Crocs Inc. (NASDAQ:CROX) reported better-than-expected earnings for the third quarter of 2024, but its shares plummeted on Tuesday due to ongoing struggles with its HeyDude brand and a weak outlook for the holiday quarter.

For the three months ended September 30, Crocs posted adjusted earnings per share of $3.60, surpassing analysts' estimates of $3.10. Revenue grew 1.6% year-over-year to $1.06 billion, narrowly beating expectations of $1.05 billion. The company's performance was driven by a 7.4% increase in revenue for its iconic Crocs brand, fueled by strong international sales and growth in direct-to-consumer channels.

However, the HeyDude brand, which Crocs acquired in 2022, continued to underperform, with revenue declining by 17.4% year-over-year. This underperformance led Crocs to lower its full-year revenue growth guidance to around 3%, down from its previous range of 3% to 5%. The company now expects the HeyDude brand to experience a 14.5% revenue drop in 2024, worse than its earlier forecast of an 8% to 10% decline.

For the fourth quarter, Crocs projected revenue to be flat or slightly higher compared to the same period last year, while HeyDude brand revenue is expected to decline by 4% to 6%. The company's fourth-quarter earnings per share guidance of $2.20 to $2.28 fell short of analysts' expectations of $2.72.