Crocs (CROX) Stock Forecast & Price Target

Crocs Inc. exhibits a positive outlook due to strong direct-to-consumer sales, with a global increase of 6% and domestic growth of 2%, highlighting continued consumer enthusiasm for the brand. The company achieved a significant gross margin improvement, increasing by 220 basis points year-over-year, surpassing initial guidance, and is projected to expand further to 58.4% in FY24. Moreover, forecasts suggest a robust growth trajectory for the Crocs brand, anticipating a mid-single-digit percentage growth, driven by continued brand strength and heightened global awareness exceeding 90%.

Crocs Inc. is anticipated to face declining revenues in 2025, with expectations of a mid-teens drop in Q1 driven by wholesale challenges, including inventory takebacks. The brand is likely to struggle in North America following prior exceptional growth, compounded by the competitive footwear landscape and uncertainties surrounding the potential turnaround of the Hey Dude brand. Despite maintaining high EBIT margins compared to industry peers, the company's profitability may come under pressure due to increased investments in brand stabilization and a reduction in operating margins, which have been adjusted downward in light of expected SG&A deleverage.