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Crocs, Inc.

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Business Summary

Crocs, Inc. operates in the casual lifestyle footwear and accessories industry, designing, developing, marketing, distributing, and selling products globally. The company aims to be a world leader in innovative casual footwear, combining comfort and style with value. The company's vision is centered on brands with broad democratic appeal and accessible price points, aligning with global megatrends such as casualization, comfort, and personalization. The company has two reportable operating segments: the Crocs Brand and the HEYDUDE Brand.

The company faces significant competition in the global casual, athletic, and fashion footwear markets. While not directly competing with any single company across its entire product spectrum, portions of its wholesale, retail, and e-commerce businesses compete with companies such as NIKE, Inc., adidas AG, Deckers Outdoor Corporation, Birkenstock Holding plc., Steven Madden, Ltd., Wolverine World Wide, Inc., and V.F. Corporation. The principal elements of competition include brand awareness, product functionality, design, comfort, quality, price, customer service, and marketing and distribution. The company believes its unique footwear designs, material formulations, prices, product line, and distribution networks position it well.

Crocs, Inc. generates revenue through a core business model focused on the design, development, worldwide marketing, distribution, and sale of casual lifestyle footwear and accessories. The company's revenue streams are divided into two primary distribution channels: wholesale and direct-to-consumer (DTC). In 2025, 47.9% of consolidated revenues were derived through the wholesale channel, while 52.1% came from the DTC channel. The wholesale channel includes domestic and international multi-brand retailers, mono-branded partner stores, e-tailers, and distributors. The DTC channel encompasses company-operated e-commerce sites, third-party marketplaces, company-operated full-price retail stores, outlet stores, and kiosks/store-in-store locations. Digital sales, which include company-owned websites, third-party marketplaces, and e-tailers, constituted 37.8% of consolidated revenues in 2025.

The Crocs Brand segment is globally recognized for its molded clog silhouette and has expanded into a wide variety of casual footwear products, including sandals, wedges, flips, and slides. Key product pillars driving long-term growth for the Crocs Brand are clogs, sandals, and Jibbitz™ charms. The vast majority of Crocs™ shoes feature Croslite™ material, a proprietary closed-cell resin technology known for soft, comfortable, and lightweight qualities. The brand also utilizes LiteRide™ and Free Feel Technology™ products, which feature comfort-focused, proprietary foam insoles. In 2025, the Crocs Brand generated revenues of $3.326 billion , representing 1.5% growth compared to 2024. Its income from operations was $1.112 billion , a decrease of 6.0% from 2024. The gross margin for the Crocs Brand was 61.3% in 2025.

The HEYDUDE Brand segment is known for its iconic and versatile loafer silhouette, focusing on casualization, comfort-led functionality, and personalization. HEYDUDE also offers apparel and accessories. The brand utilizes leading technologies, including a flex-and-fold outsole and ergonomic insole, known for being lightweight, flexible, and soft. In 2025, the HEYDUDE Brand generated revenues of $714.840 million , a decrease of 13.3% compared to 2024. The HEYDUDE Brand reported a loss from operations of $668.855 million in 2025, a decrease of 586.8% compared to 2024. The gross margin for the HEYDUDE Brand was 44.8% in 2025.

For the fiscal year ended December 31, 2025, total revenues were $4.041 billion , a 1.5% decrease compared to the prior year. Gross profit was $2.357 billion , resulting in a gross margin of 58.3% . Operating income was $149.515 million , with an operating margin of 3.7% . The company reported a net loss of $81.198 million , leading to a diluted EPS of $(1.50) . Cash and cash equivalents stood at $130.354 million as of December 31, 2025. Total long-term borrowings were $1.231 billion (net of $31.115 million of unamortized issuance costs). Cash provided by operating activities was $710.431 million .

Comparing 2025 to 2024, total revenues decreased by $61.461 million , or 1.5% . This was primarily due to a $87.4 million decrease in HEYDUDE Brand unit sales volume, partially offset by a $16.5 million increase from higher average selling price (ASP) on a constant currency basis for the HEYDUDE Brand, and $9.4 million from net favorable foreign currency fluctuations. Gross margin decreased by 50 basis points from 58.8% in 2024 to 58.3% in 2025, mainly due to unfavorable duties and higher freight and fulfillment costs. Selling, general and administrative expenses increased by $105.2 million , or 7.7% . Income from operations decreased by $872.396 million , or 85.4% . The company shifted from a net income of $950.071 million in 2024 to a net loss of $81.198 million in 2025.

Significant operational developments in 2025 included the growth of Crocs Brand revenues by 1.5% , while HEYDUDE Brand revenues decreased by 13.3% . The company incurred $738.1 million in asset impairments, primarily due to the partial impairment of the HEYDUDE indefinite-lived trademark ($430.0 million ) and HEYDUDE Brand reporting unit goodwill ($307.0 million ). The company achieved approximately $50 million of gross cost savings and incurred charges of just over $14 million related to operational workforce reductions. The company repurchased 6.5 million shares of its common stock at a cost of $577.2 million . As of December 31, 2025, the company operated 439 Crocs Brand stores and 75 HEYDUDE Brand stores globally.

Business Outlook

Management anticipates several trends will continue to impact future operating results, including ongoing consumer pressure on discretionary spending due to elevated interest rates, inflation, and expected price increases. Wholesale partners are also acting cautiously, and geopolitical tensions have increased globally. The company is monitoring developments related to U.S. tariffs on foreign imports, which include an incremental tariff of 20% on imports from Vietnam and China, 19% from Indonesia, 18% from India, and 19% from Cambodia. The company is mitigating these impacts through diversifying its sourcing mix, refining its cost structure, and implementing select price increases.

The company has taken cost-saving actions designed to simplify the organization and reduce its cost base, achieving approximately $50 million of gross cost savings for the year ended December 31, 2025. Additionally, approximately $100 million of gross cost savings have been identified for 2026. In connection with these initiatives, charges of just over $14 million were incurred in 2025, primarily related to operational workforce reductions.

The company is prioritizing a return to growth in North America for both brands, while also making progress on long-term strategic initiatives. For the Crocs Brand, this growth is expected to be driven by product innovation, diversification within key product categories, growth in the sandals business, and stricter segmentation and pricing discipline across the marketplace. For the HEYDUDE Brand, the focus is on refining marketing toward target consumers, concentrating on the core product offering, and refreshing the marketplace. Scaling digital capabilities remains a priority for both brands.

The company's liquidity position remains strong, with approximately $130.4 million in cash and cash equivalents and $952 million in available borrowing capacity as of December 31, 2025. Total borrowings were $1.2 billion as of the same date. The company believes that its cash flows from operations, cash and cash equivalents on hand, and available borrowings will be sufficient to meet ongoing liquidity needs and capital expenditure requirements for at least the next twelve months.

The company's material future cash obligations as of December 31, 2025, include $1.262 billion for debt obligations, $238.9 million for interest on debt obligations, $274.2 million for purchase commitments, and $460.8 million for lease obligations. These total $2.236 billion .

Risk Factors

The company faces a range of material risks, including substantial dependence on brand value, significant competition, and difficulties in successfully introducing new products. Global economic conditions, including tariffs and inflation, may adversely affect consumer spending and the financial health of customers. Ongoing wars could cause disruptions in the global economy and negatively impact business, while pandemics or public health emergencies could have a material adverse impact on operations and liquidity. Supply chain disruptions, dependence on third-party manufacturers outside the U.S., and the inability to accurately forecast consumer demand are also critical. Changes in foreign exchange rates, particularly the Euro, South Korean Won, and Chinese Yuan, could materially affect financial results. Government actions and regulations, such as export restrictions, tariffs, and other trade protection measures, could adversely affect the business, with the U.S. having imposed incremental tariffs of 20% on imports from Vietnam and China, 19% from Indonesia, 18% from India, and 19% from Cambodia. The company also faces risks related to its reliance on information technology, the increasing prevalence of artificial intelligence, and the effective functioning of online e-commerce sites. Indebtedness, including $1.231 billion in total outstanding indebtedness as of December 31, 2025, imposes significant operating and financial restrictions. Impairments of long-lived assets, goodwill, and other intangible assets, such as the $430.0 million impairment for the HEYDUDE trademark and $307.0 million for HEYDUDE Brand reporting unit goodwill in 2025, could materially affect financial results. Quarterly revenues and operating results are subject to fluctuation, and maintaining significant cash abroad poses risks. Changes in tax laws and unanticipated tax liabilities, including those from the One Big Beautiful Bill Act (OBBBA) and the OECD's Pillar Two global minimum tax framework, could adversely affect the effective income tax rate and profitability.

Management Priorities

Management's message to shareholders emphasizes operating in an environment where consumers are affected by elevated interest rates, inflation, and expected price increases, leading to pressure on discretionary spending and cautious behavior from wholesale partners. Geopolitical tensions are also noted as an increasing factor. The company has implemented cost-saving actions, achieving approximately $50 million in gross cost savings for 2025 and identifying approximately $100 million for 2026. Strategic priorities include returning to growth in North America for both brands, driven by product innovation, diversification within key product categories, growth in the sandals business, and stricter segmentation and pricing discipline for the Crocs Brand. For the HEYDUDE Brand, the focus is on refining marketing, concentrating on core product offerings, and refreshing the marketplace. Across the portfolio, scaling digital capabilities remains a priority.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Our Vision
  2. [2] Item 1, Business — Our Vision
  3. [3] Item 1, Business — Our Vision
  4. [4] Item 1, Business — Distribution Channels
  5. [5] Item 1, Business — Distribution Channels
  6. [6] Item 1, Business — Our Vision
  7. [7] Item 7, MD&A — Reportable Operating Segments
  8. [8] Item 7, MD&A — Reportable Operating Segments
  9. [9] Item 7, MD&A — Reportable Operating Segments
  10. [10] Item 7, MD&A — Reportable Operating Segments
  11. [11] Item 7, MD&A — Reportable Operating Segments
  12. [12] Item 7, MD&A — Reportable Operating Segments
  13. [13] Item 7, MD&A — Reportable Operating Segments
  14. [14] Item 7, MD&A — Reportable Operating Segments
  15. [15] Item 7, MD&A — Reportable Operating Segments
  16. [16] Item 7, MD&A — Reportable Operating Segments
  17. [17] Item 7, MD&A — 2025 Financial and Operational Highlights
  18. [18] Item 7, MD&A — 2025 Financial and Operational Highlights
  19. [19] Item 7, MD&A — Results of Operations Comparison of the Years Ended December 31, 2025, and 2024
  20. [20] Item 7, MD&A — Results of Operations Comparison of the Years Ended December 31, 2025, and 2024
  21. [21] Item 7, MD&A — Results of Operations Comparison of the Years Ended December 31, 2025, and 2024
  22. [22] Item 7, MD&A — Results of Operations Comparison of the Years Ended December 31, 2025, and 2024
  23. [23] Item 7, MD&A — 2025 Financial and Operational Highlights
  24. [24] Item 7, MD&A — 2025 Financial and Operational Highlights
  25. [25] Item 7, MD&A — Liquidity and Capital Resources
  26. [26] Item 7, MD&A — Liquidity and Capital Resources
  27. [27] Item 7, MD&A — Liquidity and Capital Resources
  28. [28] Item 7, MD&A — Consolidated Statements of Cash Flows
  29. [29] Item 7, MD&A — Results of Operations Comparison of the Years Ended December 31, 2025, and 2024
  30. [30] Item 7, MD&A — Results of Operations Comparison of the Years Ended December 31, 2025, and 2024
  31. [31] Item 7, MD&A — Revenues
  32. [32] Item 7, MD&A — Revenues
  33. [33] Item 7, MD&A — Revenues
  34. [34] Item 7, MD&A — Gross margin
  35. [35] Item 7, MD&A — Gross margin
  36. [36] Item 7, MD&A — Gross margin
  37. [37] Item 7, MD&A — Selling, general and administrative expenses
  38. [38] Item 7, MD&A — Selling, general and administrative expenses
  39. [39] Item 7, MD&A — Results of Operations Comparison of the Years Ended December 31, 2025, and 2024
  40. [40] Item 7, MD&A — Results of Operations Comparison of the Years Ended December 31, 2025, and 2024
  41. [41] Item 7, MD&A — Results of Operations Comparison of the Years Ended December 31, 2025, and 2024
  42. [42] Item 7, MD&A — Results of Operations Comparison of the Years Ended December 31, 2025, and 2024
  43. [43] Item 7, MD&A — 2025 Financial and Operational Highlights
  44. [44] Item 7, MD&A — 2025 Financial and Operational Highlights
  45. [45] Item 7, MD&A — 2025 Financial and Operational Highlights
  46. [46] Item 7, MD&A — 2025 Financial and Operational Highlights
  47. [47] Item 7, MD&A — 2025 Financial and Operational Highlights
  48. [48] Item 7, MD&A — Known or Anticipated Trends
  49. [49] Item 7, MD&A — Known or Anticipated Trends
  50. [50] Item 7, MD&A — Stock Repurchases
  51. [51] Item 7, MD&A — Stock Repurchases
  52. [52] Item 7, MD&A — Store Locations and Digital Sales Percentage
  53. [53] Item 7, MD&A — Store Locations and Digital Sales Percentage
  54. [54] Item 7, MD&A — Known or Anticipated Trends
  55. [55] Item 7, MD&A — Known or Anticipated Trends
  56. [56] Item 7, MD&A — Known or Anticipated Trends
  57. [57] Item 7, MD&A — Known or Anticipated Trends
  58. [58] Item 7, MD&A — Known or Anticipated Trends
  59. [59] Item 7, MD&A — Known or Anticipated Trends
  60. [60] Item 7, MD&A — Known or Anticipated Trends
  61. [61] Item 7, MD&A — Known or Anticipated Trends
  62. [62] Item 7, MD&A — Known or Anticipated Trends
  63. [63] Item 7, MD&A — Known or Anticipated Trends
  64. [64] Item 7, MD&A — Contractual Obligations
  65. [65] Item 7, MD&A — Contractual Obligations
  66. [66] Item 7, MD&A — Contractual Obligations
  67. [67] Item 7, MD&A — Contractual Obligations
  68. [68] Item 7, MD&A — Contractual Obligations
  69. [69] Item 1A, Risk Factors — Government actions and regulations, such as export restrictions, tariffs, and other trade protection measures, could adversely affect our business.
  70. [70] Item 1A, Risk Factors — Government actions and regulations, such as export restrictions, tariffs, and other trade protection measures, could adversely affect our business.
  71. [71] Item 1A, Risk Factors — Government actions and regulations, such as export restrictions, tariffs, and other trade protection measures, could adversely affect our business.
  72. [72] Item 1A, Risk Factors — Government actions and regulations, such as export restrictions, tariffs, and other trade protection measures, could adversely affect our business.
  73. [73] Item 1A, Risk Factors — Our substantial indebtedness could adversely affect our business, financial condition, and results of operations, as well as the ability to meet payment obligations under our Revolving Credit Agreement, the Term Loan B Credit Agreement, and the Notes (as defined below).
  74. [74] Item 1A, Risk Factors — We may incur impairments of the carrying value of our goodwill and other intangible assets, which could have a material adverse effect on our business and financial results.
  75. [75] Item 1A, Risk Factors — We may incur impairments of the carrying value of our goodwill and other intangible assets, which could have a material adverse effect on our business and financial results.
  76. [76] Item 7, MD&A — Known or Anticipated Trends
  77. [77] Item 7, MD&A — Known or Anticipated Trends

Analysis on 5/22/2026