Bear of the Day: Crocs, Inc. (CROX)

Crocs, Inc. CROX continues to face a challenging environment due to the uncertainty on trade and tariffs. This Zacks Rank #5 (Strong Sell) is expected to see earnings fall 2.5% this year.Crocs is a footwear company based in Colorado. Its brands include Crocs and HEYDUDE which are sold in more than 80 countries, both wholesale and direct-to-consumer.Crocs Beat Again in the Second QuarterOn Aug 7, 2025, Crocs reported its second quarter results and beat on the Zacks Consensus by $0.22. It reported $4.23 versus the consensus of $4.01.It has not missed on earnings in 5 years. That’s an impressive track record, especially as it goes back to 2020, when the pandemic first hit.Revenue rose 3.4% to $1.15 billion. Direct-to-consumer revenue grew 4%, or 3.4% on a constant currency basis. Wholesale revenue rose 2.8%, or 2% on a constant currency basis.Gross margin grew 30 basis points to 61.7%, up from 61.4% a year ago.The flagship Crocs brand saw revenue rise 5% to $960 million, or 4.2% on a constant currency basis.North America Crocs revenue fell 6.5% to $457 million, or 6.4% on a constant currency basis. International revenue, however, jumped 18.1% to $502 million.HEYDUDE brand saw revenue fall 3.9% to $190 million.Inventories rose to $405 million from $377 million in 2024.  Cash and cash equivalents rose to $201 million from $168 million last year.Crocs has been paying down debt. It repaid $105 million in the quarter.It also has a big ongoing share repurchase program. It bought 1.3 million shares for $133 million at the average price of $102.24 in the quarter. At quarter end, it had about $1.1 billion remaining on the authorization.Crocs Only Guides for the Third Quarter 2025With trade and tariff policies uncertain, Crocs is not giving full year guidance. But it did provide it for the third quarter.Crocs expects revenue to be down between 11% to 9% compared to the third quarter of 2024.Earnings Estimates are Cut for 2025 and 2026The current environment is “uncertain and challenging to predict.” The analysts are bearish.1 estimate was cut in the last 7 days for 2025. It has pushed the Zacks Consensus down to $12.84 from $12.87. That’s an earnings decline of 2.5% as Crocs made $13.17 last year.1 estimate was also cut for 2026 in the last week, but earnings growth is still expected to rise 4.2% to $13.37.You can see the abrupt decline in the earnings estimates on this price and consensus chart.Image Source: Zacks Investment ResearchIs Crocs Cheap or a Trap?Shares of Crocs have plunged over the last year due to the trade uncertainty.Image Source: Zacks Investment ResearchIt’s trading with a forward price-to-earnings (P/E) ratio of 5.9. A P/E ratio under 10 is considered to be dirt-cheap.But with the earnings estimates now being cut, it has some of the value trap characteristics.Investors interested in Crocs might want to stay on the sidelines until there is some clarity about the tariffs.   Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Crocs, Inc. (CROX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks