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CROX beat Q2 earnings and revenue estimates as DTC and international demand offset wholesale weakness.
Crocs brand sales topped $1 billion, while DTC revenues rose 12.9% and international sales gained 7.8%.
CROX raised 2026 guidance, with revenue growth now seen at 1-2% and adjusted EPS at $13.70-$14.00.
Crocs, Inc. (CROX - Free Report) reported second-quarter 2026 adjusted earnings of $4.55 per share, up 7.6% year over year. The figure surpassed the Zacks Consensus Estimate of $4.32 by 5.3%.
Consolidated revenues rose 2.6% year over year to $1.18 billion and came above the consensus mark of $1.15 billion. Strength in direct-to-consumer (DTC) sales and international demand offset wholesale weakness. The Crocs brand also surpassed $1 billion in quarterly revenues for the first time.
Despite earnings and revenues beating estimates as well as raised guidance, Crocs’ shares have dropped more than 7% in the pre-trading session. The downside might be owing to softness at Wholesale business and the HEYDUDE brand. This Zacks Rank #4 (Sell) stock has lost 4% in the past month against the industry’s 11.1% growth.
DTC revenues increased 12% year over year, or 11.3% on a constant-currency basis. The performance reflected solid consumer demand and a favorable response to new product innovation across the company’s brands.
Wholesale revenues declined 7.2%, or 7.6% at constant currency. The channel divergence indicates that company-operated stores and digital platforms remained the main growth engines, while wholesale partners continued to manage purchases cautiously.
Crocs Brand Crosses the $1 Billion Mark
Crocs brand revenues increased 4.3% year over year to $1 billion, surpassing the Zacks Consensus Estimate of $982 million. On a constant-currency basis, sales advanced 3.7%. Direct-to-consumer revenues rose 12.9% to $558.9 million, while wholesale revenues fell 5% to $441.5 million.
International revenues increased 7.8% to $541.7 million, supported by a 23.7% surge in direct-to-consumer sales. North American revenues edged up 0.4% to $458.7 million, as a 5.4% DTC increase offset an 8.4% wholesale decline.
CROX Sees Continued Pressure at HEYDUDE
HEYDUDE brand revenues declined 5.7% year over year to $179 million. Although the brand’s revenues dipped year over year, the metric came above the Zacks Consensus Estimate of $167 million.
The decrease was driven by a 17.2% fall in wholesale revenues to $82.6 million, highlighting continued challenges within the brand’s partner distribution channel. HEYDUDE’s DTC revenues increased 7.2% to $96.5 million.
Crocs' Margins Contract on Higher Costs
Adjusted gross profit dipped 0.2% year over year to $707.5 million. Adjusted gross margin contracted 170 basis points to 60%, reflecting lower brand margins and costs related to distribution transitions.
Adjusted selling, general and administrative expenses increased 3.1% to $411.8 million. These expenses represented an increase of 20 basis points to 34.9% of revenues. Adjusted operating income declined 4.5% to $295.6 million, while the adjusted operating margin contracted 180 basis points to 25.1%.
CROX Generates Strong Cash Flow
Cash provided by operating activities totaled $351.7 million in the second quarter, up from $285.8 million a year earlier. After $20.7 million in capital expenditures, free cash flow reached $331 million compared with $269.2 million in the prior-year period.
Crocs ended the quarter with $170.3 million in cash and cash equivalents and $1.3 billion in total borrowings. Inventories declined 3.9% year over year to $389.2 million, indicating disciplined inventory management.
During the reported quarter, the company repaid $31 million of debt and repurchased roughly 2.3 million shares for $251 million. The average repurchase price was $106.87 per share. The board subsequently approved a $1.5 billion increase in the share repurchase authorization to approximately $2 billion.
CROX Raises 2026 Outlook
For 2026, management now expects revenues to increase 1-2% year over year compared with its previous projection of a 1% decline to 1% growth. Crocs brand revenues are forecast to rise 2-3%, while HEYDUDE revenues are expected to decline 2-4%. Earlier, management had predicted Crocs brand revenues in the range of flat to up 2% and HEYDUDE revenues to decrease 5-7%.
Adjusted earnings are now projected between $13.70 and $14.00 per share, up from the prior range of $13.20-$13.75. This view does not assume any impacts of potential future share repurchases. Adjusted operating margin is expected to expand modestly from 22.3%, while capital expenditures are forecast between $70 million and $80 million. Non-GAAP adjustments are expected to be roughly $25 million, mainly related to cost-reduction initiatives.
For the third quarter, Crocs expects revenues to remain roughly flat year over year, at currency rates as of July 27, 2026. Crocs brand revenues are likely to grow approximately 1% year over year, while the HEYDUDE brand is likely to decline nearly 3% to flat compared with the third quarter of 2025. Adjusted operating margin is projected at approximately 21.5%, with adjusted earnings of $3.20-$3.30 per share.
Duluth Holdings delivered a trailing four-quarter earnings surprise of 107.5%, on average. The Zacks Consensus Estimate for DLTH’s current financial-year EPS indicates growth of 39.5% from the year-ago number.
Columbia Sportswear (COLM - Free Report) engages in marketing and distribution of outdoor and active lifestyle apparel, footwear and accessories, and currently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for COLM’s current financial-year EPS is expected to rise 4.6% from the corresponding year-ago reported figure. COLM delivered a trailing four-quarter earnings surprise of 44.1%, on average.
Ralph Lauren Corporation (RL - Free Report) , which is a designer and marketer of premium lifestyle products, currently carries a Zacks Rank of 2.
RL delivered a trailing four-quarter earnings surprise of 9.1%, on average. The Zacks Consensus Estimate for Ralph Lauren’s current financial-year EPS indicates growth of 10.5% from the year-ago number.
View the Zacks #1 Rank List
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Crocs' Q2 Earnings Beat Estimates on DTC Growth, 2026 View Raised
Key Takeaways
Crocs, Inc. (CROX - Free Report) reported second-quarter 2026 adjusted earnings of $4.55 per share, up 7.6% year over year. The figure surpassed the Zacks Consensus Estimate of $4.32 by 5.3%.
Consolidated revenues rose 2.6% year over year to $1.18 billion and came above the consensus mark of $1.15 billion. Strength in direct-to-consumer (DTC) sales and international demand offset wholesale weakness. The Crocs brand also surpassed $1 billion in quarterly revenues for the first time.
Despite earnings and revenues beating estimates as well as raised guidance, Crocs’ shares have dropped more than 7% in the pre-trading session. The downside might be owing to softness at Wholesale business and the HEYDUDE brand. This Zacks Rank #4 (Sell) stock has lost 4% in the past month against the industry’s 11.1% growth.
Crocs, Inc. Price, Consensus and EPS Surprise
Crocs, Inc. price-consensus-eps-surprise-chart | Crocs, Inc. Quote
CROX's DTC Growth Offsets Wholesale Weakness
DTC revenues increased 12% year over year, or 11.3% on a constant-currency basis. The performance reflected solid consumer demand and a favorable response to new product innovation across the company’s brands.
Wholesale revenues declined 7.2%, or 7.6% at constant currency. The channel divergence indicates that company-operated stores and digital platforms remained the main growth engines, while wholesale partners continued to manage purchases cautiously.
Crocs Brand Crosses the $1 Billion Mark
Crocs brand revenues increased 4.3% year over year to $1 billion, surpassing the Zacks Consensus Estimate of $982 million. On a constant-currency basis, sales advanced 3.7%. Direct-to-consumer revenues rose 12.9% to $558.9 million, while wholesale revenues fell 5% to $441.5 million.
International revenues increased 7.8% to $541.7 million, supported by a 23.7% surge in direct-to-consumer sales. North American revenues edged up 0.4% to $458.7 million, as a 5.4% DTC increase offset an 8.4% wholesale decline.
CROX Sees Continued Pressure at HEYDUDE
HEYDUDE brand revenues declined 5.7% year over year to $179 million. Although the brand’s revenues dipped year over year, the metric came above the Zacks Consensus Estimate of $167 million.
The decrease was driven by a 17.2% fall in wholesale revenues to $82.6 million, highlighting continued challenges within the brand’s partner distribution channel. HEYDUDE’s DTC revenues increased 7.2% to $96.5 million.
Crocs' Margins Contract on Higher Costs
Adjusted gross profit dipped 0.2% year over year to $707.5 million. Adjusted gross margin contracted 170 basis points to 60%, reflecting lower brand margins and costs related to distribution transitions.
Adjusted selling, general and administrative expenses increased 3.1% to $411.8 million. These expenses represented an increase of 20 basis points to 34.9% of revenues. Adjusted operating income declined 4.5% to $295.6 million, while the adjusted operating margin contracted 180 basis points to 25.1%.
CROX Generates Strong Cash Flow
Cash provided by operating activities totaled $351.7 million in the second quarter, up from $285.8 million a year earlier. After $20.7 million in capital expenditures, free cash flow reached $331 million compared with $269.2 million in the prior-year period.
Crocs ended the quarter with $170.3 million in cash and cash equivalents and $1.3 billion in total borrowings. Inventories declined 3.9% year over year to $389.2 million, indicating disciplined inventory management.
During the reported quarter, the company repaid $31 million of debt and repurchased roughly 2.3 million shares for $251 million. The average repurchase price was $106.87 per share. The board subsequently approved a $1.5 billion increase in the share repurchase authorization to approximately $2 billion.
CROX Raises 2026 Outlook
For 2026, management now expects revenues to increase 1-2% year over year compared with its previous projection of a 1% decline to 1% growth. Crocs brand revenues are forecast to rise 2-3%, while HEYDUDE revenues are expected to decline 2-4%. Earlier, management had predicted Crocs brand revenues in the range of flat to up 2% and HEYDUDE revenues to decrease 5-7%.
Adjusted earnings are now projected between $13.70 and $14.00 per share, up from the prior range of $13.20-$13.75. This view does not assume any impacts of potential future share repurchases. Adjusted operating margin is expected to expand modestly from 22.3%, while capital expenditures are forecast between $70 million and $80 million. Non-GAAP adjustments are expected to be roughly $25 million, mainly related to cost-reduction initiatives.
For the third quarter, Crocs expects revenues to remain roughly flat year over year, at currency rates as of July 27, 2026. Crocs brand revenues are likely to grow approximately 1% year over year, while the HEYDUDE brand is likely to decline nearly 3% to flat compared with the third quarter of 2025. Adjusted operating margin is projected at approximately 21.5%, with adjusted earnings of $3.20-$3.30 per share.
Key Picks in the Consumer Discretionary Space
Duluth Holdings Inc. (DLTH - Free Report) , which deals in casual wear, workwear and accessories for men and women, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Duluth Holdings delivered a trailing four-quarter earnings surprise of 107.5%, on average. The Zacks Consensus Estimate for DLTH’s current financial-year EPS indicates growth of 39.5% from the year-ago number.
Columbia Sportswear (COLM - Free Report) engages in marketing and distribution of outdoor and active lifestyle apparel, footwear and accessories, and currently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for COLM’s current financial-year EPS is expected to rise 4.6% from the corresponding year-ago reported figure. COLM delivered a trailing four-quarter earnings surprise of 44.1%, on average.
Ralph Lauren Corporation (RL - Free Report) , which is a designer and marketer of premium lifestyle products, currently carries a Zacks Rank of 2.
RL delivered a trailing four-quarter earnings surprise of 9.1%, on average. The Zacks Consensus Estimate for Ralph Lauren’s current financial-year EPS indicates growth of 10.5% from the year-ago number.