Crocs’ first quarter results were well received by the market, with revenue coming in flat year over year but ahead of Wall Street expectations. Management credited strong international growth and effective cost control for the quarter’s performance, despite macroeconomic uncertainty and mixed demand in North America. CEO Andrew Rees highlighted the resilience of the Crocs brand, citing double-digit international growth and notable traction in China and Western Europe. Meanwhile, HEYDUDE’s direct-to-consumer channel rebounded, offsetting wholesale declines. The company’s gross margin improvement was attributed to lower product costs and a favorable customer mix, while disciplined inventory management helped maintain profitability.
Is now the time to buy CROX? Find out in our full research report (it’s free).
Crocs (CROX) Q1 CY2025 Highlights:
- Revenue: $937.3 million vs analyst estimates of $909.1 million (flat year on year, 3.1% beat)
- Adjusted EPS: $3 vs analyst estimates of $2.49 (20.6% beat)
- Operating Margin: 23.8%, in line with the same quarter last year
- Constant Currency Revenue rose 1.4% year on year (6.9% in the same quarter last year)
- Market Capitalization: $5.61 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Crocs’s Q1 Earnings Call
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Anna Andreeva (Piper Sandler) asked about the sustainability of gross margin gains and the likelihood of price increases; CEO Andrew Rees explained margin strength was driven by vendor negotiations, supply chain investments, and favorable mix, and said pricing actions will be targeted and depend on tariff developments.
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Jonathan Komp (Baird) inquired about the decision to withhold short-term guidance and the company’s ability to offset tariff exposure; Rees replied that ongoing volatility in trade policy made forecasting difficult, and mitigation would involve production shifts and cost controls.
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Peter McGoldrick (Stifel) questioned the planned level of marketing spend amid uncertainty and how HEYDUDE’s refresh would balance core appeal with new growth; Rees said marketing investment would be maintained and the brand’s repositioning focused on core products and new styles to attract younger consumers.
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Laura Champine (Loop Capital) sought clarity on potential cost increases from Southeast Asia and demand elasticity if prices rise; Rees responded that current suppliers are not raising costs, and the company would prioritize margin preservation over volume if price increases become necessary.
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Aubrey Tianello (BNP Paribas) asked about the timeline for shifting sourcing out of China; Rees indicated most transitions could occur within 6 to 12 months, with minimal product-specific constraints.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be monitoring (1) Crocs’ ability to mitigate tariff pressures through supply chain adjustments and cost controls, (2) the resilience of international growth, especially in China and Europe, and (3) the effectiveness of price increases or marketing investments in sustaining consumer demand. The balance between margin protection and volume, along with wholesale channel trends, will be critical to track.
Crocs currently trades at $102, up from $100.98 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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