Things could be looking up for Crocs Inc. in North America when the shoe firm reports second-quarter results on Thursday.
“We believe fundamentals are improving, particularly at Crocs North America,” said Needham analyst Tom Nikic. He said that his firm’s checks “suggest strong demand trends in recent months, which could lead to solid DTC (direct-to-consumer) trends and a future restocking cycle at wholesale.”
The market watcher said Crocs likely had a strong spring and summer, helped by product innovation especially in the sandal business. And if sell-throughs are improving in the DTC channel, then he expects trends could improve at wholesale as well. “We believe that wholesale-channel inventory is lean, giving retailers ‘dry powder’ to reinvest in the Crocs brand over the [next twelve months], if they see that new product introductions are resonating with consumers,” he said.
Nikic also believes there could be reasons for optimism for the Hey Dude brand — including product innovation and strong leadership from former Adidas executive Rupert Campbell, who is Hey Dude’s brand president. And a return to second half growth at the brand would “alleviate a major albatross on valuation,” he concluded.
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BTIG’s Janine Stichter also is expecting better Crocs DTC trends, as well as a lag in wholesale demand catching up. She is forecasting first quarter earnings per share of $4.36, slightly ahead of the consensus estimate of $4.34 and company guidance of between $4.15 and $4.35.
According to Stichter, Crocs has taken the necessary steps to reset market inventory levels and drive higher-quality DTC growth across both the Crocs and Hey Dude brands. But while the focus is squarely on the turnaround for the Crocs brand in North America, Stichter said an inflection to growth is “still likely approximately a year out,” and other headwinds that include competition and wholesale caution could delay that timing.
That said, upcoming catalysts for the brand could include further international expansion in 2026 for the Crocs brand, category expansion outside of clog, also for the Crocs brand, and new unit growth for the Hey Dude brand.
Williams Trading analyst Sam Poser expects Crocs to beat second quarter guidance and consensus estimates.
“Checks indicate that sell through rates and margins are improving for both Crocs and Hey Dude,” Poser said. “As a result, we expect that the DTC momentum for Crocs and Hey Dude, after respectively increasding 12.9 percent and 8.6 percent in [the first quarter], will continue and the wholesale order book for [the second half] will be more robust than it was three-months ago.” He’s also expecting that wholesale orders for Spring 2027 will be up year-over-year.
Poser also said that he wouldn’t be surprise if first quarter 2027 product is delivered in fourth quarter 2026 in geographies with warmer climates for both the Crocs and Hey Dude brands. The one potential negative is on the international front, where Poser said that sales to Middle Eastern countries will likely remain challenged.
Based on spring 2027 product review at FFANY in June, as well as recent channel checks, Poser is forecasting revenue for the Crocs brand for Fiscal Year 2026 to increase 4.0 percent, up from 3.6 percent. He also expects the brand’s wholesale revenue to turn positive in the third quarter, “as Crocs’ wholesale partners write at-once orders in response to the better than expected sell-through rates.”
Another plus is the expectation of ongoing DTC momentum, led by Amazon and the TikTok Shop. And, even better, is the expectation that the recently launched Classic Ballet Flat will become a leading franchise, which could warrant a higher price point than its current $44.99 price tag, as well as more colors than the original three — black, chalk, and blush — that were offered, said Poser.
Poser also believes that the Hey Dude brand has “hit bottom and is poised for growth,” noting that the refocus on the young male consumer and a controlled distribution strategy will begin to drive revenue growth” in the back half of 2026. The Williams Trading analyst said there’s an opportunity for Hey Dude to build its following beyond the Midwest, South and Southeast, noting also that management is working on a plan to build the brand on the East and West Coasts.
Poser doesn’t think the increase in oil prices will impact material costs within fiscal year 2026 because Crocs “has appropriate amount of CrossLite pellets on hand or contracted for to support the balance of the year.” A
nd when the company receives its IEEPA tariff refund that’s expected to be in the $70 million range, Poser is expecting the company to use the refund to buy back stock.
