Sign in
CI

Crocs, Inc. (CROX)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue grew 3.1% to $0.99B with gross margin +260 bps YoY to 57.9%; GAAP diluted EPS rose 53% YoY to $6.36 while adjusted EPS was $2.52 (-2% YoY), reflecting a large non-recurring tax benefit in GAAP results .
  • Crocs Brand was the growth engine (+4% YoY to $0.76B), led by international (+11.5%); HEYDUDE was flat YoY as DTC inflected to growth (+7%), offset by wholesale (-9%) .
  • Management issued 2025 guidance: revenue +2% to +2.5% (Crocs +4.5%; HEYDUDE -9% to -7%), adjusted operating margin ~24%, adjusted EPS $12.70–$13.15; Q1 2025 revenue down ~3.5%, adj. OPM ~21.5%, adj. EPS $2.38–$2.52 .
  • Capital allocation remains aggressive: Q4 repurchased ~$225M (2.0M shares) and repaid $75M of debt; authorization later increased by $1.0B to ~$1.3B total available, supported by FY’24 free cash flow of ~$923M .

What Went Well and What Went Wrong

  • What Went Well

    • International Crocs momentum: International Crocs revenue +11.5% YoY in Q4 (constant currency +13.7%), with China growth accelerating vs Q3; Crocs gross margin expanded to 60.9% (+140 bps) on mix and lower fulfillment costs .
    • DTC strength and merchandise hits: DTC +5.5% (constant currency +6.1%); Cozzzy Slipper “could not keep...in stock,” Echo Wave and in-motion clog pipelines highlighted; HEYDUDE slipper sell-out in 2 days .
    • Cash generation and return: FY’24 operating cash flow ~$992M and FCF ~$923M; $551M buybacks in 2024; net leverage at low end of 1.0x–1.5x target .

  • What Went Wrong

    • HEYDUDE still a drag: Q4 HEYDUDE flat YoY with wholesale -8.6%; DTC comps -8.3% cc, and 2025 outlook embeds -7% to -9% revenue for the brand as wholesale takes longer to turn .
    • SG&A deleverage: Q4 SG&A up 16% (adj. +23%), rising to 37.7% of sales (vs 33.5% LY) as the company invests in DTC, talent and marketing; adjusted operating margin fell 390 bps YoY to 20.2% .
    • Tariff and FX headwinds: 2025 guide includes ~60 bps OPM drag from FX and announced/pending tariffs; exposure includes ~15% of U.S. imports from China (Crocs 10%, HEYDUDE 27%) and <4% from Mexico (Crocs only) .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$960.1 $1,062.2 $989.8
Diluted EPS ($)$4.16 $3.36 $6.36
Adjusted Diluted EPS ($)$2.58 $3.60 $2.52
Gross Margin (%)55.3% 59.6% 57.9%
Adjusted Gross Margin (%)55.7% 59.6% 57.9%
Operating Margin (%)21.8% 25.4% 20.2%
Adjusted Operating Margin (%)24.1% 25.4% 20.2%
SG&A (% of Revenue)33.5% 34.2% 37.7%

Segment and channel/geography – Q4 2024

Segment/Channel/GeoRevenue ($USD Millions)YoY %Const. Currency YoY %
Crocs Brand Total$762.1 +4.0% +4.9%
- DTC$447.4 +5.0% +5.7%
- Wholesale$314.7 +2.7% +3.8%
- North America$471.0 -0.1% +0.1%
- International$291.1 +11.5% +13.7%
HEYDUDE Total$227.7 0.0% +0.1%
- DTC$132.8 +7.2% +7.2%
- Wholesale$94.9 -8.6% -8.3%

KPIs

KPIQ4 2024Prior Year/Qtr
DTC Comparable Sales (cc) – Crocs Brand+0.3% +10.7% (Q4’23)
DTC Comparable Sales (cc) – HEYDUDE-8.3% -14.2% (Q4’23)
Free Cash Flow ($USD Millions)$303.4 (Q4) $320.5 (Q4’23)
FY 2024 Free Cash Flow ($USD Millions)$923.1 $814.8 (FY’23)
Share Repurchases~$225M; ~2.0M shares in Q4 $551M in FY’24
Remaining Authorization$324M at YE’24 ; ~$1.3B total authorization after $1.0B increase on 2/13/25
Total Borrowings$1,349M at 12/31/24 $1,664M at 12/31/23

Guidance Changes

MetricPeriodPrevious GuidanceCurrent/ActualChange
Revenue growth (YoY)Q4 2024Flat to up slightly (company outlook) +3.1% actual Beat
Crocs Brand revenue growthQ4 2024~+2% +4.0% actual Beat
HEYDUDE revenue growthQ4 2024-6% to -4% ~0% actual Beat
Adjusted Operating MarginQ4 2024~19.5% 20.2% actual Beat
Adjusted EPS ($)Q4 2024$2.20–$2.28 $2.52 actual Beat
Revenue growth (reported)FY 2025N/A (new)+2% to +2.5% New
Crocs Brand revenue growthFY 2025N/A (new)~+4.5% New
HEYDUDE revenue growthFY 2025N/A (new)-9% to -7% New
Adjusted Operating MarginFY 2025N/A (new)~24.0% New
Adj. EPS ($)FY 2025N/A (new)$12.70–$13.15 New
Non-GAAP effective tax rateFY 2025N/A (new)~18% New
Capex ($)FY 2025N/A (new)$80–$100M New
Revenue (reported)Q1 2025N/A (new)~-3.5% YoY; FX -$19M New
Adjusted Operating MarginQ1 2025N/A (new)~21.5% New
Adj. EPS ($)Q1 2025N/A (new)$2.38–$2.52 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
Consumer/Tariffs/FXCautious U.S. consumer; FX headwinds noted; planning prudently Detailed tariff assumptions (10% CN→US, 25% MX→US) with ~25 bps GP headwind; 2025 OPM ~24% includes ~60 bps FX/tariff impact Increasing headwinds managed prudently
Supply chain/DC/ERPHEYDUDE DC transition; ERP/IT adjustments in 2024 non-GAAP Fulfillment efficiencies aided margins; non-GAAP adjustments detailed; HEYDUDE DC move done Operational execution improving
Product performanceClogs leadership; sandals growth (Getaway/Miami/Brooklyn); Jibbitz traction Cozzzy Slipper a standout; scaling Echo Wave/in‑motion clog; Jibbitz expansion in NA wholesale Strong pipeline/newness
Digital/MarketplacesShift to Amazon 3P; TikTok Shop momentum TikTok Shop strength for both brands; HEYDUDE ranked #3 footwear brand on TikTok Shop in Dec Social commerce rising
Regional trendsChina +70% in Q2; cautious macro; EU double‑digit growth China +25% in Q4, acceleration vs Q3; NA flat; International +11.5% Intl remains growth driver
HEYDUDE brand healthPivot to brand marketing; wholesale cleanup; DTC down DTC +7%, first positive inflection in 5 quarters; wholesale still down; 2025 guide embeds no wholesale growth Gradual stabilization (DTC first)
Regulatory (India)Regulatory pressure in India impacting demand fulfillment No new Q4 update; FY25 Crocs Intl +~10% still targeted Monitoring
Tech/AINo AI initiatives discussedNon-GAAP reflects IT impairment from HEYDUDE integration N/A

Management Commentary

  • “We delivered another record year for Crocs, Inc. highlighted by revenue growth of 4% to $4.1 billion and adjusted earnings-per-share growth of 9%... exceptional operating cash flow of approximately $990 million” — Andrew Rees, CEO .
  • “Our fourth quarter performance exceeded expectations across all metrics led by Crocs Brand growth of 4%, as the North American business outperformed our plan and China growth accelerated” — Andrew Rees .
  • “We expect operating margin to be approximately 24.0% for 2025, and beyond this year, we are committed to maintaining an annual operating margin at or above this level.” — Susan Healy, CFO .
  • “HEYDUDE revenue was flat to last year, higher than anticipated as direct‑to‑consumer sales inflected to growth.” — Andrew Rees .
  • “We ended the year at the low end of our net leverage target range of 1x to 1.5x... the Board...approved an upsized share repurchase authorization of an additional $1 billion, bringing our current authorization to approximately $1.3 billion.” — Susan Healy .

Q&A Highlights

  • Crocs North America and SG&A cadence: Management expects Crocs NA to be slightly up in 2025 but remains prudent given uncertainty; SG&A growth steps down to low-single digits in 2H’25 as 2024 investments lap .
  • Capital allocation: Company plans to both repurchase stock and reduce debt within 1–1.5x leverage, leaning opportunistically toward buybacks given stock opportunity; $1.3B authorization in place .
  • HEYDUDE wholesale/inventory: Partners engaged but channel still cleaning up; some aged inventory returns in Q1 with replacements; no NA wholesale growth embedded in 2025 outlook .
  • Gross margin shaping and promotions: 2025 GM down slightly due to FX/tariffs (~60 bps headwind), otherwise up slightly; promo environment normalized, consumer skewed to lower price points .
  • Tariff exposures: ~15% of U.S. imports from China (Crocs ~10%, HEYDUDE ~27%); Mexico <4% (Crocs only); ~25 bps enterprise gross profit headwind in 2025 from new tariffs .

Estimates Context

  • S&P Global consensus for Q4 2024 could not be retrieved due to access limits; as a result, we cannot provide an official consensus comparison at this time (S&P Global data unavailable).
  • Versus company guidance (from Q3): CROX delivered broad beats — revenue (+3.1% vs flat-to-slightly-up), Crocs Brand (+4% vs ~+2%), HEYDUDE (~flat vs -6% to -4%), adjusted OPM (20.2% vs ~19.5%), and adjusted EPS ($2.52 vs $2.20–$2.28) .

Key Takeaways for Investors

  • Crocs Brand remains resilient and internationally led; Q4 Intl +11.5% with China re-accelerating — the multi-year growth vector remains outside North America .
  • HEYDUDE stabilization is underway via DTC (first positive inflection in 5 quarters), but wholesale repair is slower; 2025 outlook prudently embeds decline and no wholesale growth, creating potential upside if trends improve faster .
  • Margin framework intact: despite FX/tariff headwinds (~60 bps), management targets ~24% adjusted OPM in 2025 and “at or above” that longer term, underscoring a best-in-class profitability profile in footwear .
  • Strong cash generation funds aggressive buybacks: $923M FY’24 FCF and $1.3B buyback authorization support per-share compounding even in a modest topline year .
  • Near-term setup: Q1 2025 guide is conservative (rev ~-3.5%, adj. EPS $2.38–$2.52) given FX/tariffs and holiday timing, but full-year guide implies sequential improvement; watch HEYDUDE DTC momentum and Intl Crocs execution .
  • Promotional/macro read-through: Consumer is value-seeking; CROX’s accessible price points and social commerce activation (TikTok Shop) provide a relative advantage, but continued SG&A investment is required to sustain share gains .
  • Execution risks: Tariff policy changes, FX, and HEYDUDE wholesale clean-up pace are key variables; management is leaning prudently in guidance and capital deployment .