The direct-to-consumer (DTC) revenues grew 2.3 per cent YoY, or 3.5 per cent on a constant currency basis, and the wholesale revenues contracted 1.6 per cent, or approximately flat on a constant currency basis.
The gross margin of the company stood at 57.8 per cent compared to 55.6 per cent in Q1 2024, and the adjusted gross margin grew 180 basis points (bps) to 57.8 per cent compared to 56 per cent in the same quarter last year.
Meanwhile, the selling, general, and administrative (SG&A) expenses of the company increased 7.8 per cent to $319 million and represented 34 per cent of revenues.
The income from operations of $223 million decreased 1.5 per cent, resulting in operating margin of 23.8 per cent. The adjusted income from operations of $223 million decreased 12.5 per cent, resulting in adjusted operating margin of 23.8 per cent.
The diluted earnings per share (EPS) stood at $2.83, a rise of 13.2 per cent. Adjusted diluted EPS of $3.00 were approximately flat.
Crocs reported mixed performance across its two brands in Q1 2025. Revenues for the Crocs brand rose by 2.4 per cent YoY to $762 million, or 4.2 per cent on a constant currency basis. By channel, DTC revenues grew 1.1 per cent to $285 million (2.5 per cent constant currency), while wholesale revenues increased 3.2 per cent to $477 million (5.3 per cent constant currency), Crocs said in a press release.
Region-wise, North America saw a decline of 3.8 per cent to $369 million (3.4 per cent constant currency), whereas international revenues surged by 8.9 per cent to $393 million, or 12.3 per cent on a constant currency basis.
Conversely, the Heydude brand experienced a 9.8 per cent decline in revenues to $176 million (9.5 per cent constant currency). Within this, DTC revenues climbed 8.3 per cent to $65 million, while wholesale revenues dropped significantly by 17.9 per cent to $111 million (17.4 per cent constant currency).
Due to macroeconomic uncertainties stemming from global trade policies, the company is withdrawing its full year 2025 financial outlook that was provided on February 13, 2025, and is not providing a full year outlook at this time.
“We are incredibly proud of our better-than-expected first quarter performance despite what has been an increasingly volatile macroeconomic backdrop since the onset of the year. Both our Crocs and Heydude brands contributed to the outperformance with gross margins, operating margins, adjusted earnings per share, and cash flow coming in above plan. Our financial strength enabled us to return shareholder value through $61 million in share repurchases, while remaining well within our net leverage target range,” said Andrew Rees, chief executive officer (CEO) at Crocs.
“While we are pleased by the performance of our overall business in April, the new global trade environment as well as business and consumer uncertainty, has made it challenging to predict how consumers may respond in the future. Amid this heightened operating backdrop, we are withdrawing our guidance for 2025. We are committed to remaining transparent to our investment community, our consumers, and our customers as we work to chart a winning course,” added Rees. “We have a proven track record of coming out of periods of uncertainty stronger than when we entered them. I believe the current reality presents an opportunity to gain market share, as we focus on what we can control and lean into our clear, competitive advantages.”
ALCHEMPro News Desk (SG)
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