Crocs, Inc. (CROX) Securities Class Action

The complaint alleges Crocs misled investors by concealing the fact that the strong revenue growth exhibited by its HEYDUDE segment following its acquisition was largely driven by a conscious decision by Crocs management to aggressively stock its third-party wholesaler pipeline with HEYDUDE products, regardless of the level of retail demand being experienced by those wholesalers.

Investors began to learn the truth on Apr. 27, 2023, when Rees revealed during Crocs’ Q1 2023 earnings call that much of HEYDUDE’s revenue growth during 2022 was attributable to efforts to stock wholesalers with HEYDUDE products and was not necessarily indicative of actual downstream retail sales.

Then, during a June 7, 2023 industry conference, Crocs management revealed that $70 million of Q2 2022 and $60 million of Q3 2022 HEYDUDE sales “was pipeline fill” and “[y]ou don’t sell through that all immediately.”

More bad news arrived on July 27, 2023, when Crocs revealed that pipeline fill during 2022 was $220 million, said “wholesale growth is expected to be low,” and slashed its HEYDUDE revenue growth outlook.

Next, during its Nov. 2, 2023 Q3 2023 earnings call, Crocs again slashed its HEYDUDE revenue outlook and blamed the cut on the company’s need to proactively lower in-channel inventories.

Most recently, on Oct. 29, 2024, Crocs disclosed that for Q4 2024 HEYDUDE revenue would be down 6% to 4% compared to the prior year period and for FY 2024 HEYDUDE revenue would be down 14.5% compared to the prior year. Management said, “from a HEYDUDE perspective, we have had excess inventories in the market and we’ve been aggressively trying to work those down this year[]” and “we absolutely shipped too much product” in 2022 and 2023.

Each of these events sent the price of Crocs shares significantly lower.

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the CROX investigation about?

We are investigating whether Crocs may have intentionally misled investors about the sustainability of its growth through improper channel-stuffin.

WHAT SHOULD I DO?

I worked at CROX. What should I do?

If you were an employee of CROX, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or [email protected].

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICIPATE?

Am I affected? What do I need to do to participate?

If you were an investor in CROX, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any CROX investor participate?

In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.