Crocs, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated revenues were $1,043 million, an increase of 4.6% on a reported and constant currency basis compared to the prior year.
• Direct-to-consumer (DTC) revenues grew 6.9% on a reported and constant currency basis, while wholesale revenues grew 1.8% (1.9% on a constant currency basis).
• Gross margin was 66.2% compared to 58.5% in the prior year period.
• Adjusted gross margin increased 180 basis points to 60.3% compared to 58.5% in the prior year.
• Selling, general, and administrative (SG&A) expenses were $398 million, an increase of 6.0% from $375 million, representing 38.2% of revenues compared to 37.7%.
• Adjusted SG&A increased 5.7% to $397 million, representing 38.1% of revenues compared to 37.7%.
• Income from operations was $292 million, a 40.6% increase from $208 million, resulting in an operating margin of 28.0% compared to 20.8%.
• Adjusted income from operations was $232 million, an 11.7% increase from $208 million, resulting in an adjusted operating margin of 22.3% compared to 20.8%.
• Diluted earnings per share (EPS) were $4.52, a 67.4% increase from $2.70.
• Adjusted diluted EPS was $3.69, a 26.4% increase from $2.92.
• Cash and cash equivalents were $163 million as of September 30, 2026, compared to $154 million in the prior year period.
• Inventories were $413 million compared to $397 million in the prior year period.
• Total borrowings were $1.29 billion compared to $1.32 billion in the prior year period.
• Capital expenditures were $54 million compared to $45 million in the prior year period.

Guidance and Future Outlook:

• Full-year 2026 enterprise revenue growth outlook raised to approximately 3% (previously up 1% to 2%).
• Full-year 2026 Crocs Brand revenue growth outlook raised to approximately 4% (previously up 2% to 3%).
• Full-year 2026 HEYDUDE Brand revenue outlook raised to approximately flat (previously down 4% to 2%).
• Full-year 2026 adjusted operating margin outlook raised to expand modestly from 22.5% (previously expansion from 22.3%).
• Full-year 2026 adjusted diluted EPS guidance raised to a range of $14.45 to $14.65 (previously $13.70 to $14.00).
• Full-year 2026 GAAP effective tax rate expected to be approximately 23% and adjusted effective tax rate approximately 18%.
• Full-year 2026 capital expenditures expected to be $70 million to $80 million.
• Fourth quarter 2026 revenue growth expected to be up approximately 7% to 9% compared to the prior year quarter.
• Fourth quarter 2026 Crocs Brand revenue growth expected to be up approximately 6% to 8%.
• Fourth quarter 2026 HEYDUDE Brand revenue growth expected to be up approximately 10% to 12%.
• Fourth quarter 2026 adjusted operating margin expected to be approximately 20.5%.
• Fourth quarter 2026 adjusted diluted EPS expected to be in the range of $3.25 to $3.45.

Business Segments and Product Lines:

• Crocs Brand revenues increased 4.4% to $873 million.
• Crocs Brand DTC revenues increased 8.2% to $510 million.
• Crocs Brand wholesale revenues decreased 0.5% to $362 million.
• Crocs Brand North America revenues decreased 2.1% to $438 million.
• Crocs Brand international revenues increased 11.8% to $434 million.
• HEYDUDE Brand revenues increased 6.1% to $170 million, marking a return to growth.
• HEYDUDE Brand DTC revenues increased 0.1% to $91 million.
• HEYDUDE Brand wholesale revenues increased 14.0% to $79 million.

Market and Competitive Landscape:

• The Crocs Brand delivered a record third quarter with double-digit international revenue growth.
• The company operates in more than 85 countries through wholesale and direct-to-consumer channels.
• Management cited strong execution against strategic priorities and continued momentum across product diversification strategies.

Risks and Challenges:

• The press release notes that actual results may differ from forward-looking statements due to risks and uncertainties, including those described in the company's Annual Report on Form 10-K under "Risk Factors."
• Non-GAAP measures exclude the impact of IEEPA tariff refunds, which are non-recurring and result from a February 20, 2026, U.S. Supreme Court ruling.
• Non-GAAP measures exclude distribution center transition costs, distributor takeback costs, and impairment charges related to trademarks, goodwill, and leasehold improvements.

Management Commentary and Tone:

• CEO Andrew Rees stated the company delivered a strong third quarter with growth across brands, channels, and geographies while expanding margins.
• Management expressed confidence in the trajectory of both brands and reinforced the strength of the business model and free-cash-flow generation.
• Management highlighted the ability to invest behind brands while returning meaningful capital to shareholders.

Other Key Points:

• The company repurchased approximately 2.0 million shares in the third quarter for $250 million at an average share price of $123.32.
• Approximately $1.7 billion of share repurchase authorization remained available at quarter-end.
• The company repaid $21 million of debt during the quarter.
• A non-GAAP net benefit of $40 million is expected for full-year 2026, primarily associated with tariff refunds and cost reduction initiatives.
• The Crocs Brand is a world leader in innovative casual footwear, combining comfort and style with value.