Shares for Crocs Inc dropped over 13 percent on Thursday morning before the markets opened after the company issued third quarter guidance below market expectations despite its solid second quarter.
The Broomfield, Colo.-based footwear company reported consolidated revenues in the second quarter of fiscal 2026 were $1.179 billion, an increase of 2.6 percent from $1.149 billion the same time last year. Net income for the quarter swung to $204.9 million, or $4.55 per diluted share, up from a loss of $492.3 million, or $4.23 per share, in the same time last year.
The results beat analysts’ expectations, which called for net revenues between $1.14 billion and $1.16 billion and earnings per share between $4.20 and $4.51, according to Yahoo Finance.
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By brand, the Crocs label saw revenue in the second quarter increase 4.3 percent to $1.0 billion, marking a first for the brand. Direct-to-consumer revenue rose 12.9 percent to $559 million, while wholesale sales fell 5.0 percent to $441 million. North American revenue increased 0.4 percent to $459 million, while international revenue rose 7.8 percent to $542 million.
Hey Dude revenue fell 5.7 percent to $179 million in the second quarter of 2026. Direct-to-consumer revenue rose 7.2 percent to $96 million, while wholesale sales were down 17.2 percent to $83 million.
Andrew Rees, chief executive officer of Crocs Inc., said in a statement that the company “delivered a stronger-than-expected” second quarter, highlighted by record enterprise revenue, including the Crocs brand surpassing $1 billion in quarterly revenue for the first time ever.
“Our results reflect broad consumer demand across both brands, healthy direct-to-consumer growth, and strong consumer response to new product innovation,” Rees noted. “Based on our strong first half performance, we are again raising our full-year top- and bottom-line guidance.”
Looking ahead, the company did raise its yearly guidance. Crocs now expects revenues for the full fiscal year 2026 to be up approximately 1 percent to 2 percent compared to full year 2025, which is adjusted from its previous guidance of down 1 percent to up 1 percent.
The Crocs brand is now expected to see revenues up approximately 2 percent to 3 percent compared to full year 2025, up from its previous guidance of flat to up 2 percent.
And the Hey Dude brand is now expected to see revenues down approximately 4 percent to 2 percent compared to full year 2025, up from the previous guidance of down 7 percent to 5 percent.
For the third quarter of fiscal 2026, the company is expecting revenues to be approximately flat compared to the same time last year. Adjusted diluted earnings per share are expected to be in the range of $3.20 to $3.30.
This third quarter guidance is below analysts’ expectations, which were looking for warnings per share between $3.41 and $3.84, according to Yahoo Finance.
“Supported by our strong cash flow generation, we remain committed to balancing investment in our brands with disciplined capital allocation, including share repurchase and debt paydown,” Rees added. “Reflecting our confidence in the business and future cash-flow generation, we have expanded our share repurchase authorization as we aim to further return meaningful value to shareholders.”
