To The Moon

$Crocs(CROX)$  $Birkenstock Holding plc(BIRK)$  $Deckers Outdoor(DECK)$  This was not just a beat. It was a credibility reset!

Shares surged to $100.84 (intraday high $101.58), up ~$18 or +21.7–22% on the session following Q4 results and a materially stronger 2026 outlook.

📊 Earnings snapshot Crocs Inc.

$CROX, Q4-25

📊 Adj. EPS: $2.29 🟢 vs ~ $1.91 consensus

💰 Revenue: $958M 🟢 vs ~ $916–918M estimates

📈 Net Income: $105.17M

📦 FY25 Revenue: > $4B

Scale now works in their favour.

The core engine continues to deliver.

📌 Crocs Brand

Revenue +0.8% to $768M

DTC +6.1%

International delivered low double-digit full-year contribution

In a pressured consumer backdrop, that stability signals brand equity and pricing resilience.

📌 HeyDude

Q4 revenue –16.9%

Full-year –13.3% to $715M

This is a deliberate wholesale cleanup under new commercial leadership. The focus is healthier distribution and inventory discipline, with improved trends expected in the second half of 2026.

Margins and capital allocation are where this becomes compelling.

Adjusted gross margin: 54.7%, down 320 bps, largely tariff-driven.

Despite that pressure, Crocs generated:

• $659M free cash flow

• $577M share repurchases

• ~6.5M shares retired, roughly 10% of shares outstanding

• $128M debt reduction

That is meaningful per-share earnings compounding even in a tariff environment. Management targets $100M in cost savings for 2026 to help drive modest gross margin expansion.

📅 2026 Guidance

• Adj. EPS: $12.88–$13.35

• Street was near $12.00

• Q1 EPS: $2.67–$2.77, above expectations

Revenue outlook: flat to slightly down overall

• Crocs Brand: flat to +2%, ~10% international growth

• HeyDude: –7% to –9% during reset

Management is targeting modest gross margin expansion despite tariffs, supported by sourcing efficiencies and cost discipline. The “Wonderfully Unordinary” campaign reinforces brand differentiation in the global comfort segment.

📈 Tape Context

• Largest percent increase since Feb 2025 levels

• Highest level since Aug 2025

• +37% from 52-week low of $73.39

• Still –44% below its 2021 all-time high of $180.57

This is both a momentum event and a longer-term rerating setup.

📊 Valuation Tension

At ~$100–101 and midpoint 2026 EPS near $13.10, CROX trades roughly 7–8x forward earnings.

Global footwear peers often trade in the low-to-mid teens during stable growth cycles.

If execution stabilises HeyDude and margins expand as guided, even a 10–12x multiple on ~$13 of earnings implies materially higher equity value. That is the rerating path now back on the table.

Analyst tone is shifting.

• Needham raised its price target to $118, Buy

• Pre-earnings consensus sat near $95

• Targets are moving higher post-print

So the fork in the road is clear.

👉❓Is CROX:

• A structurally mispriced cash compounder with international runway and disciplined capital return

or

• A single-brand story where HeyDude remains a structural drag

Earnings credibility has been restored. Execution now determines the multiple.

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