Crocs, Inc. (NASDAQ:CROX) shares plunged more than 17% after the footwear brand lowered its full year sales guidance.
The company now expects revenue growth of 3% over 2023, at the lower end of its earlier guidance range of 3% to 5%.
For its Crocs brand, it now sees revenue growth of 8%, at the midpoint of its earlier guidance range of 7% to 9%.
A decline in sales for its HEYDUDE brand are expected to be far more significant than earlier forecasts, with the company expecting a 14.5% drop, compared to its earlier forecast of a decrease of 10% to 8%.
CEO Andrew Rees noted that the company is working to create higher brand relevance for HEYDUDE through product and marketing initiatives, but a recovery will take longer than the company expected.
“While we are seeing early green shoots from these actions, HEYDUDE's recent performance and the current operating environment are signaling it will take longer than we had initially planned for the brand to turn a corner,” Rees said in a statement.
“While we are resetting our full-year outlook for HEYDUDE, I remain confident in the long-term trajectory of the brand."
Also weighing on Crocs’ shares was disappointing fourth quarter guidance.
It expects adjusted earnings per share (EPS) in the range of $2.20 to $2.28, below Street estimates of $2.78.
Crocs guided revenue to be flat to up slightly, below the consensus of a 7.8% year-over-year increase to $1.03 billion.
The company’s weak guidance drew focus from better-than-expected results for Q3.
It reported EPS of $3.60 on revenue of $1.05 billion, topping estimates of $3.13 and $1.05 respectively.
Shares of Crocs were down 17.6% at about $113 late morning on Tuesday.