Crocs Hits $1B Quarterly Revenue, Stock Falls on Weak Guidance

Crocs reported record second-quarter revenue of $1.18 billion, up 2.6% year-over-year, with the Crocs brand surpassing $1 billion in quarterly revenue for the first time at $1.0 billion. The HEYDUDE brand brought in $179 million, down 5.7%. Net income was $204.9 million, compared to a net loss of $492.3 million in the prior year due to impairment charges. Adjusted diluted EPS was $4.55, beating analyst estimates of $4.20-$4.51. Direct-to-consumer sales for Crocs rose 12.9% to $559 million, while wholesale fell 5.0% to $441 million. International revenue grew 7.8% to $542 million, North America was flat at $459 million. For HEYDUDE, DTC grew 7.2% to $96 million, wholesale slid 17.2% to $83 million. CEO Andrew Rees cited broad consumer demand and innovation. Full-year revenue outlook raised to 1%-2% growth, adjusted EPS guidance to $13.70-$14.00. However, Q3 guidance of roughly flat revenue and EPS of $3.20-$3.30 missed the $3.53 consensus, causing an 11% stock drop. CFO Patraic Reagan noted that prior-year moves will pay off more in Q4. The board approved a $1.5 billion share repurchase increase, bringing total authorization to ~$2 billion; the company repurchased 2.3 million shares for $251 million in Q2.