Crocs Shares Soar on HeyDude Optimism. Is It Too Late to Buy the Stock?

Crocs (NASDAQ: CROX) shares surged following the casual footwear company's fourth-quarter earnings report, as its namesake brand saw strong international sales and it predicted its beleaguered HeyDude brand would return to growth in the second half of 2026.

Let's dig into Crocs' Q4 results and outlook to see whether or not it's too late to buy the stock.

Image source: Getty Images.

Will the HeyDude anchor finally be removed?

Crocs' acquisition of HeyDude in 2022 has been an absolute disaster and could certainly go down as one of the worst acquisitions in the footwear space in recent years. However, with the company aggressively cleaning up HeyDude inventory in 2025, it could finally get the struggling brand to a better spot later this year.

For the quarter, Crocs brand sales edged up 1% to $768 million, in constant currencies. Crocs brand's direct-to-consumer (DTC) revenue grew 5% to $475 million, while wholesale revenue fell by 7% to $294 million. International growth led the way, with sales climbing 14% to $332 million, while North America revenue sank 7% at $436 million.

HeyDude revenue dropped 17% to $189 million, with DTC revenue flat at $133 million. Wholesale revenue plunged 41% to $56 million, due largely to its clean-up activity.

Overall revenue fell by about 3%, or 4% in constant currencies, to $958 million, which was much better than the 8% sales decrease it guided for earlier. DTC revenue rose about 5%, while wholesale revenue sank a little less than 15%. Gross margin contracted by 320 basis points to 54.7%. Adjusted earnings per share (EPS) sank 9% to $2.29, but that was well above its EPS guidance of between $1.82 and $1.92.

Data source: Crocs.

Looking ahead, Crocs guided for 2026 sales to edge up 1%, with Crocs brand revenue flat to up 2% and HeyDude revenue declining by between 7% and 9%. It is looking for adjusted EPS of between $12.88 and $13.35, compared to $12.51 in 2025.

For Q1, the company is looking for revenue to fall by 5.5% to 3.5%. It is projecting Crocs brand revenue to be down in the low single digits and HeyDude sales down 18% to 16%. Adjusted EPS is projected to be between $2.67 and $2.77.

Is it too late to buy the stock?

While Crocs doesn't expect big growth, it isn't sitting still. The company plans to expand its DTC footprint in international markets aggressively in 2026, opening between 200 and 250 new stores, mostly in China, India, and Western Europe. It's also expanding its sandal offering and will look to introduce other new silhouettes and innovations.

However, the biggest thing the company can do is to stabilize HeyDude. On this end, it will look to finish its inventory clean-up and reduce performance marketing spending. If it can return the brand to growth and return margins, this would be a big boost to the company.

From a valuation standpoint, Crocs' stock remains inexpensive, trading at a forward price-to-earnings ratio (P/E) of only 8 times, based on 2026 analyst estimates. Given that low valuation, I don't think it's too late to buy the stock.

Geoffrey Seiler has positions in Crocs. The Motley Fool recommends Crocs. The Motley Fool has a disclosure policy.