Crocs, Inc. (NASDAQ:CROX) shares rose nearly 20% following the company’s fourth quarter 2025 earnings report, as the footwear maker delivered results that exceeded Wall Street expectations.
The company reported adjusted earnings of $2.29 per share, beating the consensus estimate of $1.92 by about 19%.
Revenue came in at $957.6 million, topping analysts’ expectations of roughly $918 million, though consolidated revenue declined 3.2% year over year, or 4.2% on a constant currency basis.
Direct-to-consumer (DTC) sales increased 4.7%, while wholesale revenue declined 14.5%, reflecting continued pressure in traditional retail channels.
Gross margin was 54.7%, down from 57.9% a year earlier, with adjusted gross margin also declining by 320 basis points. Operating income fell 26.8% to $146 million, with operating margin contracting to 15.3%.
The Crocs brand recorded revenue of $768 million, up 0.8% year over year, driven by DTC growth and international expansion, while North America revenue declined. The HEYDUDE brand saw revenue fall 16.9% to $189 million, weighed down by a sharp drop in wholesale sales.
During the quarter, Crocs repurchased approximately 2.2 million shares for $180 million and repaid $90 million of debt.
Crocs CEO Andrew Rees described the company’s holiday quarter performance as “better-than-expected,” noting that full year revenue exceeded $4 billion.
"We enter 2026 with greater confidence around our growth engines which are diversified across channels, geographies, brands, and product categories,” Rees said. “We have identified and actioned $100 million of cost savings in 2026 aimed at driving greater efficiency while providing the flexibility to continue to invest behind our brands and deepen our connection with consumers."
Looking ahead, Crocs expects first quarter 2026 revenue to decline between 3.5% and 5.5% year over year, with the Crocs brand down low-single digits and HEYDUDE down 15% to 18%.
For full-year 2026, the company forecasts revenue to be roughly flat to slightly higher, with modest operating margin expansion and adjusted diluted earnings per share between $12.88 and $13.35.