Heydude returns to growth as North America push stays wholesale-led

By James Calloway

Crocs raised its 2025 revenue outlook to about 3% growth on Thursday, up from 1% to 2%. Crocs expects the namesake brand to grow about 4% and Heydude to remain about flat.

Heydude delivered the sharper brand result in the third quarter. Its revenue rose more than 6% to $170 million. The Crocs brand rose 4.4% to $873 million and remained by far the larger business. Attention nevertheless shifted to Heydude, whose results showed early signs of recovery after a difficult period.

Total company revenue increased 4.6% and topped $1 billion for the quarter. Direct-to-consumer sales rose nearly 7%, while wholesale rose 1.8%. Needham analysts led by Tom Nikic said gross margin expanded 770 basis points to 66.2%, ending four consecutive quarterly declines. Net income grew nearly 50% to $216.8 million.

Needham analyst Tom Nikic said in a research note: “The Heydude brand achieved its long-awaited return to growth in Q3.” On Thursday's analyst call, CEO Andrew Rees called the quarter an important inflection for Heydude. He said the result supported the company's three-pillar strategy. Rees noted that growth reflected a comparison with weak results a year earlier.

How is Heydude trying to sustain growth?

Rees said the turnaround rests on three pillars: concentrating on the core consumer, diversifying the assortment thoughtfully and pushing more deeply into North America. Rees said he liked the existing portfolio and saw it as helping build brand awareness. Heydude also added sandals to the range, and Rees said they were outperforming expectations.

The strategy seeks broader reach without relying mainly on new stores. Rees said the portfolio performs the roles Crocs expects of it. Those roles include building awareness and showing consumers a wider range of Heydude products than they typically see in their local wholesale environment.

Will North American growth come from stores or wholesale?

Rees said Heydude is unlikely to open many new stores in North America. Wholesale provides a “more cost-effective way to reach our intended consumer,” he said. Wholesale drove Heydude's return to growth in the region, where sales through that channel increased 14%.

Crocs' annual report said the company ran 75 Heydude stores at the end of March, up from 54 a year earlier. Heydude's return to growth in North America came through wholesale during the same period.

What drove the record Crocs quarter?

Rees said the Crocs brand posted a record third quarter, powered by international sales and a more diversified product mix. A limited-edition Pendleton collaboration featured vibrant wool colors from Pendleton's woolen mills. Rees said the collaboration sold out at both Crocs and Pendleton.

What should buyers watch next?

Heydude's next phase will center on wholesale rather than a large new-store program. Crocs' outlook calls for roughly flat Heydude revenue in 2025 despite the third-quarter rebound. The test for the coming quarters is whether wholesale execution and a broader assortment can build on the sandal momentum Rees described.