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Yahoo
4 days ago
- Business
- Yahoo
Crocs reports ‘solid' Q2, predicts Q3 FY25 sales dip on uncertainty
In Q3 2025, Crocs anticipates a revenue decrease of roughly 11% to 9% compared to the same period in 2024, based on currency rates from 4 August. It also expects an adjusted operating margin between 18% and 19%. The forecast includes an expected negative impact from tariffs which could affect margins by roughly 170 basis points. The sales warning comes as it registered the 'highest ever' gross profit at $708.84m in the second quarter, up from $681.92m in the prior-year period. The company's gross margin improved 30 basis points to 61.7% of sales during the quarter compared to 61.4% in the same period a year ago. Crocs' consolidated revenues saw an increase of 3.4%, reaching $1.15bn. This growth was driven by a 5.0% rise in Crocs brand revenues to $960m but offset by the 3.9% decline in its Heydude brand. Direct-to-consumer revenues grew by 4.0%, and wholesale revenues increased by 2.8%. "We reported a solid second quarter with both our Crocs and Heydude brands contributing to our performance, while delivering the highest ever gross profit quarter in company history. Our strong cash flow generation enabled us to return shareholder value through $133m in share repurchases, and $105m in debt paydown," Crocs chief executive officer Andrew Rees said. Crocs key metrics in Q2 FY25 Crocs reported a loss from operations of $428m, a stark contrast to the $326m income from operations in the same quarter last year. This resulted in an operating margin loss of 37.2%. Adjusted income from operations saw a slight decrease of 5% to $309m. Diluted loss per share stood at $8.82, down significantly from earnings per share of $3.77 in the previous year, again impacted by asset impairments. Adjusted diluted earnings per share saw an increase of 5.5% to $4.23. The company faced operational headwinds with selling, general, and administrative expenses surging to $1.14bn, a substantial increase from $356m in the previous year, representing 98.9% of revenues compared to the prior 32%. This surge was primarily due to noncash impairment charges related to Heydude trademarks and goodwill totalling $737m. During the quarter, Crocs repaid $105m of debt. Crocs outlook The company had already withdrawn its financial projections for the full year in May this year, due to the unpredictable nature of global trade policies and their impact on economic conditions. Crocs has already realised $50m in cost reductions and is planning to cut back on inventory orders. It intends to limit promotional activities as a strategy to maintain the brand's integrity within the market. 'Although these actions will impact the topline of our business in the short term, they will position our business to win, drive margin dollars, and support continued cash flow generation longer term," Rees added. "Crocs reports 'solid' Q2, predicts Q3 FY25 sales dip on uncertainty" was originally created and published by Just Style, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Fibre2Fashion
4 days ago
- Business
- Fibre2Fashion
US' Crocs delivers strong Q2, but projects 9â11% revenue dip in Q3
American casual footwear company Crocs has reported consolidated revenues of $1.15 billion in the second quarter (Q2) for fiscal 2025 (FY25), up 3.4 per cent year-over-year (YoY). It marked the highest gross profit of $708.84 million in its history with direct-to-consumer (DTC) sales growing 4 per cent and wholesale revenues increasing 2.8 per cent. The adjusted gross margin rose to 61.7 per cent. The company also posted a reported operating loss of $428 million, primarily due to non-cash impairment charges totalling $737 million related to the Heydude trademark and goodwill. The adjusted income from operations declined 5 per cent to $309 million, while adjusted diluted earnings per share rose 5.5 per cent to $4.23, Crocs said in a press release. Crocs has reported revenue of $1.15 billion in Q2 FY25, up 3.4 per cent YoY, with record gross profit and a 61.7 per cent adjusted gross margin. Despite a $428 million operating loss due to Heydude impairments, adjusted EPS rose 5.5 per cent to $4.23. The company expects Q3 revenue to decline by 9â€'11 per cent, citing global trade uncertainty and tightening consumer conditions. Brand-wise, Crocs posted a revenue of $960 million, a 5 per cent increase YoY, driven by an 18.1 per cent surge in international markets that offset a 6.5 per cent decline in North America. Meanwhile, Heydude brand saw revenue fall of 3.9 per cent to $190 million, with wholesale revenue dropping 12.4 per cent, although DTC sales improved by 7.6 per cent. 'We reported a solid second quarter with both our Crocs and Heydude brands contributing to our performance, while delivering the highest ever gross profit quarter in company history. Our strong cash flow generation enabled us to return shareholder value through $133 million in share repurchases, and $105 million in debt paydown,' said Andrew Rees, chief executive officer (CEO) at Crocs . As of June 30, 2025, the company held $201 million in cash, inventories of $405 million, and reduced total borrowings to $1,379 million. Capital expenditures were $32 million for the quarter. 'While we are pleased by this performance, the current operating environment is uncertain and challenging to predict. Against this, we have chosen to focus on managing expenses including the $50 million in cost savings we have already implemented, reducing our inventory receipts, and pulling back on promotional activity to protect brand health in the marketplace,' added Rees. 'Although these actions will impact the topline of our business in the short term, they will position our business to win, drive margin dollars, and support continued cash flow generation longer term.' Looking ahead, Crocs has issued guidance only for the third quarter (Q3), citing global trade uncertainty and consumer-related pressures. The company is expecting revenues to decline by 11 to 9 per cent YoY and anticipates an adjusted operating margin of 18 to 19 per cent, including a 170 basis-point headwind from existing and anticipated tariffs, added the release. Fibre2Fashion News Desk (SG)
CNBC
4 days ago
- Business
- CNBC
Crocs CEO says consumer environment is 'concerning,' will reduce orders in the second half
Casual footwear company Crocs plans to reduce orders for the second half of the year amid what its CEO called a "concerning" environment for the consumer. "We see the U.S. consumer behaving cautiously around discretionary spending. They are faced with current and implied future price increases, which we think has the potential to be a further drag on an already choiceful consumer. Against this backdrop, our retail partners are acting more carefully and reducing their open-to-buy dollars in future seasons," said CEO Andrew Rees on the company's second-quarter earnings call this week, according to a FactSet transcript. "The current environment in the second half is concerning, and we see that clearly reflected in retail order books. We strongly believe this is a time to make bold decisions for the future to sustain and advance a durable cash flow mode," Rees added. Shares of Crocs shed nearly 30% Thursday after the company issued the stark warnings and posted a weaker-than-expected forecast for the current quarter. Thursday's losses made for the stock's worst day since October 2011. Crocs imports most of its products from countries like Vietnam, China, Indonesia and Cambodia that are now subject to steep import tariffs. Rees said the company is taking steps to protect profitability, including pulling back on promotional activity across retailers and taking back some of its older inventory, specifically for its Heydude shoe brand, in order to "reset" retail partners with new stock. "This will create further headwinds to sales volume over the next several quarters," Rees said on the earnings call. Rees said in an earnings release Crocs had previously implemented $50 million in cost savings. "Although these actions will impact the topline of our business in the short term, they will position our business to win, drive margin dollars, and support continued cash flow generation longer term," he said in a release. The company is projecting third-quarter revenue well below Wall Street estimates. Crocs expects revenue for the current quarter to shrink between 9% to 11% year over year. Analysts surveyed by LSEG expected revenue to be slightly higher over the year earlier. Crocs is also forecasting a third-quarter adjusted operating margin of around 18% to 19%, down from 25.4% in the third-quarter a year prior. The company declined to issue full-year guidance. For the second quarter, Crocs reported a net loss of $492.3 million, or $8.82 per share, compared to a net income of $228.9 million, or $3.77 per share, during the same period a year earlier. That loss was driven by a $737 million non-cash impairment charge related to its Heydude brand. Excluding that charge and accounting for other one-time items, the company posted adjusted earnings of $4.23 per share, topping Wall Street expectation for $4.01 per share, according to LSEG. Revenue came in at $1.15 billion, an increase of 3.4% over the year prior and in line with the LSEG estimate of $1.14 billion.
Yahoo
02-07-2025
- Business
- Yahoo
Goldman cautious on mid cap athleisure, starts Crocs, Deckers at Sell
-- Goldman Sachs began coverage of mid‑cap U.S. athleisure names with a cautious stance, arguing that stiffer competition and fickle consumer demand will separate winners from laggards in the crowded footwear and sportswear arena. The brokerage started Deckers Outdoor (NYSE:DECK) and Crocs (NASDAQ:CROX) with Sell ratings, setting price targets of $90 and $88, implying about 15% and 18% downside, respectively. It initiated Under Armour (NYSE:UA) at Neutral with a $7 target, roughly in line with the current share price. Analysts said the athletic market still benefits from health‑and‑wellness trends and shorter product replacement cycles, but recent shifts in sneaker styles and heavier promotional activity have made it harder for brands to hold pricing power. Nike's slowdown, they added, is reshuffling shelf space and market‑share opportunities for rivals. Deckers, owner of Hoka running shoes and Ugg boots, has 'strong brands and room to expand overseas,' Goldman wrote, but faces 'accelerating competition, particularly in running,' just as signs of cooling momentum emerge. For Crocs, Goldman likes the company's marketing flair and product pipeline yet sees 'normalizing demand' for its classic clog and continued growing pains at the Heydude label limiting sales and margins. The brokerage is more balanced on Under Armour, praising a strategic overhaul that prioritizes product discipline and channel mix. Still, it sees 'limited visibility' on when North American sales will re‑accelerate, a hurdle that could keep the stock range‑bound until the brand shows clearer progress. Goldman uses a framework that weighs brand strength, margin trajectory and sales channels to rank stock opportunities. In the near term, the firm expects rising competition and shifting shopper preferences to create 'bifurcated single‑stock outcomes' rather than a broad sector rally. Related articles Goldman cautious on mid cap athleisure, starts Crocs, Deckers at Sell Amazon stock target raised at Truist on expected beat and raise quarter Trump strikes trade deal with Vietnam, imposes 20% tariff Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Fashion Network
13-05-2025
- Business
- Fashion Network
Crocs posts strong Q1 2025 results, withdraws full-year outlook
Crocs Inc. announced on Thursday a revenue increase of 1.4% in its first quarter, on the back of an increase in sales at its flagship brand. The Broomfield, Colorado-based footwear firm said revenues for the first quarter ended March 31, reached $937 million. Direct-to-consumer revenues grew 2.3%, while wholesale revenues contracted 1.6%. By brand, Crocs revenues increased 2.4% to $762 million, with both DTC and wholesale revenues up 1.1% to $285 million and 3.2% to $477 million, respectively. Revenue was partially offset by Heydude brand sales, the casual footwear brand acquired by Crocs in 2022, where revenues decreased 9.8% to $176 million. DTC revenues increased 8.3% to $65 million, while wholesale revenues decreased 17.9% to $111 million. "We are incredibly proud of our better-than-expected first quarter performance despite what has been an increasingly volatile macroeconomic backdrop since the onset of the year. Both our Crocs and Heydude brands contributed to the outperformance with gross margins, operating margins, adjusted earnings per share, and cash flow coming in above plan," said Andrew Rees, chief executive officer, Crocs. The company withdrew its previous guidance issued in February, due to macroeconomic uncertainties stemming from global trade policies. No revised full-year outlook has been provided. "While we are pleased by the performance of our overall business in April, the new global trade environment as well as business and consumer uncertainty, has made it challenging to predict how consumers may respond in the future. Amid this heightened operating backdrop, we are withdrawing our guidance for 2025,' added Rees.
