Crocs shares have surged 28.1% over the past three months, outpacing the industry's 5.6% gain and the S&P 500's 4% rise, but the company is grappling with margin pressure and declining sales at both its Crocs and HEYDUDE brands. In the first quarter of fiscal 2026, enterprise adjusted gross margin fell 90 basis points to 56.9%, driven by a 100-basis-point tariff impact and unfavorable product mix, while Crocs brand sales slipped 2% and HEYDUDE sales dropped 13%. The company issued a cautious outlook, projecting second-quarter revenue to decline slightly and full-year enterprise revenue growth between down 1% and up 1%, with HEYDUDE still expected to post a 5% to 7% sales decline. The Zacks Consensus Estimate for current-quarter earnings per share has been revised up by 2 cents to $4.32 in the past seven days, but the current-year estimate has been trimmed by a penny to $13.66. CROX carries a Zacks Rank #4, or Sell, as analysts recommend reducing exposure or staying on the sidelines until there is clearer evidence of sustained improvement.
Crocs Incmargin pressure from tariff impact and unfavorable product mix, with declining sales at both brands
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