Crocs Inc.’s stock tumbled 15% Thursday after the company’s better-than-expected second quarter and raised guidance was overshadowed by a weaker-than-expected performance by its HeyDude brand, driven by weak demand from wholesalers. Revenue at HeyDude, a casual footwear brand that Crocs acquired in February of 2022 for about $2.5 billion, rose just 3%, as wholesale revenue fell 8.4% to $148.8 million following pipeline fill in the same period in 2022. Direct-to-consumer, or DTC, sales of HeyDude shoes were up about 30%.
said it now expects full-year revenue at HeyDude to grow 14% to 18%, down from previous guidance of mid-20% growth. Questions about HeyDude, which had been growing at meteoric rates, dominated the earnings call with analysts, with Chief Executive Andrew Rees saying the company’s wholesale partners are “pretty cautious on the back-half of the year. “I think they’re being cautious for kind of three reasons. One is they’re just cautious about overall traffic trends and the trajectory of the consumer. They’ve got some overstock in some other brands, principally some of the big athletic brands that they’re going to walk through. And they don’t have good history on HeyDude it in the back-half of the year. So we’re seeing very cautious bookings,” he said. Crocs has been changing its distribution model for HeyDude to bring it closer to the one it uses for the Crocs brand, with a focus on DTC sales and key ret …