Crocs returns to growth, tops $1 billion in quarterly revenue

Pulling HeyDude products from marketplace cost Crocs about $45 million

The Crocs brand returned to revenue growth in its June-ended quarter after the footwear maker cut back on certain discounts, pulled some products from shelves and tapered the availability of others. The brand’s quarterly revenue surpassed $1 billion for the first time, driven by growth in North America and rapid expansion in international markets including China.

The company’s overall revenue rose 2.6% to $1.18 billion. The Crocs brand’s North American revenue for the period edged up 0.4% compared with a year earlier, following several quarters of declining North American sales.

Those moves led to several months of declining sales as the company pulled back promotions. “We wanted to take a really aggressive approach in terms of preserving health…and stabilizing the business,” said finance chief Patraic Reagan. A year earlier, executives had warned that bold moves including cutting promotions and cleaning up inventory would drag on near-term sales.

By fall, sales growth for the company and both brands had declined for the first time in at least two years, including at the core Crocs brand, which drives around 85% of total revenue.

The strategy responded to inventory pressures. Stale HeyDude products sat in U.S. wholesale channels while the Crocs brand’s classic clogs oversaturated North America. Crocs offered to either buy aged HeyDude inventory back to liquidate those products or provide retailers with financial support to discount products. Pulling HeyDude products out of the marketplace cost the company about $45 million in the second half of 2025, executives said.

For the Crocs brand, the company provided fewer pairs of the classic clogs to wholesalers in response to slower sales and cut back on promotions for both brands. Cleaning up inventory made room for fresher designs, including nonperforated clogs and an expanding sandal lineup that executives expect will reach $500 million annually by the end of the year.

In May 2025, while rivals leaned on deals to appeal to inflation-fatigued shoppers, Crocs began sharply reducing the depth and frequency of discounts in its North American direct-to-consumer business, particularly on the classic clog. The company is now restricting promotions to key shopping windows such as back-to-school while holding the line on discount depth. Reagan said demand held up better than anticipated under the lighter promotional calendar, widening profit margins.

“I wouldn’t go so far as to say the health of the consumer is great,” Reagan said. “But I would say that the U.S. consumer finds a way to spend when they want to spend.”

The Crocs brand has pushed beyond appealing only to shoppers looking for durable and comfortable footwear, analysts said. Celebrity collaborations, Paris Fashion Week appearances and traction on TikTok Shop have built credibility among stylish and younger shoppers, said Anna Andreeva, a managing director at investment bank Piper Sandler.

By contrast, HeyDude, acquired by Crocs in 2022, continued to weigh on revenue. Beyond oversupplying wholesale channels, management stumbled by attempting to pivot the traditionally male-centric line toward female consumers, an effort executives eventually walked back, according to Andreeva. HeyDude’s revenue decline narrowed to 5.7% in the three months ended in June, signaling progress after several quarters of double-digit drops. Executives expect the brand to return to growth by the end of the year.

An accounting shift involving one of Crocs’s largest U.S. marketplace partners also affected the latest quarter. Previously, sales from the unnamed seller were categorized as direct-to-consumer; they will now be logged as wholesale revenue, an unexpected change analysts described as logical. Under the old method, Crocs recognized the full retail price, $100 for example, and absorbed costs such as marketing and shipping. Under the new method, the company will get around $50, while the retail partner assumes fulfillment and selling expenses.

“So less revenue…but not so much that it was meaningful, that it would change our guidance,” Reagan said.