Dive Brief:
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Crocs Q4 revenues rose 3.1% year over year to nearly $990 million, with direct-to-consumer up 5.5% and wholesale down slightly.
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By brand, Crocs revenues rose 4% to $762 million, with DTC up 5% to $447 million and wholesale up 2.7% to $315 million. Heydude revenues were flat at $228 million, with DTC up over 7% to $133 million and wholesale down almost 9% to $95 million.
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Gross margin in the period expanded to nearly 58% from 55.3% a year ago. Net income soared 45% to nearly $369 million.
Dive Insight:
Signs of improvement at Crocs’ struggling Heydude brand helped the footwear retailer close out 2024 on a hopeful note.
For the year, revenues rose 3.5% to $4.1 billion, with DTC revenues up 7.2% and wholesale up 0.2%. Crocs brand revenue rose nearly 9% to $3.3 billion, with DTC growing nearly 10% and wholesale up nearly 8%. Heydude brand revenues plummeted more than 13% for the year to $824 million, with DTC down nearly 4% and wholesale down more than 19%.
Despite the declines at Heydude, CEO Andrew Rees expressed confidence in its prospects. “The continued green shoots we're seeing give us positive reinforcement of the opportunities for durable future growth,” he told analysts Thursday.
The brand is leaning on influencers, and in December was ranked third among footwear brands on TikTok Shop, Rees said. Heydude sales from women 18 to 24 years old grew 160% in Q4, partly driven by the brand’s Wendy Slipper and Austin Lift styles, he said.
Meanwhile, given its level of saturation in North America, the flagship Crocs brand is chasing growth abroad, executives said.
The company is assuming there will be a 10% tariff on goods from China as of early February and another 25% tariff on goods from Mexico as of March; the company has no production in Canada. This year, Crocs expects that about 15% of its inventory will be Chinese imports to the U.S., with the Crocs brand accounting for 10% of that and Heydude 27%. Imports from Mexico affect Crocs only and will be under 4%.
In all, the company expects that the tariffs will siphon about $11 million from its gross profit for the year, and about 25 basis points from its margins, which Needham analysts led by Tom Nikic called a manageable headwind.
