Crocs, Inc. (CROX Quick QuoteCROX - Free Report) , along with its subsidiaries, is engaged in the design, development, manufacturing, marketing, distribution, and sale of casual lifestyle footwear and accessories for men, women, and children under the Crocs and HEYDUDE brands across the United States and international markets.

Let’s discuss why CROX stock is worth retaining at the moment.

Cost Savings, Wholesale Clean-up & Product Diversification

Crocs continues to demonstrate resilience and long-term potential, making a strong case for retaining the stock despite near-term challenges. The company’s positive fundamentals are anchored in brand strength, disciplined execution and robust cash generation.

Crocs is proactively rightsizing its cost structure to support profitability and enhance operational flexibility. The company has already delivered $50 million in gross cost savings for 2025 and identified an additional $100 million opportunity, aimed at improving P&L flexibility while continuing to fund brand investments. Key initiatives include integrating the Crocs and HEYDUDE supply chains, simplifying the organization, curbing non-essential spending and further optimizing the supply chain.

Crocs is also cleaning up the HEYDUDE wholesale channel by pulling back aged and slow-moving inventory to improve brand presentation. Early signs of stabilization are emerging, with average selling prices rising for nine consecutive quarters and sell-through rates now more closely aligned with inventory levels.

Crocs is reinforcing brand relevance through product innovation and diversification. New franchises such as Crafted Clog, Echo RO and expanding sandal lines are gaining traction, while collaborations and social-first marketing on platforms like TikTok continue to drive strong consumer engagement. International markets remain a key bright spot, with broad-based growth across China, Japan and Western Europe, highlighting a long runway for global expansion.

In third-quarter 2025, Crocs delivered better-than-expected profitability and cash flow, enabling the company to repurchase 2.4 million shares and reduce debt by $63 million. This underscores the durability of its value-creation model and management’s focus on shareholder returns.

CROX Faces Challenges in North America & Tariff Impact

Despite the positives, investors should also weigh the near-term headwinds. Revenue declined 6.2% year over year in the third quarter, reflecting intentional pullbacks in promotions and wholesale to protect brand health, particularly in North America. While these actions are strategic, they have pressured top-line growth and contributed to a 19% decline in adjusted EPS. 
Tariff-related costs remain a meaningful drag on margins, with gross margin pressured by higher duties and an unfavorable mix. Management also flagged a cautious consumer environment, especially among lower-income cohorts, which could weigh on discretionary spending during the holiday season.

Additionally, HEYDUDE remains in a reset phase. Although progress is being made through inventory clean-up and improved sell-through, revenues are still declining sharply, creating near-term earnings volatility. That said, improving inventory health, rising average selling prices and brand repositioning suggest a clearer path to stabilization.

Overall, while short-term volatility and margin pressures persist, Crocs’ strong brands, international momentum, disciplined capital allocation and aggressive cost actions support a favorable long-term outlook. For investors with a medium- to long-term horizon, these strengths outweigh the current challenges, making Crocs a stock worth retaining in a diversified portfolio.

The Zacks Rundown for CROX

Crocs’ shares have lost 18.2% in the past six months compared with the industry’s decline of 8.5%. CROX presently carries a Zacks Rank #3 (Hold).

Image Source: Zacks Investment Research

From a valuation standpoint, CROX trades at a forward price-to-earnings ratio of 6.87X, lower than the industry’s average 16.23X.

Image Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks have been discussed below:

Vince Holding Corp. (VNCE Quick QuoteVNCE - Free Report) provides luxury apparel and accessories in the United States and internationally. It operates through Vince Wholesale and Vince Direct-to-Consumer segments. At present, the company flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for VNCE’s current fiscal-year sales and earnings implies growth of 2% and 26.3%, respectively, from the year-ago figures. VNCE has delivered a trailing four-quarter earnings surprise of 229.6%, on average.

Under Armour, Inc. (UAA Quick QuoteUAA - Free Report) , together with its subsidiaries, engages in developing, marketing, and distributing performance apparel, footwear, and accessories for men, women, and youth. At present, Under Armour sports a Zacks Rank of 1.

The Zacks Consensus Estimate for Under Armour’s current fiscal-year sales and earnings implies a decline of 4.5% and 87.1%, respectively, from the year-ago figures. UAA has delivered a trailing four-quarter earnings surprise of 44.5 %, on average.

Guess?, Inc. (GES Quick QuoteGES - Free Report) designs, markets, distributes, and licenses lifestyle collections of apparel and accessories for men, women, and children. At present, the company holds a Zacks Rank of 2 (Buy).

The Zacks Consensus Estimate for GES’s current fiscal-year sales implies growth of 8%, and the same for current fiscal-year earnings implies a decline of 13.8% from the year-ago figures. GES has delivered a trailing four-quarter earnings surprise of 45%, on average.