Crocs, Inc. (NASDAQ:CROX) shares are trading lower premarket on Thursday after the company reported provided below-consensus third quarter guidance despite second-quarter earnings beat.
Adjusted EPS of $4.55, beat the $4.34 analyst estimate.
Revenue rose 2.6% year over year (Y/Y) and up 2.0% Y/Y on a constant currency basis to $1.179 billion which exceeded the $1.148 billion estimate.
Adjusted gross margin contracted 170 basis points Y/Y to 60.0% in the quarter.
Brand Performance
The Crocs brand generated revenue growth of 4.3% Y/Y (+3.7% on a constant-currency basis) to $1.0 billion in the quarter.
By channel, Direct-to-consumer (DTC) sales rose 12.9% Y/Y (+12.0% in constant currency) to $559 million. Meanwhile, wholesale revenue declined 5.0% Y/Y (-5.4% in constant currency) to $441 million. By regions, North America revenue edged up 0.4% Y/Y to $459 million, while international revenue rose 7.8% Y/Y (+6.6% on in constant-currency) to $542 million.
HEYDUDE brand revenue declined 5.7% Y/Y (-5.8% in constant currency) to $179 million. By channel, DTC sales rose 7.2% Y/Y (+7.1% in constant-currency) to $96 million, while wholesale revenue fell 17.2% Y/Y (-17.4% in constant currency) to $83 million.
Capital Return & Liquidity
The company bought back around 2.3 million shares for $251 million. At the quarter-end, the company had about $496 million of shares remaining available under repurchase authorization.
The company also expanded its share repurchase programme by $1.5 billion, bringing the total authorised buyback capacity to approximately $2 billion.
As of June 30, 2026, cash and cash equivalents stood at $170 million and inventories stood at $389 million
Outlook
The company raised its FY26 adjusted EPS outlook to $13.70-$14.00 from the previous range of $13.20-$13.75, compared with the $13.68 estimate.
Crocs also boosted FY26 revenue guidance to $4.081 billion-$4.122 billion from $4.000 billion-$4.081 billion, versus the $4.074 billion estimate.
For the third quarter, Crocs expects adjusted EPS of $3.20-$3.30, below the $3.53 estimate, with revenue guidance of approximately $996.3 million, compared with the $1.020 billion estimate.
CROX Stock Price Activity: Crocs shares were down 12.37% at $117.00 during premarket trading Thursday.
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