"I thought ugly shoes were a thing of the past"... Crocs shares stage stunning turnaround after plunging 30%

Strong Q3 results, HEYDUDE rebound
Shares surge 25% in a single day

Shares of U.S. footwear brand Crocs surged more than 25% in a single day, buoyed by strong third-quarter results and an upgraded full-year outlook. Results that topped market expectations, along with a recovery in sales at subsidiary HEYDUDE, which had previously struggled, drew a wave of investor buying.

According to U.S. financial news outlet 24/7 Wall St. and others on Oct. 29 (local time), Crocs shares closed at $150.26 on the New York Stock Exchange, up 25.54% from the previous trading day. During the session, they climbed as high as $151.82, their highest level in about two years. The stock’s rise was driven by third-quarter results that beat market forecasts and an upward revision to its full-year outlook.

A Crocs store in the U.S. AFP-Yonhap, Getty Images

Crocs shares plunged 30% last year...but rebound as results improve

The sharp rise in the stock contrasts with the slump Crocs experienced last year. When the company reported second-quarter results in August last year, it forecast that third-quarter revenue would fall 9% to 11% year over year. The market had expected modest growth, so investors were disappointed by the unexpectedly weak outlook, sending the stock down 29.2% in a single day. At the time, it fell to its lowest level in about three years and recorded its biggest decline since October 2011.

The weakness was attributed to factors including diminished purchasing power among U.S. consumers and changing trends in the footwear market. Crocs CEO Andrew Rees said some consumers were being cautious with their spending and expressed concern about declining store traffic. He expected the wholesale and outlet segments, which are used primarily by lower-income consumers, to be particularly affected.

Consumers’ shifting interest from Crocs’ signature clog-style shoes to sneakers also weighed on the company. Concerns about profitability grew further as costs rose amid U.S. tariff policies.

Crocs. Unsplash

Third-quarter results beat estimates...full-year outlook raised

Crocs reported adjusted third-quarter earnings per share (EPS) of $3.69, beating the Wall Street consensus estimate of $3.31 compiled by market research firm TipRanks. Revenue for the same period was $1.04 billion (about KRW 1.4 trillion), exceeding the market estimate of $1 billion.

Along with the improvement in results, the company also raised its full-year outlook. Crocs increased its forecast for adjusted EPS this year to $14.45-$14.65 from its previous range of $13.70-$14.00. It also raised its forecast for annual revenue growth to about 3% from its previous range of 1%-2%.

HEYDUDE, a subsidiary previously cited as a drag on results, also returned to growth. Third-quarter revenue at HEYDUDE increased 6.1% year over year. International revenue for the Crocs brand also rose 11.8% over the same period.

Crocs CEO Andrew Rees said, "In the third quarter, we recorded growth across our brands, sales channels and regions. The disciplined execution of our brand strategy also improved profitability year over year."

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