Crocs (NASDAQ:CROX) reported record second-quarter revenue of $1.2 billion for 2026, up 2% from a year earlier on a constant-currency basis, as direct-to-consumer demand and international growth helped offset planned wholesale declines. The company raised its full-year revenue and adjusted earnings outlook while expanding its share-repurchase authorization.
Chief Executive Officer Andrew Rees said the quarter represented an “important inflection” for both the Crocs and HEYDUDE brands. Crocs brand revenue rose 4% to surpass $1 billion in a quarter for the first time, while HEYDUDE revenue declined 6% to $179 million, a result that management said was ahead of expectations.
Direct-to-Consumer Growth and International Strength
International revenue for the Crocs brand increased 7%, led by double-digit growth in China, India and Japan. Crocs also returned to slight growth in North America during the quarter, driven by a 5% increase in North American DTC sales and marketplace strength, according to Chief Financial Officer Patraic Reagan.
Rees pointed to demand across the company’s expanded product assortment, including Crocband, Echo and Crafted clogs as well as sandals, ballet flats, recovery footwear, bags and accessories. The company said sandals were a strong contributor to its quarterly upside, with Rees noting that Crocs’ global sandal business is expected to reach $500 million this year.
“We continue to gain share in sandals within the Crocs brand,” Rees said, adding that the company sees a multiyear growth opportunity in the category.
The HEYDUDE brand continued its effort to return to growth. Its DTC results were supported by digital marketplaces and new stores, while wholesale revenue fell 17% as the company managed inventory levels in the channel. Rees said HEYDUDE has delivered several sequential quarters of improving performance and that management expects the brand to return to growth in North America during the second half of the year.
Margins Face Tariff Pressure
Enterprise adjusted gross margin was 60%, down 170 basis points year over year. Reagan attributed most of the decline to 160 basis points of incremental tariff impact.
- Crocs brand adjusted gross margin was 63.1%, down 100 basis points, reflecting tariffs and product mix, partly offset by cost savings and international price increases.
- HEYDUDE adjusted gross margin was 43.7%, down 650 basis points, due to tariffs as well as channel and product mix.
- Adjusted operating margin was 25.1%, down 180 basis points year over year.
Adjusted diluted earnings per share rose 8% to $4.55, exceeding the company’s prior guidance range of $4.15 to $4.30. The company reported adjusted selling, general and administrative expenses of $412 million, up 3% from a year earlier, as cost savings were offset by DTC investments.
Inventory totaled $389 million as of June 30, down 4% from a year earlier despite higher tariffs. Footwear inventory units declined by a high-single-digit percentage, and enterprise inventory turns were above the company’s annualized goal of four times, Reagan said.
Capital Returns and New Buyback Authorization
Crocs repurchased approximately 2.3 million shares for $251 million during the second quarter and paid down $31 million in debt. The company ended the quarter with just over $170 million in cash and cash equivalents, about $870 million in revolver borrowing capacity, and net leverage at the low end of its target range of 1 times to 1.5 times.
The board approved an additional $1.5 billion share-repurchase authorization, increasing total available authorization to about $2 billion.
Reagan said the new authorization reflects management’s confidence in the company’s cash-generation capacity and commitment to returning excess capital to shareholders.
Outlook Raised, Marketplace Change Ahead
For full-year 2026, Crocs now expects enterprise revenue to grow 1% to 2%, up from its previous outlook. The Crocs brand is expected to grow 2% to 3%, compared with prior guidance ranging from flat to 2% growth. HEYDUDE revenue is expected to decline 2% to 4%, an improvement from the prior forecast for a 5% to 7% decline.
The company raised its full-year adjusted diluted EPS outlook to $13.70 to $14.00, from $13.20 to $13.75 previously. It continues to expect adjusted gross margin to rise slightly for the year and adjusted operating margin to expand modestly from the 22.3% reported in fiscal 2025.
For the third quarter, Crocs expects revenue to be approximately flat at currency rates as of July 27. Crocs brand revenue is expected to rise about 1%, while HEYDUDE revenue is expected to range from flat to down 3%. Adjusted diluted EPS is projected at $3.20 to $3.30.
Beginning in the third quarter, the company will implement a business-model change with one of its largest North American marketplace partners. Reagan said the change will shift the recognition of some Crocs brand revenue from DTC to wholesale, reducing total reported revenue but leaving units sold and market share unchanged. The company expects a slight operating-profit benefit from the change.
Rees said Crocs remains confident in the long-term growth path of both brands, supported by product diversification, international expansion, marketplace momentum and cash flow generation.
About Crocs (NASDAQ:CROX)
Crocs, Inc is a global footwear designer, developer and distributor best known for its lightweight, proprietary Croslite™ foam-clog construction. The company’s product portfolio encompasses a range of styles, including clogs, sandals, slides, boots and sneakers, all featuring the slip-resistant, odor-resistant and cushion-providing qualities of the Croslite material. Crocs distributes its products through an omnichannel network that includes e-commerce platforms, company-owned retail stores, authorized dealers and wholesale partners.
Founded in 2002 by Scott Seamans, Lyndon “Duke” Hanson and George Boedecker Jr., Crocs launched its first clog on the island of Vail, Colorado.
