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SEC filingCrocs Q1 2026 revenue fell 1.7% YoY to $921.5M, with gross margin contracting 100 bps to 56.8% due to tariffs.
Crocs, Inc. reported first quarter 2026 revenues of $921.5 million, a 1.7% decrease compared to $937.3 million in the prior-year quarter. The decline was driven by a 7.2% drop in unit sales volume across both brands, partially offset by a 3.2% increase in average selling price (ASP) and a 2.3% favorable impact from foreign currency fluctuations. Gross margin contracted 100 basis points to 56.8%, primarily due to 100 bps of incremental duties from newly imposed tariffs and 80 bps of unfavorable product mix, partially offset by 40 bps of higher Crocs Brand pricing and 30 bps of favorable brand mix. SG&A expenses rose 1.1% to $322.1 million, driven by higher DTC costs and $3.3 million in HEYDUDE leasehold impairment charges, partially offset by reduced marketing. Income from operations fell 9.9% to $200.8 million, and operating margin declined 200 bps to 21.8%. Net income decreased 14.1% to $137.6 million, with diluted EPS of $2.71 versus $2.83 in the prior year.
Crocs Brand revenues increased 0.8% to $767.4 million (down 1.9% on a constant currency basis), driven by higher ASP and favorable FX, offset by lower volume. Segment operating income fell 7.5% to $253.2 million, with gross margin down 120 bps to 59.5% due to duties and product mix. HEYDUDE Brand revenues declined 12.3% to $154.0 million (down 13.2% constant currency), primarily on lower volume, partially offset by higher ASP from reduced discounting. Segment operating income dropped 31.0% to $16.0 million, with gross margin down 270 bps to 43.9% on unfavorable product and channel mix. Enterprise corporate costs decreased 7.5% to $68.4 million due to workforce reductions.
Management highlighted several trends expected to persist: consumer pressure from inflation and elevated interest rates, cautious wholesale partners, and geopolitical tensions including the Middle East conflict impacting distributor markets and raw material costs. The U.S. Supreme Court's February 2026 ruling on IEEPA tariffs has led to an estimated $70 million in refunds for Crocs, though timing remains uncertain. The company is prioritizing a return to growth in North America for both brands through product innovation, sandals expansion, and pricing discipline for Crocs, and refined marketing and core product focus for HEYDUDE. Liquidity remains strong with $130.9 million cash and $849.9 million available borrowing capacity. In April 2026, the company resumed share repurchases, buying $73.6 million of stock, with $673.2 million remaining under authorization. No formal revenue or earnings guidance was provided for future periods.
As of March 31, 2026, Crocs had cash and cash equivalents of $130.9M and total debt (including current borrowings) of $1.34B, resulting in a net debt position of approximately $1.21B. Shareholders' equity stood at $1.43B, and inventory was $397.6M. The company maintains a $1.0B revolving credit facility with $840.4M undrawn, providing ample liquidity.
Purchase commitments to third-party manufacturers totaled $258.1M as of March 31, 2026, primarily for materials and supplies. Operating lease liabilities were $389.6M, with future minimum lease payments of $465.6M (discounted). No significant other contractual obligations were disclosed.
During Q1 2026, Crocs did not repurchase any shares, leaving $746.8M of remaining authorization under the buyback program. Net debt increased by $102.6M ($178.6M issued, $76.0M repaid), largely due to a $97M increase in the revolving facility and a new $5.6M Citibank facility. Capital expenditures were $18.0M (2.0% of revenue). No dividends were declared or paid.
The Crocs Brand generated $767.4M in revenue (83.3% of total), with North America contributing $345.9M and International $421.5M. Operating income was $253.2M (33.0% margin). The HEYDUDE Brand revenue was $154.0M (16.7% of total), with operating income of $16.0M (10.4% margin). Note 9 also provides sales channel breakdowns: Crocs Brand Wholesale $445.8M, DTC $321.6M; HEYDUDE Wholesale $83.4M, DTC $70.6M.