Crocs, Inc.

Second-quarter enterprise revenue was $1.2 billion, up 2% year over year. Crocs brand revenue was $1 billion, up 4%, and HEYDUDE revenue was $179 million, down 6%. Enterprise adjusted gross margin was 60%, down 170 basis points year over year, with Crocs brand adjusted gross margin at 63.1% (down 100 bps) and HEYDUDE adjusted gross margin at 43.7% (down 650 bps). Adjusted SG&A was $412 million, up 3%, adjusted operating margin was 25.1% (down 180 bps), and adjusted diluted EPS was $4.55, up 8% and above the prior guide of $4.15 to $4.30. For full-year 2026, management raised enterprise revenue growth to 1% to 2%, Crocs brand revenue growth to 2% to 3%, HEYDUDE revenue to down approximately 2% to 4%, adjusted EPS to $13.70 to $14, and still expects adjusted gross margin to be slightly up, adjusted SG&A roughly flat, and adjusted operating margin to expand modestly. Third-quarter guidance calls for revenue approximately flat, Crocs brand revenue up about 1%, HEYDUDE flat to down 3%, adjusted operating margin around 21.5%, and adjusted EPS of $3.20 to $3.30.

Andrew Rees framed the quarter as evidence that both brands are gaining traction through product newness, channel diversification, and more effective marketing. He emphasized sandals, clog diversification, lifestyle footwear, personalization, social commerce, and international growth as the main strategic engines, and repeatedly pointed to strong consumer response and share gains. His tone was confident and upbeat, while acknowledging the company will not return Crocs North America to growth in 2026 and that tariffs remain a headwind.

Patraic Reagan focused on the financial mechanics behind the quarter: stronger-than-expected revenue, 60% enterprise adjusted gross margin, $412 million of adjusted SG&A, 25.1% adjusted operating margin, and $4.55 adjusted EPS. He said the gross margin decline was driven largely by 160 basis points of incremental tariff impact, with Crocs margin also helped by cost savings and international price increases. On cash and capital allocation, he noted just over $170 million in cash and cash equivalents, about $870 million of revolver capacity, inventory of $389 million down 4%, inventory turns above 4x annualized, $251 million of share repurchases, $31 million of debt paydown, and a total buyback authorization now around $2 billion.

Analysts pressed management on the North America Crocs revenue-recognition change with a key marketplace partner, asking how much of the Q3 and full-year guide was driven by accounting versus demand. Management said the shift starts in Q3, is limited to Crocs North America, lowers DTC revenue while raising wholesale revenue, is neutral to units and market share, and slightly benefits operating profit; they would not quantify the exact sales impact. Questions also focused on tariff assumptions, the HEYDUDE Q4 growth step-up, and North America demand trends; management said the guidance already reflects the latest tariff information, HEYDUDE’s second-half acceleration is partly due to weak prior-year comparisons and channel reset actions, and Crocs DTC demand remains positive ex the accounting change.