American footwear company Crocs has reported consolidated revenue of $996 million for the third quarter of 2025, down 6.2% from $1.06 billion a year earlier.
For the three months to September 30, 2025, operating income decreased 23% to $208 million from $270 million, reducing operating margin to 20.8% from 25.4%.
Net income fell to $145.8 million compared to $200 million in the year-ago quarter.
The company’s gross margin, both on a reported and adjusted basis, contracted 110 basis points to 58.5% from 59.6% a year earlier.
Sales by channel showed contrasting trends. Direct-to-consumer (DTC) revenue increased 1.6%, or 0.9% at constant exchange rates, while wholesale revenue fell 14.7%, or 15.1% at constant exchange rates.
Within the brand’s results, Crocs brand revenue fell 2.5% to $836 million, or 3.2% in constant currency. The brand’s direct-to-consumer (DTC) sales increased 2% to $472 million, or 1.2% at constant exchange rates, while wholesale revenue decreased 7.9% to $364 million, or 8.4% at constant exchange rates.
By region, for the Crocs brand, revenue in North America fell 8.8% to $448 million, while international revenue rose 5.8% to $389 million, or 4.2% in constant currency.
HEYDUDE brand revenue fell 21.6% to $160 million, or 21.7% in constant currency. The brand’s DTC sales fell 0.5% to $91 million, or 0.7% in constant currency, and wholesale revenue fell 38.6% to $69 million, or 38.7% in constant currency.
During the quarter, the company repurchased 2.4 million shares for $203 million at an average price of $83.03 and reduced debt by $63 million.
Looking ahead to the fourth quarter of 2025, the company expects overall revenue to be about 8% lower than during the same period in 2024.
It anticipates Crocs brand revenue to decline around 3% year over year, and HEYDUDE revenue to decline in the mid-20% range.
Adjusted operating margin is forecast at around 15.5%.
On the other hand, capital spending for the entire year 2025 is projected between 70 and 75 million dollars.
Crocs CEO Andrew Rees said: “The strength of our profitability and cash flow enabled us to repurchase 2.4 million of our outstanding shares and repay $63 million of debt during the quarter, both critical levers of our value creation model. While our results exceeded expectations, we believe both of our brands have greater potential and we are working to regain momentum in the market.
“Looking ahead, in addition to the $50 million of gross cost savings in 2025, we have identified an additional $100 million of gross cost savings and are committed to driving operating leverage in 2026.”
“Crocs’ Q3 Revenue Falls 6.2% as Guidance Points to Softer Q4 2025” was created and originally published by Retail Insight Network, a brand owned by GlobalData.