Executive Summary

Q1 2025 delivered a broad beat vs internal guidance and Street: revenue $0.94B grew ~1% YoY; adjusted diluted EPS $3.00, gross margin 57.8%, and adjusted operating margin 23.8% all came in above plan . Compared to S&P Global consensus, revenue beat by ~$29.4M*, EPS beat by ~$0.51*, and EBITDA exceeded by ~$25.3M*.
Management withdrew full-year 2025 guidance due to uncertainty from evolving global trade/tariff policy, noting potential annualized cash cost impacts of ~$45M (10% tariff case) to ~$130M (145% China tariff plus 10% elsewhere) based on current sourcing mix .
Crocs brand strength continued (revenues +2.4% YoY to $0.76B; international +8.9% to $0.39B), while HEYDUDE remained down YoY (-9.8% to $0.18B) but saw DTC acceleration (+8.3%) and ASP growth .
Capital allocation remained active: ~$61M repurchases in Q1 (607K shares), with ~$1.3B authorization remaining; total borrowings $1.48B with leverage within the 1–1.5x target .

Values retrieved from S&P Global for estimates marked with *.

What Went Well and What Went Wrong

What Went Well

Broad beats vs plan: adjusted EPS $3.00, adjusted operating margin 23.8%, cash flow metrics ahead of plan; CEO: “both our Crocs and HEYDUDE brands contributed to the outperformance… margins, adjusted EPS, and cash flow coming in above plan” .
Crocs brand international momentum: China grew “more than 30%,” Western Europe strong (France and Germany); Crocs was #1 footwear brand on TikTok Shop; Rees: “In Q1, we achieved 12% revenue growth in international” .
Gross margin resilience: enterprise 57.8% (+180 bps YoY), Crocs brand 60.7% (+260 bps) driven by lower product costs and favorable mix; management confident in sustainability ex-tariffs .

What Went Wrong

Guidance withdrawal due to tariff/macro uncertainty, creating visibility overhang; management highlighted scenarios showing sizable cash cost risk and potential demand softness .
HEYDUDE still down YoY (-9.8% revenue), wholesale -17.9%; brand stabilization ongoing despite DTC acceleration (+8.3%) and ASP increases .
SG&A deleverage: adjusted SG&A rate 34.0% (+520 bps YoY) as the company continued to invest in marketing, DTC, and talent to support long-term share gains .

Financial Results

Key metrics by quarter (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$1,062.2	$989.8	$937.3
Diluted EPS ($USD)	$3.36	$6.36	$2.83
Adjusted Diluted EPS ($USD)	$3.60	$2.52	$3.00
Gross Margin %	59.6%	57.9%	57.8%
Operating Margin %	25.4%	20.2%	23.8%
Adjusted Operating Margin %	25.4%	20.2%	23.8%

Q1 2025 actuals vs S&P Global consensus

Metric	Actual Q1 2025	Consensus	Surprise
Revenue ($USD Millions)	937.3	907.9	+29.4
Primary EPS ($USD)	3.00	2.49	+0.51
EBITDA ($USD Millions)	241.5	216.2	+25.3

Values retrieved from S&P Global.

Segment and channel breakdown (Q1 2025)

Segment/Channel	Revenue ($USD Millions)
Crocs Brand – Total	$761.6
- DTC	$284.8
- Wholesale	$476.8
Crocs – North America Total	$368.5
- DTC	$197.8
- Wholesale	$170.7
Crocs – International Total	$393.1
- DTC	$87.0
- Wholesale	$306.1
HEYDUDE – Total	$175.7
- DTC	$65.0
- Wholesale	$110.7

KPIs (Q1 2025)

KPI	Value
Cash and Cash Equivalents	$166.5M
Inventories	$391.3M
Total Borrowings	$1,481.7M
Free Cash Flow	-$82.6M
Share Repurchases	0.607M shares; $60.9M
Non-GAAP Effective Tax Rate	17.2%

Guidance Changes

Metric	Period	Previous Guidance (Feb 13, 2025)	Current Guidance (May 8, 2025)	Change
Revenue Growth (Enterprise)	FY 2025	+2% to +2.5% reported; +3.5% to +4% CC	Withdrawn	Withdrawn
Crocs Brand Revenue Growth	FY 2025	~+4.5%	Withdrawn	Withdrawn
HEYDUDE Revenue Growth	FY 2025	-9% to -7%	Withdrawn	Withdrawn
Adjusted Operating Margin	FY 2025	~24.0% (≈ -60 bps FX/tariffs)	Withdrawn	Withdrawn
Non-GAAP Effective Tax Rate	FY 2025	~18.0%	Withdrawn	Withdrawn
Adjusted Diluted EPS	FY 2025	$12.70–$13.15	Withdrawn	Withdrawn
Capital Expenditures	FY 2025	$80–$100M	Withdrawn	Withdrawn

Management also illustrated tariff scenarios: ~10% incremental tariff → ~$45M annualized cash cost; 145% China tariff plus 10% elsewhere → ~$130M annualized, based on current sourcing mix .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2: Q3 2024; Q-1: Q4 2024)	Current Period (Q1 2025)	Trend
Tariffs/Macro	Q3: Outlook reset for HEYDUDE; margins strong; standard FX/tariff disclosures . Q4: FY25 guide embeds incremental tariffs; detailed Crocs/HEYDUDE China/Mexico exposure .	Guidance withdrawn; tariff scenarios quantified ($45M/$130M); mitigation levers (sourcing mix, costs, pricing) .	Escalating uncertainty; proactive mitigation.
Product Performance (Crocs)	Q3: Crocs +7.4%; int’l +15.5%; DTC +7.7% . Q4: Crocs +4%; China accelerated; sandal franchises expanding .	Crocs +2.4% total; int’l +8.9% (China >30%); DTC +1.1%; wholesale +3.2% .	Continued int’l momentum; NA prudence.
Product Performance (HEYDUDE)	Q3: -17.4% revenue; wholesale pressure; DTC down . Q4: flat YoY; DTC +7%; stabilization actions; ASP up .	-9.8% revenue; DTC +8.3%; wholesale -17.9%; ASP up low-single digits .	Gradual DTC improvement; wholesale reset continues.
Social/Digital Commerce	Q4: TikTok Shop performance; social-first marketing engine emphasized .	Crocs #1 footwear brand on TikTok Shop; social commerce scaling; high-impact collabs (e.g., BAPE) .	Strengthening digital halo.
Regional Trends	Q3: NA modest; int’l strong (Europe/Asia) . Q4: China +25%, Western Europe strong; int’l growth priority .	China >30%; Western Europe robust; NA down ~3% but ahead of plan .	Int’l outperformance sustained.
Capital Allocation	Q3/Q4: Active repurchases and debt paydown; leverage in 1–1.5x range .	Q1: $61M repurchases; leverage within target; plan to do both (pay down debt & buy back) .	Consistent, opportunistic.

Management Commentary

“All in, we delivered $3 in adjusted diluted earnings per share, nearly 20% above the high end of our guidance range.”
“One of the primary reasons we've suspended guidance for 2025 is our ability to predict the financial impact of future tariffs… 10% incremental tariff… ~$45 million… if the incremental 145% tariff on China remains… this would imply a cost of approximately $130 million…”
“In Q1, we achieved 12% revenue growth in international… China… growing more than 30%… balanced across channels… addition of 40 new partner doors.”
“We have identified approximately $50 million of additional savings to be realized in 2025.”
“Crocs brand adjusted gross margin of 60.7% was up 260 basis points… tied to lower product costs and favorable customer mix.”
“We plan to pay down debt and opportunistically buy back stock while remaining within our 1 to 1.5x net leverage target.”

Q&A Highlights

Gross margin sustainability and pricing elasticity: management confident margins ex-tariffs; pricing lever will be used strategically; elasticity acknowledged, preferring margin protection even at lower volumes .
Near-term demand and Q2 commentary: April strong; cautious stance given day-to-day trade uncertainty; unlikely to realize the extreme $130M tariff case due to sourcing shifts away from China .
Marketing investment: despite $50M SG&A savings, maintain elevated marketing levels to support brand demand; social-first campaigns across geographies .
Wholesale planning: major U.S. partners planning conservatively; Crocs aligned to prevent channel inventory build; price coordination across DTC/wholesale likely at designated points rather than retroactive changes .
HEYDUDE turnaround: core Wendy/Wally replatformed; DTC acceleration; new door openings (~10 in 2025); resets with wholesale including returns of aged inventory .

Estimates Context

Q1 2025 actual vs consensus: Revenue $937.3M vs $907.9M*; Primary EPS $3.00 vs $2.49*; EBITDA $241.5M vs $216.2M*; # of estimates: EPS 13*, Revenue 11*.
Implications: Street likely to raise near-term EPS and margin forecasts for Crocs brand; HEYDUDE recovery path and tariff overhang may cap outer-year revisions. Values retrieved from S&P Global.

Key Takeaways for Investors

Strong beat on revenue/EPS/margins with Crocs brand momentum and int’l strength; HEYDUDE DTC showing improvement even as wholesale resets continue .
Guidance withdrawal is the primary narrative driver; monitor tariff developments and management’s mitigation (sourcing shifts, $50M cost cuts, pricing actions) .
Margins appear structurally resilient (enterprise GM 57.8%; Crocs GM 60.7%) given product costs, logistics efficiencies, and favorable mix; watch Q2/H2 tariff timing impact .
Capital allocation remains supportive (buybacks and debt paydown; ~$1.3B authorization), with leverage within 1–1.5x target—provides downside cushion .
Trading setup: beat vs consensus offsets visibility overhang; headlines on tariffs and any incremental guidance color could drive volatility—pair positioning with tariff news flow .
Medium-term thesis: Crocs brand international expansion (China, Western Europe, India) and digital/social commerce leadership sustain growth; HEYDUDE turnaround is progressing but will be paced by wholesale channel normalizing .
Watch for pricing actions and elasticity tests; management prefers protecting margins to fund demand creation—signals EPS resilience even in softer unit scenarios .