Crocs Inc.’s third-quarter report was so good that investors decided to throw a party, sending its shares up 25.5 percent to close Thursday’s trading session at $150.26.
The company raised its full-year 2026 revenue guidance — its third straight — from up 1 percent to 2 percent to up 3 percent.
“We remain confident in the long-term trajectory of both of our brands and are committed to executing against our strategic pillars to drive diversified growth,” Crocs chief executive officer Andrew Rees told investors during Thursday’s earnings conference call.
The company has good reason to celebrate as it continues to see improvement in the Hey Dude business.
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Nearly a year ago, Crocs elevated 10-year Adidas North America veteran Rupert Campbell — he joined Crocs in March 2025 as Hey Dude’s senior vice president and chief commercial officer — as Hey Dude’s brand president. He’s charged with oversight over turning around the brand’s fortunes. And while there’s been some evidence of green shoots, the second quarter report didn’t reflect enough improvement for investors to get excited about the prospects of a turnaround this year.
That might have changed with Thursday’s third quarter report. Hey Dude’s revenues grew 6 percent for the three months ended Sept. 30, marking an important milestone for the footwear firm that earlier this the year promised to return the brand to growth. Needham’s Tom Nikic noted that the brand’s long-awaited return to growth in the third quarter marked its first positive quarter since the second quarter of fiscal year 2023.
Hey Dude’s revenues in the quarter rose 6.1 percent to $170 million. Direct-to-consumer (DTC) revenue inched up 0.1 percent to $91 million, while wholesale revenues increased 14.0 percent to $79 million. Those numbers indicate that a turnaround could well be underway for the long-struggling brand. Adding another layer of positivity is the shoe firm’s revenue guidance for the brand for full year 2026. The company guided Hey Dude revenues at flat compared to year ago levels. That’s up from previous guidance of down 2 percent to 4 percent.
Rees said the brand has reengineered its cost structure, including high selling prices and better inventory management. He said the quarter also saw “clear signs of positive engagement of our core customer.” And during the quarter, the brand drove engagement through eight collaborations, with each one selling out and signaling the brand’s ability to “deliver culturally relevant product to targeted consumers.” And he noted that Hey Dude’s sandals business has outperformed expectations, while its Work category has also shown some measure of success.
Crocs as a brand also provided positive contributions to the quarter. Crocs revenues rose 4.4 percent to $873 million, with DTC revenues rose 8.2 percent to $510 million, while wholesale revenues slipped 0.5 percent to $382 million. Crocs revenue for fiscal year 2026 was forecasted at up 4 percent, versus prior guidance of up 2 percent to 3 percent.
Rees said on the call that Crocs broadened its relevance across fashion and sport through both new and existing franchises, noting that clog iterations such as the Crafted, Crocbrand, Mellow and Echo franchises “reinforces our conviction that innovation within clogs remains an important lever for future growth.” He also noted growth for the brand in newer categories, such as sandals, which is growing double-digits led by the Miami and Saturday franchises.
Rees said sandals as a market represents an estimated $30 billion global addressable market, and its year-round business gives Crocs a multi-year growth opportunity for the brand. He also said the brand is testing versions of the Ballet flat in Asia and has introduced a closed-heel version of its Mellow franchise, giving the firm opportunities for growth in the recovery and lifestyles space.
BTIG analyst Janine Stichter said the company is “positioning to chase into in-season reorders on key styles,” with product diversification efforts in sandals, mary janes and clogs beyond its Classic silhouette “selling through strongly.”
The two brands combined gave Crocs a third-quarter spike of 48.6 percent in net income to $216.8 million, on a 4.6 percent revenue gain to $1.04 billion.
Both brands have also done well on U.S. TikTok shoe shops. For the 12 months from October 2025 to September 2026, Crocs was the No. 1 footwear brand on TikTok Shop with revenue of $72.1 million, followed by Hey Dude at $41.4 million, according to data from Charm.io. Moreover, data from a UBS report based on credit card, debt card and bank account transactions tracking consumer spending earlier this year showed that Crocs was one of the top three footwear brand winners — along with On and Birkenstock — that garnered share of wallet among European consumers.
