Footwear company Crocs (NASDAQ: CROX) reported Q1 CY2025 results topping the market’s revenue expectations, but sales were flat year on year at $937.3 million. Its non-GAAP profit of $3 per share was 20.6% above analysts’ consensus estimates.
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Crocs (CROX) Q1 CY2025 Highlights:
- Revenue: $937.3 million vs analyst estimates of $909.1 million (flat year on year, 3.1% beat)
- Adjusted EPS: $3 vs analyst estimates of $2.49 (20.6% beat)
- Adjusted EBITDA: $250.3 million vs analyst estimates of $216.2 million (26.7% margin, 15.8% beat)
- Operating Margin: 23.8%, in line with the same quarter last year
- Free Cash Flow was -$82.61 million compared to -$43.32 million in the same quarter last year
- Constant Currency Revenue rose 1.4% year on year (6.9% in the same quarter last year)
- Market Capitalization: $5.65 billion
"We are incredibly proud of our better-than-expected first quarter performance despite what has been an increasingly volatile macroeconomic backdrop since the onset of the year. Both our Crocs and HEYDUDE brands contributed to the outperformance with gross margins, operating margins, adjusted earnings per share, and cash flow coming in above plan. Our financial strength enabled us to return shareholder value through $61 million in share repurchases, while remaining well within our net leverage target range," said Andrew Rees, Chief Executive Officer.
Company Overview
Founded in 2002, Crocs (NASDAQ: CROX) sells casual footwear and is known for its iconic clog shoe.
Sales Growth
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, Crocs’s sales grew at an exceptional 27.5% compounded annual growth rate over the last five years. Its growth beat the average consumer discretionary company and shows its offerings resonate with customers.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Crocs’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 4.2% over the last two years was well below its five-year trend. 
Crocs also reports sales performance excluding currency movements, which are outside the company’s control and not indicative of demand. Over the last two years, its constant currency sales averaged 3.9% year-on-year growth. Because this number aligns with its normal revenue growth, we can see that Crocs has properly hedged its foreign currency exposure. 
This quarter, Crocs’s $937.3 million of revenue was flat year on year but beat Wall Street’s estimates by 3.1%.
Looking ahead, sell-side analysts expect revenue to grow 2.5% over the next 12 months, a slight deceleration versus the last two years. This projection is underwhelming and indicates its products and services will face some demand challenges.
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Operating Margin
Crocs’s operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging 25.2% over the last two years. This profitability was elite for a consumer discretionary business thanks to its efficient cost structure and economies of scale.
This quarter, Crocs generated an operating profit margin of 23.8%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Crocs’s EPS grew at an astounding 54.1% compounded annual growth rate over the last five years, higher than its 27.5% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
In Q1, Crocs reported EPS at $3, down from $3.02 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Crocs’s full-year EPS of $13.12 to shrink by 4.2%.
Key Takeaways from Crocs’s Q1 Results
We enjoyed seeing Crocs beat analysts’ constant currency revenue expectations this quarter. We were also glad its EPS and EBITDA outperformed Wall Street’s estimates. Zooming out, we think this quarter featured some important positives. The stock traded up 2.7% to $103.72 immediately following the results.
Crocs may have had a good quarter, but does that mean you should invest right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
