Crocs, Inc.
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CONTACT:
Portnoy Law Firm
Lesley F. Portnoy, Esq.,
www.portnoylaw.com
Office: 310.692.8883
1800 Century Park East, Suite 600
Los Angeles, CA 90067
info@portnoylaw.com
In February 2022, Crocs finalized its acquisition of HEYDUDE, a footwear brand known for its casual, comfortable, and lightweight designs.
However, on April 27, 2023, Crocs disclosed that the growth in HEYDUDE’s 2022 revenue was largely driven by efforts to stock the company’s wholesale partners with products, rather than actual retail sales. As a result, Crocs’ stock price dropped by $23.46, or 15.9%, closing at $124.32 per share on April 27, 2023, leading to losses for investors.
Then, on June 7, 2023, Crocs revealed that more than half of HEYDUDE’s third-quarter 2022 wholesale revenue came from efforts to supply products to Crocs’ major retailers. This caused Crocs’ stock price to fall by $4.52, or 3.7%, to $116.57 per share on June 8, 2023.
Shortly after, on July 27, 2023, Crocs acknowledged that its intentional overstocking had contributed to approximately $220 million of HEYDUDE’s $896 million in revenue for the period following the acquisition. The company also lowered its revenue growth forecast for HEYDUDE for the remainder of 2023. Following this news, Crocs’ stock price fell $17.50, or 14.6%, closing at $102.30 per share on July 27, 2023.
On August 16, 2023, Williams Trading LLC significantly reduced its price target for Crocs, citing high HEYDUDE inventory levels. This led to a decline in Crocs’ stock price by $3.79, or 3.9%, which closed at $94.01 per share on August 16, 2023.
Then, on November 2, 2023, Crocs reported its third-quarter 2023 financial results, revealing a substantial drop in HEYDUDE’s wholesale revenue “following prior year pipeline fill.” The company also slashed its 2023 HEYDUDE revenue growth forecast from 14%-18% to just 4%-6%. As a result, Crocs’ stock price fell by $4.62, or 5.3%, closing at $82.79 per share on November 2, 2023.
Finally, on October 29, 2024, during an earnings call, CEO Andrew Rees revealed that HEYDUDE’s revenue had again fallen short of expectations and was struggling due to “excess inventories in the market.” He further admitted that “in retrospect, we absolutely shipped too much product.” Following this revelation, Crocs’ stock price plummeted by $26.47, or 19.2%, closing at $111.58 per share on October 29, 2024.
