Crocs, Inc. (CROX) Faces Securities Class Action over HEYDUDE Pipeline – Hagens Berman
SAN FRANCISCO - Investors in Crocs, Inc. (NASDAQ: CROX) suffered yet another loss on Oct. 29, 2024 after the company prepared investors for disappointing Q4 and FY 2024 financial results that, in turn, sent shares crashing $26.47 (-19%). According to the company, the culprit was its HEYDUDE operating segment performance. Now a class action lawsuit has been filed focused on the propriety of Crocs’ disclosures about sales practices within its HEYDUDE operating segment, which Crocs acquired in mid-February 2022.
More specifically, during the Class Period, Crocs CEO Andrew Rees assured investors that “our wholesale customers are being really prudent in terms of how they manage their business, in terms of managing their overall inventory levels[]” and “we’re not going to play the game of forcing inventory into them and getting them overstocked.”
Hagens Berman urges investors who purchased Crocs shares and suffered substantial losses to submit your losses now.
Class Period: Nov. 3, 2022 – Oct. 28, 2024
Lead Plaintiff Deadline: Mar. 24, 2025
Visit: www.hbsslaw.com/investor-fraud/crox
Contact the Firm Now: [email protected], 844-916-0895
Crocs, Inc. (CROX) Securities Class Action:
But, 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.
“We’re investigating whether Crocs may have intentionally misled investors about the sustainability of its growth through improper channel-stuffing,” said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you invested in Crocs and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses now »
If you’d like more information and answers to frequently asked questions about the Crocs case and our investigation, read more »
Whistleblowers: Persons with non-public information regarding Crocs should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new 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, call Reed Kathrein at 844-916-0895 or email [email protected].
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About Hagens Berman
Hagens Berman is a global plaintiffs’ rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman’s team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
