Crocs, Inc. (NASDAQ:CROX) shares traded lower Thursday after the footwear maker reported a mixed first-quarter performance, as strength in its core brand and raised guidance failed to offset weakness in HEYDUDE and margin compression.

Earnings Beat Expectations, But Revenue Declines

The company posted adjusted earnings of $2.99 per share, topping the analyst consensus estimate of $2.77. Revenue declined 1.7% year over year to $921.5 million, but still exceeded expectations of $900.9 million.

Crocs brand revenue rose 0.8% to $767 million, though it declined 1.9% on a constant-currency basis. HEYDUDE revenue fell 12.3% to $154 million, or 13.2% on a constant-currency basis.

Direct-to-consumer sales increased 12.1%, or 10.2% on a constant-currency basis, while wholesale revenue dropped 9.9%, or 12.5% on a constant-currency basis.

Margins Under Pressure Despite Revenue Beat

Profitability weakened during the quarter. Adjusted gross margin declined 90 basis points to 56.9%. Adjusted operating income fell 7.8% to $206 million, resulting in an adjusted operating margin of 22.3%, down from 23.8% a year earlier.

Crocs ended the quarter with $131 million in cash and equivalents.

Annual Outlook Raised

Looking ahead, the company raised its full-year 2026 adjusted earnings guidance to a range of $13.20 to $13.75 per share, up from its prior outlook of $12.88 to $13.35. The updated range compares with the current consensus estimate of $13.34.

For 2026, Crocs expects its core brand revenue to be flat to up 2%, while HEYDUDE revenue is projected to decline 5% to 7%, an improvement from earlier guidance.

For the second quarter, Crocs forecasts adjusted earnings of $4.15 to $4.35 per share, compared with the consensus estimate of $4.30. The company expects revenue to come in below $1.149 billion, versus estimates of $1.127 billion.

Crocs projects second-quarter core brand revenue growth of 1% to 3%, while HEYDUDE revenue is expected to fall 12% to 14%. Adjusted operating margin is anticipated to be about 24.7%.

CROX Price Action: Crocs shares were down 1.29% at $98.85 at the time of publication on Thursday, according to Benzinga Pro data.

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