By Denny Jacob

Crocs posted better-than-expected results in its latest quarter and signaled further growth ahead even as it continued to work through a few kinks, sending shares higher.

The clog and sandal company posted higher-than-expected earnings and revenue. Its namesake brand that accounts for most of its sales grew, and it also demonstrated stability at the struggling Heydude brand, which it had expected to post a sales decline.

Shares surged 23% to $109.22, putting it on pace for its largest percentage increase since January 2024. The stock is up about 1.9% over the last year.

Crocs said it expects 2025 to be another year of higher revenue for the company, led by its namesake brand. While its first-quarter outlook forecast a slow start to the year, it expects revenue in 2025 to grow up to 2.5%. Sales for its Crocs brand is expected to increase by 4.5% from 2024 levels, while Heydude is expected to decline between 7% and 9% during the same period.

Chief Financial Officer Susan Healy said Thursday that the company's guidance embeds an additional 10% tariff on goods imported from China as well as the anticipated additional 25% tariff on goods imported from Mexico beginning in March. She noted that Crocs doesn't have any production in Canada, which is also subject to pending tariffs.

The potential for tariffs between the U.S. and other countries to escalate further has left many companies planning for various contingencies and little certainty. Chief Executive Andrew Rees said that while the company isn't planning for significant price increases in the short-term, it doesn't necessarily know what's going to happen in the long term.

For now, investors are buoyed by the latest results. The company posted net income of $368.9 million on revenue of $989.8 million, up from $253.6 million in net income and $960.1 million in revenue a year earlier. The performance easily cleared Wall Street's predictions.

Sales of the Crocs brand rose 4% to $762 million in the quarter. Heydude revenue, meanwhile, was flat at $228 million. The company had forecast Heydude sales to decline as much as 6%.

Rees said Crocs is pleased with early signs of progress at Heydude and is taking a prudent approach to 2025 guidance for the brand.

Write to Denny Jacob at denny.jacob@wsj.com

(END) Dow Jones Newswires

February 13, 2025 15:13 ET (20:13 GMT)

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