive Officer Andrew Rees said.

Revenue rose 2.6% to $1.18 billion, beating the $1.15 billion consensus. The Crocs brand posted $1 billion in revenue, up 4.3% from a year earlier, driven by a 12.9% jump in direct-to-consumer sales to $559 million. Hey Dude revenue fell 5.7% to $179 million, with wholesale dropping 17.2%.

Metric	Actual	Consensus	Beat/Miss
Revenue	$1.18B	$1.15B	+2.8%
EPS	$4.55	$4.32	+5.3%
Crocs Brand Revenue	$1.0B	—	+4.3% YoY

Shares fell 13% in premarket trading as the company's Q3 guidance disappointed. Crocs forecast adjusted earnings of $3.20 to $3.30 per share, below the $3.41 to $3.84 range analysts expected, and projected revenue roughly flat from a year earlier.

The company raised its full-year outlook. Crocs now expects 2026 revenue growth of 1% to 2%, up from its prior forecast of a 1% decline to 1% growth. The Crocs brand is projected to grow 2% to 3%, while Hey Dude is expected to decline 2% to 4% — both improved from prior guidance.

Net income swung to $204.9 million from a loss of $492.3 million a year earlier, when the company recorded an impairment charge related to the Hey Dude brand. Crocs shares have gained 56% year to date, far outpacing the S&P 500's 6.9% advance.

The stock trades at 9.6 times forward earnings, a discount to the textile-apparel industry average of 15.7 times. The company expanded its share repurchase authorization, reflecting confidence in its cash flow generation.

The guidance raise signals management expects continued momentum from the Crocs brand to offset Hey Dude's prolonged reset. Investors will watch the Q3 earnings call for signs of stabilization in the Hey Dude wholesale channel and further margin details.

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