CROX INVESTORS: Kirby McInerney LLP Reminds Crocs, Inc. Investors of Important Deadline and Encourages Investors to Contact the Firm

New York, New York--(Newsfile Corp. - February 27, 2025) - The law firm of Kirby McInerney LLP reminds investors that a class action lawsuit has been filed in the U.S. District Court for the District of Delaware on behalf of those who acquired Crocs, Inc. ("Crocs" or the "Company") (NASDAQ: CROX) securities during the period from November 3, 2022, through October 28, 2024 ("the Class Period"). Investors have until March 24, 2025, to apply to the Court to be appointed as lead plaintiff in the lawsuit.

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In February 2022, prior to the start of the Class Period, Crocs acquired HEYDUDE, a footwear brand focusing on casual, comfortable, and lightweight footwear. The Company reports HEYDUDE sales in two segments: direct-to-consumer ("DTC") sales; and wholesale sales. Although HEYDUDE was only acquired by Crocs in mid-February 2022, HEYDUDE accounted for approximately 25% of the Company's total revenues in 2022.

On April 27, 2024, Croc's CEO, Andrew Rees, revealed, on the Company's first quarter 2023 earning call, that much of HEYDUDE's revenue growth in 2022 was attributable to efforts to stock the Company's wholesale partners with HEYDUDE products and was not necessarily indicative of actual downstream retail sales. On this news, the price of Crocs shares declined by $23.46 per share, or approximately 16%, from $147.78 per share on April 26, 2023, to close at $124.32 per share on April 27, 2023.

On June 7, 2023, in an industry conference held by Robert W. Baird & Co. Incorporated, Rees provided additional detail regarding HEYDUDE's purported growth, explicitly informing investors that HEYDUDE's revenue growth was generated, in large part, by the Company's effort to stock HEYDUDE products with Croc's major retailers. Specifically, Rees stated that these wholesale stocking efforts accounted for $70 million in revenue in the second quarter of 2022 (out of 162.5 million in HEYDUDE wholesale revenues) and $60 million in revenue in the third quarter of 2022 (out of $181.8 million in HEYDUDE wholesale revenues). Additionally, Rees revealed that Crocs had intentionally made significant sales to the Company's major retail and wholesale partners, rather than gradually increasing third party HEYUDE inventory over several years to reflect actual retail demand for the product. On this news, the price of Crocs shares declined by $4.52 per share, from $121.09 per share on June 7, 2023, to close at $116.57 on June 8, 2023.

Then, on July 27, 2023, Rees admitted that Croc's deliberate overstocking accounted for approximately $220 million of HEYDUDE's $896 million in revenue for the period following the closing of the acquisition on February 17, 2022. Croc's then-CFO, Anne Mehlman, announced that Crocs was reducing HEYDUDE's revenue growth guidance for the fiscal 2023, to a range between 14% and 18% - substantially lower than previous guidance revenue growth in the mid-20s - effectively acknowledging that much of HEYDUDE's purported growth was based upon the Company's decision to overstock wholesalers. On this news, the price of Crocs shares declined by $17.50 shares, from $119.80 per share on July 26, 2023, to close at $102.30 per share on July 27, 2023.

Thereafter, on November 2, 2023, Crocs announced its financial results for the third quarter of 2023 and revealed that HEYDUDE's "wholesale revenues declined 19.4% to $146.5 million following prior year pipeline fill and as our wholesale partners were more cautious on at-once orders." As a result of the prior overstocking of HEYDUDE's products, Crocs further slashed its 2023 HEYDUDE revenue growth guidance from between 14% to 18%, to between only 4% and 6%. In connection with this announcement, Rees admitted that HEYDUDE "inventory was too high" and that the Company "is proactively lowering in-channel inventories" and "working with our strategic accounts to clean up that inventory and putting them in a strong sell-through and a more profitable position." On this news, the price of Crocs shares declined by $4.62 per share, from $87.41 per share on November 1, 2023, to close at $82.79 per share on November 2, 2023.

Later, on April 16, 2024, Crocs announced its separation form Rick Blackshaw, Executive Vice President and Brand President for HEYDUDE. On this news, the price of Crocs shares declined by $2.68 per share, from $123.36 per share on April 15, 2024, to close at $120.68 on April 16, 2024.

Finally, on October 29, 2024, Crocs reported its financial results for the third quarter of 2024. During the accompanying earnings call, Rees disclosed that HEYDUDE revenues fell below the Company's expectations and revealed that "HEYDUDE's recent performance and the current operating environment are signaling it will take longer than we had initially planned for the business to turn the corner." Rees attributed HEYDUDE's struggles to "excess inventories in the market" and admitted that "we've made good progress, but frankly, not quite all the progress we want to make" in resolving the inventory issue. On this news, the price of Crocs shares declined by $26.47 per share, or approximately 19.2%, from $138.05 per share on October 28, 2024, to close at $111.58 per share on October 29, 2024.

The complaint alleges that defendants, throughout the Class Period, misled investors by concealing the fact that the strong revenue growth exhibited by the Company's HEYDUDE brand following its acquisition in February 22, was largely driven by a conscious decision on the part of Crocs management to aggressively stock its third-party wholesaler pipeline with HEYDUDE products, regardless of the level of retail demand being experienced by those wholesalers, despite the fact that the Company's CEO had repeatedly assured investors that Crocs would not "play the game of forcing inventory into wholesalers and getting them overstocked."

If you purchased or otherwise acquired Crocs securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com or fill out the form below, to discuss your rights or interests with respect to these matters without any cost to you.

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Kirby McInerney LLP is a New York-based plaintiffs' law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm's efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP's website.

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