Crocs stock soars 25% as HeyDude sales return to growth

Crocs ( CROX ) stock soared 25% on Thursday to its highest price in over two years as investors cheered on a return to growth for the footwear company's HeyDude loafer brand and a brighter outlook for 2026 sales.

In the third quarter, HeyDude revenue increased 6.1% over the previous year to $170 million, marking the first sales increase in six quarters for the struggling shoe brand.

Crocs bought HeyDude for $2.5 billion in 2022, its largest acquisition ever. But the brand struggled amid excess inventory and discounting, causing investors to become fed up with lagging sales.

HeyDude makes up roughly 16% of Crocs' total revenue, while the flagship Crocs brand accounts for the remaining 84% of sales.

The return to growth for HeyDude marked "an important milestone" for the company, Crocs CEO Andrew Rees said in an earnings release . The company has spent the past few years trying to reduce bloated inventories and drum up excitement for the brand aimed at younger consumers through collaborations with brands like Buc-ees .

HeyDude marked just one part of a strong quarter for Crocs and is one chapter in the company's broader turnaround story.

Another success story, as my colleague Hamza Shaban pointed out this month, has been Crocs' ability to tame its input costs for oil-derived clogs as energy prices soared.

In the third quarter, overall revenue increased 4.6% year over year to $1.04 billion, beating the Street's expectations for $1 billion in sales, according to S&P Global Market Intelligence. Adjusted gross margins also swelled to 60.3%, up from 58.5% a year ago.

Adjusted earnings per share grew 26.4% year over year to $3.69, beating Wall Street's estimates of $3.31 per share.

On the back of the top- and bottom-line beats, Crocs raised its 2026 revenue and earnings per share guidance for the third time this year.

The company now expects revenue to increase 3% year over year, up from its previous guidance of up 1% to 2%. It sees adjusted earnings per share in a range of $14.45 to $14.65, up from $13.70 to $14 previously.

"Results and guide are legitimately solid, and our estimates will move higher," Stifel analysts wrote in a note. "HEYDUDE is stabilizing in real-time … though the magnitude of revenue upside vs. prevailing expectations requires consideration of the new revenue level, and capacity from which to grow."

Crocs stock is up 74% year to date. It's roughly 20% below its all-time high closing price of $180.57, reached in November 2021.