Crocs Q1 Earnings on Deck: Will Adverse Trends Hurt Performance?

Core Viewpoint - Crocs, Inc. is expected to report a decline in both revenue and earnings per share for the first quarter of 2025, with challenges stemming from the HEYDUDE brand and a volatile operating environment [1][2][3]. Financial Performance - The consensus estimate for revenues is $909.6 million, reflecting a 3.1$2.51, indicating a 16.9% decline year-over-year [1]. - The company has a trailing four-quarter earnings surprise of 17.8% on average, with the last quarter surpassing estimates by 10.04% [2]. Brand Performance - The HEYDUDE brand is facing significant challenges, with expected revenue declines of 14-16% due to weak wholesale demand [4]. - The Crocs brand is projected to have flat to slightly down revenue performance, although international growth may provide some support [4]. - Direct-to-consumer (DTC) revenues are growing, but overall brand momentum is under pressure [2][5]. Market Conditions - Crocs anticipates a 3.5% year-over-year revenue decline, influenced by currency fluctuations, with a $19 million adverse impact from foreign currency [3]. - The North America business is expected to decline by mid-single digits, partially due to the timing shift of the Easter holiday [4]. Valuation - Crocs is trading at a forward 12-month price-to-earnings ratio of 7.11X, which is below both its five-year high of 34.18X and the industry average of 10.15X, indicating an attractive valuation opportunity [7]. Stock Performance - Over the past six months, Crocs' shares have decreased by 9.1%, contrasting with the industry growth of 17.6% [8].