CROX 10-K & 10-Q changes, risk factors and insider trading

In the past, several footwear companies, including ours, have experienced periods of rapid growth in revenues and earnings followed by periods of declining revenues and losses, and our business may be similarly affected in the future. For example, during the second quarter of the fiscal year ended 2025, there was a triggering event for the HEYDUDE Brand indefinite-lived intangible assets (which consists solely of the HEYDUDE trademark) (the “trademark”) and the HEYDUDE Brand reporting unit (the ‘reporting unit”) goodwill. The triggering event was due to downward revisions during the second quarter of the fiscal year ended 2025 to our internal HEYDUDE Brand forecast as a result of the extended time we believed it would take us to stabilize the HEYDUDE Brand and return it to growth. This was partly due to the current and projected impact of a weak U.S. consumer and the disproportionate impact of tariffs on HEYDUDE Brand products, which became evident in the second quarter of the fiscal year ended 2025. See also the risk factor under “Financial and Accounting Risks — We may incur impairments of the carrying value of our goodwill and other intangible assets, which could have a material adverse effect on our business and financial results.” Consumer demand for our products and the equity of our brands could also diminish significantly if we, among other things, fail to preserve the quality of our products, are perceived to act in an unethical or socially irresponsible manner, fail to comply with laws and regulations, or fail to deliver a consistently positive consumer experience in each of our markets.

See also the risk factor under “Risks Specific to Our Company and Strategy — Our abilityfuture togrowth realizemay the benefits from the Acquisition is substantiallybe dependent in part on our ability to continue to grow HEYDUDE.”

We establish relationships with both celebrity endorsers and design, celebrity, and brand collaborators to develop, evaluate, and promote our products, as well as strengthen our brands. In a competitive environment, the costs associated with establishment and retention of these relationships may increase. If we are unable to maintain current associations and/or to establish new associations in the future, this could adversely affect our brands’ visibility and strength and result in a negative impact to financial results. In addition, actions takentaken, allegations of wrongdoing, or statements made by celebrity endorsers and collaborators associated with our products that harm the public image and reputations of those endorsers and collaboratorscollaborators, or our decisions to cease collaborating with them in light of actions taken, allegations of wrongdoing, or statements made by them, could also seriously harm the image of our brands with consumers and, as a result, could have an adverse effect on our sales and financial condition.

Changes in global economic conditions, including, but not limited to, those driven by tariffs and/or inflation, may adversely affect consumer spending and the financial health of our customers and others with whom we do business, which may adversely affect our financial condition, results of operations, and cash resources.

Uncertainty about current and future global economic conditions may cause consumers, wholesalers, and retailers to defer purchases or cancel purchase orders for our products in response to tighter credit, decreased cash availability, and weakened consumer confidence. Our financial success is sensitive to changes in general economic conditions, both globally and in specific markets, that may adversely affect the demand for our products including recessionary economic cycles, higher interest rates, higher tariffs, higher fuel and other energy costs, increased labor costs, declines in asset values, inflation, increases in commodity prices, higher levels of unemployment, higher consumer debt levels, higher tax rates and other changes in tax laws, public health issues likesuch theas COVID-19a pandemic, or other economic factors, certain of which effects, including cost inflation, we have experienced insince 2023 and 2024 and currently expect to continue to experience in 2025.2026.

•Changes in foreign currency exchange rates relative to the USD could have a material impact on our reported financial results. See the risk factor under “Risks Related to International Operations — Changes in foreign exchange rates, most significantly but not limited to the Euro, South Korean Won, and Chinese Yuan or other global currencies could have a material adverse effect on our business and financial results” for more information.

•If we are unable to mitigate the impact of supply chain constraintsconstraints, tariffs, and inflationary pressure through price increases or other measures, our results of operations and financial condition could be negatively impacted. Furthermore, even if we are able to raise the prices of our products, consumers might react negatively to such price increases, which could have a material adverse effect on, among other things, our brands, reputation, and sales.

In 2024, the Federal Reserve raised interest rates multiple times in response to concerns about inflation, though it subsequently lowered interest rates multiple times in 2025 and further interest rate changes remain uncertain. Higher interest rates, coupled with reduced government spending and volatility in financial markets may also increase economic uncertainty and negatively affect consumer spending. Similarly, the ongoing war between Israel and Hamas has created extreme volatility in the global capital markets and is expected to continue to have further global economic consequences, including disruptions of the global supply chain and energy markets. See “Ongoing wars could cause further disruptions in the global economy as well as a negative impact on our business, financial condition and results of operations.” Any such volatility and disruptions may adversely affect our business or the third parties on whom we rely. If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner, on favorable terms, or more dilutive. Increased inflation rates have already, and may continue to, adversely affect us by increasing our costs, including labor and employee benefit costs. In addition, higher inflation and macro turmoil and uncertainty could also adversely affect our customers, which could reduce demand for our products.

Pandemics, including the COVID-19 pandemic, epidemics, and other public health emergencies have, among other things, caused global macroeconomic uncertainty, disrupted consumer spending and supply chains, contributed to various global shipping delays and port congestions, and created significant volatility and disruption of financial markets. For example, global supply chain disruptions during fiscal years 2021 and 2022 negatively impacted our gross margins and net income and any pandemics, epidemics, and other public health emergencies could do so again in the future, which could have a material adverse effect on our business, financial condition, and results of operations.

We also rely on international shipping to transport our products to their various geographic markets. DuringAt times in the year ended December 31, 2022,past, international shipping to the U.S. washas been disrupted and delayed due to congestion in westports, coastand ports.despite Continuedour oractions additionalto mitigate these impacts, we have been negatively impacted by global logistics challenges. Additional delays in shipping may cause us to have to use more expensive air freight or other more costly methods to ship our products. DuringFurthermore, at times in the year ended December 31, 2022,past,, our third-party manufacturers, distribution centers, where we manage our inventory, and our third-party partners experienced disruptions that impacted our supply chain and increased global lead-time for our products, including port congestion, temporary closures, and worker shortages. Additionally, as a consequence of the COVID-19 pandemic, reductions in the number of ocean carrier voyages and capacity delayed the arrival of imports and increased ocean transport costs globally. We are facing challenges related to extended ocean transit times due to ongoing disruptions, including port strikes and delays at key transit points such as the Red Sea, Suez Canal, and Panama Canal. While these disruptions did not have a significant impact on our 2024 results, these factors, along with other global logistical issues, are contributing to continued unpredictability in ocean transportation. Additionally, supply chain labor costs have remained a significant pressure oversince the past 18 months,2023, as meaningful increases in pay rates were implemented to ensure a sufficient and stable workforce. As supply chain disruptions continue and we manage product availability, the timing of sales to our wholesale partners and consumers may continue to be impacted, and we face increased risk of order cancellations. In addition, global inflation has contributed to already higher incremental freight costs and such inflation may continue to result in higher freight costs. Failure to adequately produce and timely ship our products to customers could lead to lost potential revenue, failure to meet customer demand, strained relationships with customers, including wholesalers, and diminished brand loyalty.

All of our footwear products are manufactured by third-party manufacturers, the majority of which are located in Vietnam, China, Indonesia, India, and Mexico. We depend on the ability of these manufacturers to finance the production of goods ordered, maintain adequate manufacturing capacity, and meet our quality standards. We compete with other companies for the production capacity of our third-party manufacturers, and we do not exert direct control over the manufacturers’ operations. As such, from time to time we have experienced delays or inabilities to fulfill customer demand and orders, as discussed in more detail below. During the years ended December 31, 2025, 2024, and 2023, andapproximately 2022, approximately45%, 51%, 56%, and 53%,56%, respectively, of our Crocs Brand production was in Vietnam. Our largest third-party manufacturer for the Crocs Brand, with the majority of operations in Vietnam, produced approximately 45%, 50%, 47%, and 42%47% of our production during the years ended December 31, 2025, 2024, 2023, and 2022,2023, respectively, and our second largest third-party manufacturer for the Crocs Brand, primarily operating in both Vietnam and China, produced approximately 28%, 25%, 26%, and 27%26% of our production during the years ended December 31, 2025, 2024, 2023, and 2022,2023, respectively. During the years ended December 31, 20242025, 2024, and 2023, approximately 58%44%, 20%, and 83%,5%, respectively, of our HEYDUDE Brand production was in China.Vietnam. DuringPrior theto Partial Period,2025, the majority of our HEYDUDE Brand production was in China for the HEYDUDE Brand.China. We cannot guarantee that any third-party manufacturer will have sufficient production capacity, meet our production deadlines, or meet our quality standards. Furthermore, due to the relative concentration of our third-party manufacturers, we may be subject to an increased risk of supply chain disruption, particularly in the event of a natural disaster, pandemic, such as the COVID-19 pandemic, epidemic, geopolitical tension, or other event impacting the region outside of our control. In addition, disruption at the facilities of our third-party manufacturing partners as a result of COVID-19a pandemic or otherwise, including through the effects of facility closures, reductions in operating hours and labor shortages has had an adverse effect on our supply chain in 2021the and 2022past and may have a material adverse effect in the future. For example, at the end of 2021 and into the first quarter of 2022, many of our third-party manufacturing facilities in Vietnam were closed or not operating at full capacity due to local COVID-19 outbreaks and safety protocols, which negatively impacted our financial results. See the risk factor under “Supply chain disruptions could interrupt product manufacturing and global logistics and increase product costs” and “Our operations are dependent on the global supply chain and impacts of supply chain constraints and inflationary pressure could adversely impact our operating results.”

Foreign manufacturing is subject to additional risks, including transportation delays and interruptions, including those caused by the COVID-19 pandemic,pandemics, work stoppages, political instability, including the ongoing war between Israel and Hamas, the ongoing war between Russia and Ukraine, expropriation, nationalization, foreign currency fluctuations, changing economic conditions, cost inflation, changes in governmental policies or laws, and the imposition of tariffs, import and export controls, and other barriers. Because we do not manufacture products internally, we cannot offset any interruption or decrease in supply of our products by increasing production in internal manufacturing facilities, and we may not be able to substitute suitable alternative third-party manufacturers in a timely manner or at acceptable prices. Any disruption in the supply of products from our third-party manufacturers may harm our business and could result in a loss of sales and an increase in production costs, which would adversely affect our results of operations. In addition, manufacturing delays or unexpected demand for our products have required us, and may require us again in the future, to use faster, more expensive transportation methods, such as aircraft, which could adversely affect our profit margins. For example, duringFurthermore, the year ended December 31, 2022, we incurred approximately $67 million on an air freight program initiated as a result of partial COVID-19-related factory closures in Vietnam at the end of 2021. The cost of fuel is a significant component in transportation costs. Increases in the price of petroleum products can increase our transportation costs and adversely affect our product margins.

In addition, because our footwear products are manufactured outside the U.S., the possibility of adverse changes in trade or political relations between the U.S. and other countries, political instability, changes in legislation and policies, increases in labor costs, changes in international trade agreements and tariffs, adverse weather conditions, or public health issues, such as the COVID-19 pandemic,issues could significantly interfere with the production and shipment of our products, which would have a material adverse effect on our operations and financial results.

See also the risk factors under “Risks Related to International Operations — Government actions and regulations, such as export restrictions, tariffs, and other trade protection measures could adversely affect our business” and “Risks Related to International Operations — We conduct significant business activity outside the U.S., which exposes us to risks of international commerce.”

In addition, we rely on a number of company-operated and third-party operated distribution facilities around the world to warehouse and ship products to our customers and to our retail stores and perform other related logistics services. Our ability to meet our needs and the needs of our customers depends, in part, on the operation of these distribution centers. Our distribution centers generally utilize computer-controlled and automated equipment, which are subject to various risks, including software viruses, security breaches, power interruptions, or other system failures. If any of our distribution centers were to close or become inoperable or inaccessible for any reason, including, but not limited to, natural disasters, severe weather, labor shortages, fires, system failures, software viruses, security breaches, and/or pandemics, or if we fail to successfully consolidate existing facilities or transition to new facilities, we could experience a substantial loss of inventory, disruption of deliveries to our customers and our retail stores, increased costs, and longer lead times associated with the distribution of our products during the period that would be required to reopen or replace the facility. Any such disruptions could have a material adverse effect on our business, financial condition and results of operations.

Our operations have been,been in the past, and may continue to be, impacted by supply chain constraints and raw material shortages, resulting in increased material costs, longer lead times, port congestion, and increased freight costs, the uncertain economic environment, tariffs, and macroeconomic trends. In addition, current or future governmental policies may increase the risk of inflation, which could further increase the costs of raw materials and components for our business. Similarly, if costs of goods continue to increase, our suppliers may seek price increases from us. If we are unable to mitigate the impact of supply chain constraints and inflationary pressure through price increases or other measures, our gross margins, results of operations and financial condition could be negatively impacted. Even if we are able to raise the prices of our products, consumers might react negatively to such price increases, which could have a material adverse effect on, among other things, our brands, reputation, and sales. If our competitors substantially lower their prices, we may lose customers and mark down prices. Our profitability may be impacted by lower prices, which may negatively impact gross margins. We are unable to predict the impact of these constraints on the timing of revenue and operating costs of our business in the near future. Raw material supply shortages and supply chain constraints, including cost inflation, have impacted, and could continue to negatively impact our ability to meet consumer demand, which in turn has impacted, and could in the future impact our net sales revenues and market share. In addition, COVID-19 related closures negatively impacted our supply chain in Vietnam in the first quarter of 2022 and in China in the second quarter of 2022. See the risk factor under “Supply chain disruptions could interrupt product manufacturing and global logistics and increase product costs.”

The footwear industry is subject to cyclical variations, consolidation, contraction and closings, as well as fashion trends, rapid changes in consumer preferences, the effects of weather, general economic conditions, and other factors affecting consumer demand. In addition, purchase orders from our wholesale customers are generally subject to rights of cancellation and rescheduling by the wholesaler. These factors make it difficult to forecast consumer demand. If we overestimate demand for our products, we may be forced to liquidate excess inventories at discounted prices resulting in losses or lower gross margins. Conversely, if we underestimate consumer demand, we could have inventory shortages, which can result in lower sales, delays in shipments to customers, and expedited shipping costs, and adversely affect our relationships with our customers and diminish brand loyalty. Excess inventory, or any failure on our part to satisfy increased demand for our products, could adversely affect our business and financial results.

We require our third-party manufacturers to meet our quality control standards and footwear industry standards for working conditions and other matters, including compliance with applicable labor, environmental, and other laws; however, we do not control our third-party manufacturers or their respective labor practices. A failure by any of our third-party manufacturers to adhere to quality standards or labor, environmental, and other laws could cause us to incur additional costs for our products, generate negative publicity, damage our reputation and the value of our brands, and discourage customers from buying our products. We also require our third-party manufacturers to meet certain product safety standards. A failure by any of our third-party manufacturers to adhere to such product safety standards could lead to a product recall, which could result in critical media coverage; harm our business, brands, and reputation; and cause us to incur additional costs. Additionally, our industry is subject to significant pricing pressure caused by many factors, including, but not limited to, continued inflationary pressure, intense competition and a highly promotional retail environment, consolidation in the retail industry, pressure from retailers to reduce the costs of our products, excess inventory levels in the marketplace, and changes in consumer spending habits and patterns. Although we plan to limit our promotional activity, these foregoing factors may require us to reduce our sales prices to retailers and consumers, which could cause our gross margin to decline. If our sales prices decline and we fail to sufficiently reduce our product costs or operating expenses, our profitability will, in turn decline. In addition, changes in our customer, channel, and geographic sales mix could have a negative impact on our profitability. Any of these outcomes could have a material adverse effect on our business, financial condition, and results of operations.

As a global company, we have significant revenues and costs denominated in currencies other than the USD. We are exposed to the risk of losses resulting from changes in exchange rates on monetary assets and liabilities within our international subsidiaries that are denominated in currencies other than the subsidiaries’ functional currencies. Likewise, our U.S. subsidiaries are also exposed to the risk of losses resulting from changes in exchange rates on monetary assets and liabilities that are denominated in a currency other than the USD. We have experienced, and will continue to experience, changes in exchange rates, impacting both our statements of incomeoperations and the value of our assets and liabilities denominated in foreign currencies.

Further, our ability to sell our products in foreign markets and the USD value of the sales made in foreign currencies can be significantly influenced by changes in exchange rates. A decrease in the value of foreign currencies relative to the USD could result in lower revenues, gross margin compression, and increased losses from currency exchange rates. Foreign exchange rate volatility could also disrupt the business of the third-party manufacturers that produce our products by making their purchases of raw materials more expensive and more difficult to finance. For the Crocs Brand, we pay the majority of our third-party manufacturers, located primarily in Vietnam and China, in USD. For the HEYDUDE Brand, we pay the majority of our third-party manufacturers, located primarily in Vietnam and China, in Chinese Yuan.Yuan and USD. In 2024,2025, we experienced decreasesincreases in revenues of approximately $29.8$9.4 millionmillion, inor our Crocs Brand segment revenues,0.2%, primarily asdue ato resultfavorable of decreasesfluctuations in the valueEuro, ofpartially offset by unfavorable fluctuations in the South Korean Won, Brazilian Real, Japanese Yen, and Chinese Yuan relative to the USD. Strengthening of the USD against Asian and European currencies, and various other global currencies, adversely impacts our USD reported results due to the impact on foreign currency translation. While we enter into foreign currency exchange forward contracts to reduce our exposure to changes in exchange rates on monetary assets and liabilities, the volatility of foreign currency exchange rates is dependent on many factors that cannot be forecasted with reliable accuracy and, as a result, our forward contracts may not prove effective in reducing our exposures.

Government actions and regulations, such as export restrictions, tariffs, and other trade protection measuresmeasures, could adversely affect our business.

We, similar to many other companies with overseas operations, importsource, import, and sell products in other countries that have been impacted, and could continue to be impactedimpacted, by changes to the trade policies of the U.S. and foreign countries (including governmental action related to tariffs, international trade agreements, trade restrictions, or economic sanctions). Such changeschanges, which are out of our control, have the potential to adversely impact our industry and the global demand for our products, and as a result, could have a material adverse effect on our business, financial condition, and results of operations.

For example, in February 2025, the currentUnited States (“U.S. presidential administration”) has imposed tariffs on foreign imports intofrom themultiple Unitedcountries, States, including, most relevant to us,including an additional 10%incremental tariff of 20%, 20%, 19%, 18%, and 19% on all imports from ChinaVietnam, China, Indonesia, India, and anCambodia, additionalrespectively, 25%the tariffcountries on all imports from Mexico,in which tariffs on imports from Mexico were subsequently suspended for 30 days in order to facilitate negotiations. As of the date of this Annual Report, the proposed tariffs on all imports from Mexico remain suspended. A predominant portion of theour products we sell are originallyprimarily manufactured in countries other than the U.S., such as China and Mexico.manufactured. These tariffs willhave increaseincreased, and may continue to increase, the cost of certain products and negatively impact our results of operations. Furthermore, these foregoing factors may require us to increase prices for a greater number of products to offset tariffs. If we increase prices further, this could negatively impact consumer demand. At this time, it remains unclear what additional actions, if any, will be taken by the U.S. or other governments with respect to international trade agreements, the imposition of additional tariffs on goods imported into the U.S., tax policy related to international commerce, increased export control, sanctions and investment restrictions, or other trade matters. Although the ultimate scope and timing of any such actions is currently indeterminable, if implemented, they could have a material impact on our financial condition and results of operations. The ultimate impact of these and any other tariffs will depend on various factors, including the extent and duration of the tariffs and how other countries respond to the U.S. tariffs.

Other effects of these changes, including impacts on the price of raw materials, responsive or retaliatory actions from governments, such as retaliatory tariffs on imports into Chinathese and Mexicocountries from the U.S. and the opportunity for competitors not subject to such changes to establish a presence in markets where we participate, could also have significant impacts on our results of operations, though whether any of the foregoing actions will be taken remains unclear. Furthermore,The weresulting mayeffect noton begeneral ableeconomic toconditions increaseand on our business as a result of increases in prices for goods we import or our productssuppliers enoughand vendors purchase to offsetproduce tariffs,these whichitems couldthat impactwe acquire through our margins.supply Ifchain weare raiseuncertain pricesand independ responseon tovarious tariffs,factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our products may go down, which could have a negative impact on our sales.products. We cannot predict what further action may be taken with respect to export restrictions, tariffs or trade relations between the U.S. and other governments, and any further changes in U.S. or international trade policy could have an adverse impact on our business, financial condition and results of operations. See also the risk factor under “We conduct significant business activity outside the U.S., which exposes us to risks of international commerce.”

•political unrest, such as the ongoing war between Israel and Hamas,Hamas as well as the ongoing war between Russia and Ukraine, changes in law, terrorism, natural disasters, or public health issues like the COVID-19a pandemic, any of which can interrupt commerce;

In addition, we are subject to customs laws and regulations with respect to our export and import activity, which are complex and vary within legal jurisdictions in which we operate. We cannot ensure there will not be a control failure around customs enforcement despite the precautions we take. We are currently subject to audits by customs authorities. Any failure to comply with customs laws and regulations could be discovered during a U.S. or foreign government customs audit, or customs authorities may disagree with our tariff treatments, and such actions could result in substantial fines and penalties, which could have an adverse effect on our business and financial results. In addition, changes to U.S. trade laws may adversely impact our operations. These changes and any changes to the trade laws of other countries may add additional compliance costs and obligations and subject us to significant fines and penalties for non-compliance. Compliance with these and other foreign legal regimes may have a material adverse impact on our business and results of operations. For example, in 2021, the UFPLA, which effectively prohibits imports of any goods made either wholly or in part in a certain area of China, was signed into law, which generally prohibits importing goods made with forced labor into the U.S., subject to certain exceptions. While wethis law has not directly affected, nor do notwe currently expect that this law will directly affectaffect, our supply chain, since we do not believe that our suppliers source materials from such area of China for the products they sell to us or use to manufacture our products, other companies’ attempts to shift suppliers in response to this law or other policy developments could result in, among other things, shortages, delays, and/or price increases that could disrupt our own supply chain or cause our suppliers to renegotiate existing arrangements with us or fail to perform on such obligations. In addition, the ongoing war between Israel and Hamas as well as the ongoing war between Russia and Ukraine has adversely affected the global economy. For more information, please see the risk factors under “Risks Related to the Economy — Ongoing wars could cause further disruptions in the global economy as well as a negative impact on our business, financial condition, and results of operations,” “Risks Related to Our Supply Chain — We depend solely on third-party manufacturers located outside the U.S.,” “Risks Related to our Supply Chain — Our third-party manufacturing operations must comply with labor, trade, and other laws. Failure to do so may adversely affect us,” and “Risks Specific to Our Company and Strategy — Our business relies significantly on the use of information technology. A significant disruption to our operational technology or those of our business partners, a privacy law violation, or a data security breach could harm our reputation and/or our ability to effectively operate our business, and our financial results.”

If our online e-commerce sites, or those of our customers, or third-party digital marketplaces on which we operate, do not function effectively, our business and financial results could be materially adversely affected.

An increasing amount of our products are sold on our e-commerce sites and third-party e-commerce sites. Consumer expectations and the associated competitive pressures have increased and we expect that they will continue to increase relative to various aspects of our e-commerce channel, including speed of product delivery, the cost to ship our products, return policies and other evolving consumer expectations. Consumers are also increasingly using mobile-based applications and third-party digital marketplaces to engage with us and our competitors through digital experiences that are offered on mobile platforms, and we are increasingly using social media and other mobile applications to interact with our consumers as a means to market and sell our products to consumers and enhance their shopping experience. Any failure on our part or on the part of third parties to provide effective, reliable, user-friendly e-commerce platforms that offer a wide assortment of our products and that continually meet the evolving expectations of online shoppers or any failure to provide attractive digital experiences could place us at a competitive disadvantage, result in the loss of sales, and could have a material adverse impact on our business and financial results. Our e-commerce business may be particularly vulnerable to cyber threats including unauthorized access and denial of service attacks. Sales in our e-commerce channel may also divert sales from our retail and wholesale channels.

Many of our company-operated retail stores are located in shopping malls and outlet malls, and our success depends in part on obtaining prominent locations and the overall ability of the malls to successfully generate and maintain customer traffic. We cannot control the success of individual malls or store closures by other retailers, which may lead to mall vacancies and reduced customer foot-traffic. In addition, consumer spending and shopping preferences have shifted, and may continue to further shift, away from brick-and-mortar retail to e-commerce channels, both prior to, and as a result of, the COVID-19 pandemic, which may contribute to declining foot-traffic in company-operated retail locations. Continued reduced customer foot-traffic could reduce sales at our company-operated retail stores, including kiosks and store-in-store locations, or hinder our ability to open retail stores in new markets, which could in turn negatively affect our business and financial results. In addition, some of our company-operated retail stores occupy street locations that are heavily dependent on customer traffic generated by tourism. Any substantial decrease in tourism, resulting from an economic slowdown, political, terrorism, social, or military events, natural disasters, public health issues like the COVID-19a pandemic, or otherwise, is likely to adversely affect sales in our stores.

Specifically, over the last several years, we have implemented numerous information systems designed to support various areas of our business, including a fully-integrated global accounting, operations, and finance enterprise resource planning system, and warehouse management, order management, and internet point-of-sale systems, as well as various interfaces between these systems and supporting back-office systems. We have also moved to, and subsequently expanded, a new distribution center in Dayton, Ohio to serve our North American businesses for the Crocs Brand, and have moved to a new company-operated distribution center in the Netherlands and a new third-party operated distribution center in Japan to serve our international businesses for the Crocs Brand. Additionally, we have expanded our HEYDUDE Brand distribution center in Las Vegas, Nevada, and we further expanded our distribution capabilities of the HEYDUDE Brand by constructing a distribution facility in Nevada that opened in 2023. As our business grows, we may also need to make further investments in business systems and distribution capabilities. Issues in implementing or integrating new business operations, such as HEYDUDE, and new systems with our current operations, failure of these systems to operate effectively, problems with transitioning to upgraded or replacement systems, issues with transitioning to or operating our new distribution centers, cost overruns, or a breach in security of these systems could cause delays in product fulfillment and reduced efficiency of our operations, require significant additional capital investments to remediate, and may have an adverse effect on our business and financial results.

From time to time, we initiate litigation or are called upon to defend ourselves against lawsuits relating to our business. Due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of any such proceedings. For a detailed discussion of our current material legal proceedings, see Note 1817 — Legal Proceedings in the accompanying notes to the consolidated financial statements included in Part II - Item 8. Financial Statements and Supplementary Data of this Annual Report on Form 10-K. An unfavorable outcome in any of these proceedings, or any future legal proceedings, could have an adverse impact on our business and financial results. In addition, any significant litigation in the future, regardless of its merits, could divert management’s attention from our operations and result in substantial legal fees. InWe thehave past,also had securities class action litigation has been brought against us.us from time to time. If our stock price is volatile, we may become involved in this type of litigation again in the future. Any litigation could result in substantial costs and a diversion of management’s attention and resources that are needed to successfully run our business.

The effects of climate change, natural disasters such as earthquakes, hurricanes, tsunamis, or other adverse weather and climate conditions, and public health issues like the COVID-19a pandemic, whether occurring in the U.S. or abroad, may disrupt our operations or the operations of our vendors, other suppliers, or customers. Consequences of these events could include property damage, infrastructure damage leading to the inability of our employees and third parties to work, damage to our supply chain, unavailability of raw materials, increased manufacturing costs and disruptions to the productivity of our third-party manufacturers, disruptions to our distribution centers, disruptions to our retail stores, changes in consumer preferences or spending priorities, and energy shortages, which could result in negative impacts to our operating results and financial condition. Additionally, certain catastrophes are not covered by our general insurance policies, which could result in significant unrecoverable losses. Many governmental and other regulatory bodies worldwide are enacting regulations to mitigate the impacts of climate change. If we, our suppliers, or our third-party manufacturers are required to comply with these laws and regulations, or if we choose to take additional voluntary steps to reduce or mitigate our impact on the climate, we may experience increased costs for energy, production, transportation, and raw materials, increased capital expenditures, or increased insurance premiums and deductibles, each of which could adversely impact our operations. In addition, inconsistent regulations among jurisdictions may also affect our cost to comply with such laws and regulations. Any assessment of the potential impact of future climate change legislation, regulations, or industry standards, as well as any international treaties and accords, is uncertain given the wide scope of potential regulatory change in the countries in which we operate.

Furthermore, some stakeholders may disagree with our goals. There is also a risk that stakeholders may change their views on these topics over time. These parties and regulators may also hold divergent opinions on these issues as well as conflicting expectations regarding our culture, values, goals and business, which may affect how we are regulated or perceived. We are increasingly subject to scrutiny from institutional investors, advocacy organizations, and other stakeholders regarding our CRS policies, disclosures, and performance. Some stakeholders advocate for greater transparency and more aggressive CRS-related commitments in areas such as human capital, labor practices, supply chain oversight, and diversity. Others, including advocacy organizations and litigation-focused groups, have criticized these types of initiatives and have challenged companies, through lawsuits, regulatory investigations, and public campaigns, for implementing these types of strategies that they deem inconsistent with fiduciary duties or legal obligations. Moreover, we may determine that it is in the best interest of our Company and our stockholders to prioritize other business investments over the achievement of our current goals based on economic, technological developments, regulatory and social factors, business strategy or pressure from investors, activists, or other stakeholders.

Our Revolving Credit Agreement requires us to maintain certain financial covenants. A decline in our operating performance could negatively impact our ability to meet these financial covenants. If we breach any of these restrictive covenants, the lenders could either refuse to lend funds to us or accelerate the repayment of any outstanding borrowings under the Revolving Credit Agreement. We may not have sufficient funds to repay such indebtedness upon a default or be unable to receive a waiver of the default from the lenders. If we are unable to repay the indebtedness, the lenders could initiate a bankruptcy proceeding or collection proceedings with respect to our assets, all of which secure our indebtedness under the Revolving Credit Agreement. The foregoing risks also apply to our agreement (as amended to date, the “Term Loan B Credit Agreement.Agreement”) with respect to our senior secured term loan B facility (as amended to date, the “Term Loan B Facility”).

Our indebtedness, including the incurrence by us of substantial indebtedness in connection with the financing of the Acquisition, could adversely affect our business, financial condition, and results of operations, as well as the ability to meet payment obligations under our Revolving Credit Agreement, the Term Loan B Credit Agreement, and the Notes (as defined below).

To finance the Acquisition in part, we entered into an agreement (as amended to date, the “Term Loan B Credit Agreement”) with respect to a senior secured term loan B facility (as amended to date, the “Term Loan B Facility”) and borrowed under the Revolving Facility. The use ofOur indebtedness tohas, financeamong theother Acquisitionthings, reduced our liquidity and has caused, and could continue to cause, us to place more reliance on cash generated from operations to pay principal and interest on our debt, thereby reducing the availability of our cash flow for working capital and capital expenditure needs or to pursue other potential strategic plans. As of December 31, 2024,2025, we had $1,349.3$1,230.9 million in total indebtedness outstanding (net of $40.7$31.1 million of unamortized issuance costs related to the Term Loan B Facility and issuance of the Notes).

As of December 31, 2024,2025, we had approximately $1,349.3$1,230.9 million in total indebtedness outstanding (net of $40.7$31.1 million of unamortized issuance costs related to the Term Loan B Facility and issuance of the Notes), including $500.0 million outstanding on the Term Loan B Facility. We had borrowings outstanding of $190.0$62.0 million under the Revolving Facility, with total borrowing capacity of approximately $809.4$937.4 million thereunder (including $0.6 million of letters of credit outstanding as of such date).

In addition to financial measures presented on the basis of accounting principles generally accepted in the United States of America (“U.S. GAAP”), we present certain information related to our current period results of operations through “constant currency,” which is a non-GAAP financial measure and should be viewed as a supplement to our results of operations and presentation of reportable segments under U.S. GAAP. Constant currency represents current period results that have been retranslated using prior year average foreign exchange rates for the comparative period to enhance the visibility of the underlying business trends excluding the impact of foreign currency exchange rates on reported amounts.

Revenues were $4,102.1$4,040.6 million for the year ended December 31, 2024,2025, a 3.5%1.5% increasedecrease compared to the year ended December 31, 2023.2024. The increasedecrease was due to the net effects of: (i) lower unit sales volume in the HEYDUDE Brand, which decreased revenues by $87.4 million, or 2.1%; (ii) higher average selling price on a constant currency basis (“ASP”) indriven bothby brands,the HEYDUDE Brand, which increased revenues by $156.2$16.5 million, or 3.9%; (ii) higher unit sales volume, which resulted in an increase in revenues of $13.7 million, or 0.3%0.4%; and (iii) net unfavorablefavorable changes in exchange rates, which decreasedincreased revenues by $30.1$9.4 million, or 0.8%.0.2%.

•Selling, general & administrative expenses (“SG&A”) were $1,388.3$1,469.4 million compared to $1,173.2$1,364.3 million 2023,2024, primarily as a result of higher variable expenses related to higher revenues in the DTC channel and continuedincreased investment in talent and marketing.higher costs in the DTC channel. As a percent of revenues, SG&A increased to 33.8%36.4% of revenues compared to 29.6%33.3% in 2023.2024.

•Income from operations was $149.5 million for the year ended December 31, 2025, compared to income from operations of $1,021.9 million for the year ended December 31, 20242024. Net loss was $81.2 million, or $1.50 per diluted share, compared to income from operations of $1,036.8 million for the year ended December 31, 2023. Netnet income wasof $950.1 million, or $15.88 per diluted share, compared to $792.6 million, or $12.79 per diluted share, in 2023.2024.

(1) Changes for gross margin,margin and operating margin, and SG&A as a percentage of revenuesmargin are shown in basis points (“bp”).

Revenues. In the year ended December 31, 2024,2025, revenues increaseddecreased $139.8$61.5 million, or 3.5%,1.5%, compared to 2023.2024. The decrease in revenue was driven by lower volume of $87.4 million, or 2.1%, primarily due to lower volume in the HEYDUDE Brand, partially offset by higher volume in the Crocs Brand. Higher average selling price on a constant currency basis (“ASP”) for the HEYDUDE Brand increased revenues by $156.2$26.7 million, or 3.9%, primarily due to higher ASP in both brands,0.7%, driven mostly by net price increases, favorable channel mix, andpartially favorableoffset by unfavorable product mix. HigherThis volumeincrease of $13.7 million, or 0.3%, primarily due to higher volume in the Crocs Brand,was partially offset by lower volumeASP for the Crocs Brand, which decreased revenues by $10.2 million, or 0.2%, driven mostly by increased discounting, partially offset by favorable channel mix. Net favorable foreign currency fluctuations also increased revenues by $9.4 million, or 0.2%, primarily due to favorable fluctuations in the HEYDUDEEuro, Brand,partially alsooffset increased revenues. Netby unfavorable foreign currency fluctuations, primarilyfluctuations in the South Korean Won, Brazilian Real, Japanese Yen, and Chinese Yuan decreased revenues by $30.1 million, or 0.8%.Won.

Gross margin. Gross margin was 58.8%58.3% compared to 55.8%58.8% in 2023.2024. This was primarily drivendue byto theincremental absenceduties of prior130 yearbasis distributionpoints and higher freight and fulfillment costs of approximately 7040 basis points, primarilyfor associatedboth withbrands. theThe moveoverall to our new HEYDUDE distribution centerdecrease in Lasgross Vegas,margin Nevadawas thatoffset didin notpart recurby lower product costs in the currentCrocs year, higher ASP, as described above,Brand of 50 basis points, favorable customer mix of 5070 basis points, and favorable brand mix of 5030 basis points.

Foreign currency gains (losses), net. Foreign currency gains (losses), net, consists of unrealized and realized foreign currency gains and losses from the remeasurement and settlement of monetary assets and liabilities denominated in non-functional currencies as well as realized and unrealized gains and losses on certain foreign currency derivative instruments. During the year ended December 31, 2024,2025, we recognized realized and unrealized net foreign currency lossesgains of $6.8$9.8 million compared to losses of $1.2$6.8 million during the year ended December 31, 2023.2024.

Interest expense. Interest expense during the year ended December 31, 20242025, decreased $52.1$21.0 million, or 32.3%,19.2%, primarily due to lower outstanding borrowings and lower weighted average interest rates on each of the Term Loan B Facility (as defined herein) and the Revolving Facility (as defined herein) in the current year.

Income tax expense (benefit). During the year ended December 31, 2024,2025, we recognized an income tax expense of $154.2 million on pre-tax book income of $73.0 million, representing an effective tax rate of 211.3%, compared to an income tax benefit of $39.5 million on pre-tax book income of $910.6 million, representing an effective tax rate of (4.3)%, compared to an income tax expense of $83.7 million on pre-tax book income of $876.3 million in 2023,2024, which represented an effective tax rate of 9.6%.(4.3)%. The current year effective tax rate is lowerhigher primarily due to the currentimpairments yearof foreignthe netindefinite-lived incomeHEYDUDE trademark and HEYDUDE Brand reporting unit goodwill in 2025, which are not deductible for tax benefit as a result of an intra-entity transaction related to certain intellectual property rights, offset by the increase of valuation allowances.purposes. Our effective tax rate has varied dramatically in recent years due to intra-entity intellectual property rights transactions, differences in our profitability levels and relative operating earnings across multiple jurisdictions, and by changes in the valuation allowance.

During the three months ended December 31,In 2024, we completed an intra-entity transaction related to certain intellectual property rights primarily to align with current and future international operations. The transaction resulted in a step-up in tax basis of intellectual property rights and a correlated increase in foreign deferred tax assets based on the fair value of the intellectual property rights. Foreign deferred tax assets increased by $268.8 million and this benefit was offset by an increase in uncertain tax positions of $145.6 million. As such, a net change in deferred tax asset of $123.2 million was recognized along with a corresponding foreign income tax benefit.benefit in 2024. In 2024, we received new information and remeasured the reserve for uncertain tax positions related to the 2020 and 2021 intellectual property rights transactions which resulted in the release of uncertain tax positions of $141.2 million along with a corresponding foreign income tax benefit. As of December 31, 2025, the related net deferred tax asset, net of applicable valuation allowance and uncertain tax positions, was $289.8 million.

The 20242025 impact of changes in valuation allowances to the effective tax rate was an unfavorable impact of $58.9$58.2 million, equating to a 6.5%79.7% unfavorable impact. There is also a $0.9 million favorable change in the valuation allowance related to cumulative translation adjustments. We maintain valuation allowances of approximately $241.6$300.4 million as of December 31, 2024,2025, which may be reduced in the future depending upon the achieved profitability of certain jurisdictions as well as the magnitude of the profitability.

Income from Operations. During the year ended December 31, 2024,2025, income from operations for our Crocs Brand segment was $1,182.0$1,111.7 million, ana increasedecrease of $102.7$70.3 million, or 9.5%6.0% from 2023.2024. Gross margin was 61.6%61.3% for the year ended December 31, 2024,2025, ana increasedecrease of 16030 basis points compared to 2023.2024. The increasedecrease in gross margin was primarily due to lowerunfavorable duties and higher freight and fulfillment costscosts, andpartially favorableoffset by lower product mix.costs.

During the year ended December 31, 2024,2025, SG&A for our Crocs Brand segment increased by $109.3$89.5 million, or 15.0%,10.7%, compared to 2023,2024, primarily due to increasesincreased investments in talent and marketing costs, variable expenses related toand higher revenuescosts in the DTC channel, andas depreciationa result of investment in the channel and amortizationvariable expense.costs.

Revenues. During the year ended December 31, 2024,2025, HEYDUDE revenues decreased compared to 2023,2024, primarily due to lower volume. HigherThe ASPoverall decrease in revenues was drivenpartially offset by lesshigher discountingASP, inprimarily thedue current year andto favorable channel mix, partially offset by unfavorable product mix.

Income from Operations. For the HEYDUDE Brand, incomeloss from operations during the year ended December 31, 20242025, was $137.4$668.9 million, a decrease of $75.0$806.3 million, or 35.3%,586.8%, compared to 2023.2024. Gross margin was 47.7%44.8% for the year ended December 31, 2024,2025, ana increasedecrease of 370290 basis points.points, The increase in gross margin is largelyprimarily due to unfavorable duties, higher ASP,freight asand describedfulfillment above,costs, and higher product costs, partially offset by favorable channel mix, and lower freight costs. Additionally, there were prior year distribution costs associated with the move to our new HEYDUDE distribution center in Las Vegas, Nevada that did not recur in the current year, offset in part by transition costs and infrastructure investments incurred in the current year associated with the move.mix.

During the year ended December 31, 2024,2025, SG&AA, including asset impairments, for the HEYDUDE Brand segment increased by $50.3$733.0 million, or 24.4%,286.5%, primarily due to increasesthe inpartial marketingimpairment costs,of compensationthe costs,indefinite-lived HEYDUDE trademark and facilitiesHEYDUDE costs,Brand allreporting ofunit goodwill, as discussed above, which was partially relateoffset toby investmentsprior inyear our DTC channel. Impairmentimpairments costs of the right-of-use assets for our former HEYDUDE Brand warehouses in Las Vegas, NevadaNevada, that did not recur in the current yearyear. SG&A also contributedincreased overall for the HEYDUDE Brand due to theincreased increaseinvestments in SG&A.talent and higher costs in the DTC channel, as a result of investment in the channel and variable costs, mostly offset by decreased investments in variable marketing.

During the year ended December 31, 2024,2025, total net costs within ‘Enterprise corporate’ increased $42.6$4.2 million, or 16.7%,1.4%, compared to the same period in 2023,2024, primarily due to an increaseincreased investment in compensationtalent, costs.costs Anassociated increasewith inan impairmentoperational chargesworkforce duereduction, toand a current yearhigher information technology systemscosts, impairment of $18.2 million, partiallymostly offset by a prior year non-cash impairment ofcharge $9.3for millioninformation technology systems related to the right-of-useHEYDUDE assetintegration and leasehold improvement assets for our former corporate headquarters whichthat did not recur in the current year, also increased costs. Additionally, depreciation and amortization expense and information technology costs increased.year.

Repatriation of Cash and Cash Equivalents

All of the cash held outside of the U.S. could be repatriated to the U.S. as of December 31, 20242025, without incurring additional U.S. federal income taxes. In some countries, repatriation of certain foreign balances is restricted by local laws. These limitations may affect our ability to fully utilize our cash resources for needs in the U.S. or other countries and could adversely affect our liquidity. As of December 31, 2024,2025, we held $108.0$118.2 million of our total $180.5$130.4 million in cash and cash equivalents in international locations. This cash is primarily used for the ongoing operations of the business in the locations in which the cash is held. Of the $108.0$118.2 million, an insignificant amount couldis potentially becurrently restricted by local laws.laws or otherwise.

The Credit Agreement required or requires, as applicable,requires us to maintain a minimum interest coverage ratio of 3.00 to 1.00, and a maximum leverage ratio of (i) 4.00 to 1.00 from the quarter ended March 31, 2022 through, and including, the quarter ended December 31, 2023, (ii) 3.75 to 1.00 for the quarter ended March 31, 2024, (iii) 3.50 to 1.00 for the quarter ended June 30, 2024, and (iv) 3.25 to 1.00 for the quarter ended September 30, 2024 and thereafter (subject to adjustment in certain circumstances). The Credit Agreement permits, among other things, (i) stock repurchases subject to certain restrictions, including after giving effect to such stock repurchases, the maximum leverage ratio does not exceed certain levels; and (ii) certain acquisitions so long as there is borrowing availability under the Credit Agreement of at least $40.0 million. As of December 31, 2024,2025, we were in compliance with all financial covenants under the Credit Agreement.

On February 17, 2022, the Company entered into a credit agreement (the “Original Term Loan B Credit Agreement”) with Citibank, N.A., as administrative agent and lender, to among other things, finance a portion of the cash consideration for the Acquisition, which was amended on August 8, 20232023, (the “August 2023 Amendment”) and on February 13, 2024 (the “February 2024 Amendment”). The Original Term Loan B Credit Agreement, as amended by the August 2023 Amendment and the February 2024 Amendment is referred to herein as the “Term Loan B Credit AgreementAgreement.”.

The Original Term Loan B Credit Agreement provided for an aggregate term loan B facility in the principal amount of $2.0 billion. Prior to the February 2024 Amendment, the outstanding balance was $820.0 million. Among other things, the February 2024 Amendment provided for a new $820.0 million tranche of term loans (the “2024 Refinancing Term Loans” and, such facility, the “Term Loan B Facility”), to refinance the then-outstanding principal balance. The 2024 Refinancing Term Loans are secured by substantially all of the Company’s and each subsidiary guarantor’s assets on a pari passu basis with their obligations arising from the Term Loan B Credit Agreement and is scheduled to mature on February 17, 2029, subjectthough we have the ability to certainrequest exceptionsextensions as set forth in the Term Loan B Credit Agreement. Additionally, subject to certain conditions, including, without limitation, satisfying certain leverage ratios, the Company may, at any time, on one or more occasions, add one or more new classes of term facilities and/or increase the principal amount of the loans of any existing class by requesting one or more incremental term facilities Pursuant to the reduced interest rate margins applicable to the 2024 Refinancing Term Loans, each term loan borrowing which is an alternate base rate borrowing bears interest at a rate per annum equal to the Alternate Base Rate (as defined in the Term Loan B Credit Agreement), plus 1.25%. Each term loan borrowing which is a term SOFR borrowing bears interest at a rate per annum equal to the Adjusted Term SOFR Rate (as defined in the Term Loan B Credit Agreement) plus 2.25%.facilities.

As of December 31, 2024,2025, the Term Loan B Facility was fully drawn with no remaining borrowing capacity, and we had $500.0 million in outstanding principal on the Term Loan B Facility, which matures on February 17, 2029.Facility.

As of December 31, 2025, and 2024, we had no borrowings outstanding on the Citibank Facility. As of December 31, 2023, we had borrowings outstanding of $3.3 million on the Citibank Facility.

The Company had or will have, as applicable,has the option to redeem all or any portion of the 2029 Notes, at once or over time, at any time on or after March 15, 2024, at a redemption price equal to 100% of the principal amount thereof, plus a premium declining ratably on an annual basis to par and accrued and unpaid interest, if any, to, but excluding, the date of redemption. The Company also had the option to redeem some or all of the 2029 Notes at any time before March 15, 2024 at a redemption price of 100% of the principal amount to be redeemed, plus a “make-whole” premium and accrued and unpaid interest, if any, to, but excluding, the date of redemption. In addition, at any time before March 15, 2024, the Company could have redeemed up to 40% of the aggregate principal amount of the 2029 Notes at a redemption price of 104.250% of the principal amount with the proceeds from certain equity issuances, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption.

Operating Activities. Our primary source of liquidity is cash provided by operating activities, consisting of net income adjusted for non-cash items and changes in working capital. Cash provided by operating activities increaseddecreased $62.0$282.1 million for the year ended December 31, 20242025, compared to the year ended December 31, 2023,2024, driven by higher net income, adjusted for non-cash items, of $360.1 million, partially offset by decreases in operating assets and liabilities of $298.1$288.9 million, primarily due to the changedecrease in income taxes payable, accounts receivable, and inventories.inventories, partially offset by an increase in net income, adjusted for non-cash items, of $6.8 million.

Investing Activities. There was a $46.3$18.1 million decrease in cash used in investing activities for the year ended December 31, 20242025, compared to the year ended December 31, 2023.2024. This was due to a decrease in purchases of property, equipment, and software, primarily as a result of prior year purchases related to the expansion of our distribution centers and headquarters in North America in the year ended December 31, 2023, that did not recur in the current year.software.

Financing Activities. Cash used in financing activities increaseddecreased by $26.4$171.5 million in the year ended December 31, 20242025, compared to the year ended December 31, 2023.2024. The increasedecrease in cash used in financing activities was primarily due to a decrease in proceedsrepayments, from borrowingsnet of $155.7borrowings, million,of $195.2 million. There were other decreases in cash used of $6.2 million. The overall decrease in cash used in financing activities was partially offset by an increase of $377.4$29.9 million in repurchases of common stock, including excise tax, and an increase of $0.5 million in deferred debt issuance costs. The overall increase in cash used in financing activities was offset by a decrease in repayments of borrowings of $498.3 million, a decrease of $8.8 million in repurchases of common stock for tax withholding, and other decreases in cash used of $0.1 million.tax.

On AprilFebruary 23,10, 2021,2025, the Board approved and authorized a program to repurchase up to $1.0 billion of our common stock. Additionally, on September 23, 2021, the Board approved an increase of $1.0 billion to our sharethen-existing common stock repurchase authorization. The number, price, structure, and timing of the repurchases are at our sole discretion and may be made depending on market conditions, liquidity needs, restrictions under the agreements governing our indebtedness, and other factors. The Board of Directors may suspend, modify, or terminate the program at any time without prior notice. Share repurchases may be made in the open market or in privately negotiated transactions. The repurchase authorization does not have an expiration date and does not obligate us to acquire any amount of our common stock. Under Delaware state law, these shares are not retired, and we have the right to resell any of the shares repurchased.

As of December 31, 2024,2025, we had remaining authorization to repurchase approximately $323.9$746.8 million of our common stock, subject to restrictions under our Indentures, Credit Agreement, and Term Loan B Credit Agreement. On February 10, 2025, the Board approved a $1.0 billion increase to our share repurchase authorization, after which approximately $1.3 billion remained available for future common stock repurchases.

When performing our annual test for impairment, we may assess goodwill and indefinite-lived intangible assets for potential impairment using either a qualitative or quantitative assessment. The qualitative assessment may evaluate factors such as macroeconomic conditions, industry and market considerations, and overall financial performance, among other factors. If we determine that it is more likely than not that the fair value of a reporting unit or an indefinite-lived intangible asset is less than its carrying value, a quantitative assessment is performed. For the quantitative assessment, we compare the estimated fair value of athe trademark and reporting unit with itstheir respective carrying value, including the goodwill assigned to the reporting unit. If carrying value of the reporting unit exceeds its estimated fair value, an impairment charge is recorded. In the second quarter of the fiscal year ended 2025, we recorded an impairment charge related a triggering event for the HEYDUDE Brand indefinite-lived intangible assets (which consists solely of the HEYDUDE trademark) (the “trademark”) and the HEYDUDE Brand reporting unit (the “reporting unit”) goodwill.

•We continue to operate in an environment where consumers are feeling the effects of elevated interest rates, inflation, and future expected price increases, among other things, and as a result, there is more pressure on discretionary spending. Given this, our wholesale partners are also acting cautiously. In addition, geopolitical tensions have increasedremained elevated across the globe and are having an adverse impact on the global economy. Most recently, the conflict in the Middle East has caused, and may continue to cause, a reduction in our revenues for several of our distributor markets and an increase in the costs of raw materials and transportation associated with elevated oil prices. Furthermore, as of June 30, 2026, the United States (“U.S.”) has imposed tariffs on foreign imports from multiple countries, including, most relevant to us, a 10% tariff on all imports from Vietnam, China, Indonesia, India, and Cambodia, respectively. On February 20, 2026, the United States Supreme Court ruled the President did not have the requisite authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). On March 4, 2026, the Court of International Trade ordered U.S. Customs and Border Protection to begin the refund process for all importers who were subject to IEEPA duties. While the timing remains uncertain, we currently estimate that we are eligible to receive a total of approximately $70 million in refunds related to these tariffs. As of June 30, 2026, no refunds were realized or considered realizable; accordingly, no benefit has been recognized under the gain contingency model. Subsequent to June 30, 2026, we received approximately $20 million of IEEPA tariff refunds. The corresponding benefit is expected to be recognized within ‘Cost of sales’ in the condensed consolidated statements of operations during the third quarter of 2026. Additionally, in July 2026, the aforementioned 10% tariffs expired and were replaced with new tariffs ranging from 10% to 12.5%. At this time, it remains unclear what additional actions, if any, will be taken by the U.S. or other governments with respect to international trade agreements, the imposition of additional tariffs on goods imported into the U.S., tax policy related to international commerce, increased export control, sanctions and investment restrictions, trade matters, war, or foreign policy in general. We are continuing to monitor developments with respect to these policy changes and proposals.

•We are prioritizing returningcontinue to prioritize growth in North America for both brands, while making progress on our long-term strategic initiatives. Specifically for the Crocs Brand, we believe this will be driven by product innovation, diversification within key product categories, including growth within our sandals business, and ultimately prioritizing stricter segmentation and pricing discipline across the marketplace. For the HEYDUDE Brand, we are focused on our core consumer, refining our marketing toward our target consumers, focusing on our core product offering,offering within the slip-on category, and refreshing the marketplace. For both brands, scaling digital capabilities continues to be a priority.

•Our liquidity position remains strong with $130.9$170.3 million in cash and cash equivalents and $849.9$880.4 million in available borrowing capacity as of MarchJune 31,30, 2026. Our total borrowings were $1.3 billion as of MarchJune 31,30, 2026. We alsorepurchased resumed our share repurchase program in April 2026, repurchasing $73.6$250.6 million of our common stock throughduring Aprilthe 23, 2026.quarter.

FirstSecond Quarter 2026 Financial and Operational Highlights

Revenues were $921.5$1,179.5 million for the firstsecond quarter of 2026, a 1.7%2.6% decreaseincrease compared to the firstsecond quarter of 2025. The decreaseincrease was due to the net effects of: (i) lower unit sales volume in both brands, which resulted in a decrease in revenues of $67.9 million, or 7.2%; (ii) higher average selling price on a constant currency basis (“ASP”) driven by both brands, which increased revenues by $30.3$37.9 million, or 3.2%3.3%; (ii) lower unit sales volume in the HEYDUDE Brand, partially offset by higher unit sales volume in the Crocs Brand, which resulted in a decrease in revenues of $14.1 million, or 1.2%; and (iii) net favorable changes in exchange rates, which increased revenues by $21.7$6.3 million, or 2.3%.0.6%.

The following were significant developments affecting our businesses and capital structure during the three months ended MarchJune 31,30, 2026:

•Crocs Brand revenues increased by 0.8%,4.3%, or decreased by 1.9%3.7% on a constant currency basis, compared to the same period in 2025. HEYDUDE Brand revenues decreased 12.3%,5.7%, or 13.2%5.8% on a constant currency basis, compared to the same period in 2025.

•Gross margin was 56.8%,59.4%, a decrease of 100230 basis points from last year’s firstsecond quarter, primarily due to unfavorable duties for both brands, as a result of the aforementioned incremental tariffs,tariffs. and unfavorableUnfavorable product mix forin boththe brands.Crocs Brand also contributed to the decrease, partially offset by lower product costs in the Crocs Brand.

•Selling, general and administrative expenses (“SG&A”) were $322.1$415.0 million compared to $318.6$398.2 million in the firstsecond quarter of 2025, primarily due to higher costs in the direct-to-consumer (“DTC”) channel, including investments in the channel driven by the Crocs Brand and impairment charges related to HEYDUDE leasehold improvement assets,Brand, partially offset by reduced marketing costs for the HEYDUDE Brand. As a percent of revenues, SG&A increased to 35.0%35.2% of revenues compared to 34.0%34.6% of revenues in the firstsecond quarter of 2025.

•Income from operations decreasedincreased to $200.8$285.7 million from $223.0a loss from operations of $427.5 million in last year’s firstsecond quarter. The increase is driven primarily by asset impairments that did not recur in the current year, as described above. Net income was $137.6$204.9 million, or $2.71$4.13 per diluted share, compared to $160.1a net loss of $492.3 million, or $2.83a net loss per diluted share,share of $8.82, in last year’s firstsecond quarter.

Revenues. In the three months ended MarchJune 31,30, 2026, revenues decreasedincreased compared to the same period in 2025, primarily due to lowerhigher volumeASP of $67.9$37.9 million, or 7.2%,3.3%, driven by favorable channel mix and pricing in both brands, partially offset by unfavorable product mix in both brands. Net foreign currency fluctuations also increased revenues by $6.3 million, or 0.6%, primarily due to favorable fluctuations in the Chinese Yuan, partially offset by unfavorable fluctuations in the South Korean Won. The overall decreaseincrease in revenues was partially offset by higherlower ASPvolume of $30.3$14.1 million, or 3.2%,1.2%, driven by favorable channel mix in both brands. Net favorable foreign currency fluctuations of $21.7 million, or 2.3%, primarily in the Euro,HEYDUDE also increased revenues.Brand.

Gross margin. Gross margin decreased in the three months ended MarchJune 31,30, 2026, to 56.8%59.4% compared to 57.8%61.7% in the same period in 2025, primarily due to incremental duties of 100170 basis points,points and unfavorable product and customer mix of 80 basis points partially offset by increased pricing forin the Crocs Brand of 40100 basis pointspoints, andpartially favorableoffset brandby mixlower product costs in the Crocs Brand of 30100 basis points.

Selling, general and administrative expenses. SG&A increased $3.5$16.8 million, or 1.1%,4.2%, induring the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily due to higher DTC costs of $7.9$12.2 million, driven by increased share of marketplaces and rent expense as a result of investments in the channelchannel. asIncreased wellcompensation as variable sales costs. Impairment chargescosts of $3.3$5.6 million relatedand toother HEYDUDEnet leaseholdincreases improvementin assetsother costs of $6.5 million also contributed to the increase. The overall increase in SG&A was partially offset by decreases of $5.3 million inreduced marketing costs andof net$7.5 decreasesmillion, indriven otherby coststhe HEYDUDE Brand as part of $2.4our million.previously announced cost savings initiatives.

Foreign currency gains (losses), gains, net. Foreign currency gains (losses), gains, net, consist of realized and unrealized foreign currency gains and losses from the remeasurement and settlement of monetary assets and liabilities denominated in non-functional currencies as well as realized and unrealized gains and losses on foreign currency derivative instruments. During the three months ended MarchJune 31,30, 2026, we recognized realized and unrealized net foreign currency losses of $1.6$2.3 million compared to gains of $4.9$0.4 million during the three months ended MarchJune 31,30, 2025.

Interest expense. Interest expense during the three months ended MarchJune 31,30, 2026, decreased $2.3$2.6 million, or 10.1%,11.6%, compared to the three months ended MarchJune 31,30, 2025. Interest expense during the six months ended June 30, 2026, decreased $4.9 million, or 10.9%, compared to the six months ended June 30, 2025. The decrease in interest expense for the three and six months ended MarchJune 31,30, 2026, was due to lower outstanding borrowings and lower weighted average interest rates on the Term Loan B Facility (as defined herein) and the Revolving Facility (as defined herein) in the current year.

Income tax expense. During the three months ended MarchJune 31,30, 2026, income tax expense decreasedincreased $3.5$15.4 million compared to the same period in 2025. The effective tax rate for the three months ended MarchJune 31,30, 2026, was 23.1%22.4% compared to an effective tax rate of 21.9%(9.7)% for the same period in 2025,2025. an increase of 120 basis points. This increase in theThe effective tax rate was primarilythe drivenresult byof aquarterly shifttax expense compared to the impact of the income (loss) before income taxes related to the impairments of the indefinite-lived HEYDUDE trademark and HEYDUDE Brand reporting unit goodwill in the mixthree months ended June 30, 2025. As a result of oura domesticprior year intra-entity transaction, the value of the intellectual property for tax purposes is subject to revaluation and foreigntherefore earnings.there are not similar impacts for tax as a result of the intellectual property impairment. Our effective income tax rate, for each period presented, also differs from the federal U.S. statutory rate due to differences in income tax rates between U.S. and foreign jurisdictions.

Revenues. Crocs Brand revenues increased in the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily due to higher ASP, driven by favorable channel mix,mix and netprice favorable foreign currency fluctuations, primarilyincreases in theinternational Euro. The overall increase wasmarkets, partially offset by lowerunfavorable volume.product mix. Higher volume and net foreign currency fluctuations also increased revenues, primarily due to favorable fluctuations in the Chinese Yuan, partially offset by unfavorable fluctuations in the South Korean Won.

Income from Operations. Income from operations for our Crocs Brand segment was $253.2$352.1 million for the three months ended MarchJune 31,30, 2026, a decrease of $20.5$6.3 million, or 7.5%,1.8%, compared to the same period in 2025. Gross margin was 59.5%,62.6%, a decrease of 120150 basis points, primarily due to unfavorableincremental duties and unfavorable product mix, partially offset by increasedlower pricingproduct in certain regions.costs.

SG&A for our Crocs Brand segment increased $14.3$17.4 million, or 7.6%,6.8%, during the three months ended MarchJune 31,30, 2026, compared to the same period in 2025. This increase was primarily due to higher costs in the DTC channel, includingdriven investmentby increased share of marketplaces and rent expense as a result of investments in the channelchannel. andCompensation variablecosts costs,also andcontributed increasedto investmentsthe in marketing.increase.

Revenues. For the three months ended MarchJune 31,30, 2026, HEYDUDE Brand revenues decreased compared to the same period in 2025, primarily due to lower volume. The overall decrease in revenues was partially offset by higher ASP, primarily due to favorable channel mix and reduced discounting.discounting, partially offset by unfavorable product mix.

Income from Operations. Income from operations for the HEYDUDE Brand segment was $16.0$22.4 million for the three months ended MarchJune 31,30, 2026, aan decreaseincrease of $7.2$728.4 million, or 31.0%, compared to income from operations in the same period in 2025. Gross margin was 43.9%,43.1%, a decrease of 270710 basis points, primarily due to incremental duties and unfavorable channel and product mix and channel mix, partially offset by higher ASP, driven by decreased discounting.mix.

SG&AA, including impairments, for the HEYDUDE Brand segment decreased $7.0$746.6 million, or 11.9%,93.2%, during the three months ended MarchJune 31,30, 2026, compared to the same period in 2025. This decrease was primarily due to reducedthe partial impairment of the indefinite-lived HEYDUDE trademark and HEYDUDE Brand reporting unit goodwill in the second quarter of 2025, that did not recur in the current year. Reduced costs for both fixed and variable marketing,marketing partiallyalso offset by impairment charges relatedcontributed to HEYDUDEthe leasehold improvement assets, as described above.decrease.

During the three months ended MarchJune 31,30, 2026, total net costs within ‘Enterprise corporate’ decreasedincreased $5.6$8.9 million, or 7.5%,11.1%, compared to the same period in 2025. This decrease was primarily due to increased compensation costs and other corporate costs. These increases were partially offset by decreases resulting from our cost savings as a result of operational workforce reductions.initiatives.

As of MarchJune 31,30, 2026, we had 446484 company-operated retail locations for the Crocs Brand, inclusive of 201207 retail locations in North America and 245277 retail locations internationally. As of MarchJune 31,30, 2026, we had 75 company-operated retail locations for the HEYDUDE Brand. As of MarchJune 31,30, 2025, we had 393412 company-operated retail locations for the Crocs Brand, inclusive of 187191 retail locations in North America and 206221 retail locations internationally. As of MarchJune 31,30, 2025, we had 5463 company-operated retail locations for the HEYDUDE Brand.

Our liquidity position as of MarchJune 31,30, 2026, was:

As of MarchJune 31,30, 2026, we had $130.9$170.3 million in cash and cash equivalents and up to $849.9$880.4 million of available borrowings, including $840.4$865.4 million of remaining borrowing availability under the Revolving Facility (as defined below) and $9.4$15.0 million of remaining borrowing availability under the Citibank Facility (as defined below). As of MarchJune 31,30, 2026, the Term Loan B Facility (as defined below) was fully drawn and there was no available borrowing capacity. We believe that cash flows from operations, our cash and cash equivalents on hand, and available borrowings under our Revolving Facility will be sufficient to meet our ongoing liquidity needs and capital expenditure requirements for at least the next twelve months. On July 27, 2026, the Board approved a $1.5 billion increase to our share repurchase authorization, after which approximately $2.0 billion remained available for future common stock repurchases.

All of the cash held outside of the U.S. could be repatriated to the U.S. as of MarchJune 31,30, 2026, without incurring additional U.S. federal income taxes. In some countries, repatriation of certain foreign balances is restricted by local laws. These limitations may affect our ability to fully utilize our cash resources for needs in the U.S. or other countries and could adversely affect our liquidity. As of MarchJune 31,30, 2026, we held $113.4$151.8 million of our total $130.9$170.3 million in cash and cash equivalents in international locations. This cash is primarily used for the ongoing operations of the business in the locations in which the cash is held. Of the $113.4$151.8 million, an insignificant amount is currently restricted by local laws or otherwise.

The Credit Agreement requires us to maintain a minimum interest coverage ratio of 3.00 to 1.00, and a maximum leverage ratio of 3.25 to 1.00 (subject to adjustment in certain circumstances). The Credit Agreement permits, among other things, (i) stock repurchases subject to certain restrictions, including after giving effect to such stock repurchases, the maximum leverage ratio does not exceed certain levels; and (ii) certain acquisitions so long as there is borrowing availability under the Credit Agreement of at least $40.0 million. As of MarchJune 31,30, 2026, we were in compliance with all financial covenants under the Credit Agreement.

As of MarchJune 31,30, 2026, the total commitments available from the lenders under the Revolving Facility were $1.0 billion. At MarchJune 31,30, 2026, we had $159.0$134.0 million in outstanding borrowings and $0.6 million in outstanding letters of credit under the Revolving Facility, which reduces amounts available for borrowing under the Revolving Facility. As of MarchJune 31,30, 2026, and December 31, 2025, we had $840.4$865.4 million and $937.4 million, respectively, of available borrowing capacity under the Revolving Facility, which matures in November 2027.

As of MarchJune 31,30, 2026, the Term Loan B Facility was fully drawn with no remaining borrowing capacity, and we had $500.0 million in outstanding principal on the Term Loan B Facility.

The Term Loan B Credit Agreement also contains customary affirmative and negative covenants, incurrence financial covenants, representations and warranties, events of default and other provisions. As of MarchJune 31,30, 2026, we were in compliance with all financial covenants under the Term Loan B Credit Agreement.

During the threesix months ended MarchJune 31,30, 2026, we had one revolving credit facility in Asia with Citibank (China) Company Limited, Shanghai Branch (the “Citibank Facility”), which, as amended, provides up to an equivalent of $15.0 million.

As of MarchJune 31,30, 2026, we had borrowings outstanding of $5.6 million on the Citibank Facility, which were repaid in April 2026. As ofand December 31, 2025, we had no borrowings outstanding on the Citibank Facility.

The Indentures contain covenants that, among other things, limit the ability of the Company and its restricted subsidiaries to incur additional debt or issue certain preferred stock; pay dividends or repurchase or redeem capital stock or make other restricted payments; declare or pay dividends or other payments; incur liens; enter into certain types of transactions with the Company’s affiliates; and consolidate or merge with or into other companies. As of MarchJune 31,30, 2026, we were in compliance with all financial covenants under the Notes.

Operating Activities. Cash usedprovided inby operating activities consists of net income adjusted for non-cash items and changes in working capital. Cash usedprovided inby operating activities increased $13.7$52.2 million for the threesix months ended MarchJune 31,30, 2026, compared to the threesix months ended MarchJune 31,30, 2025, driven by lowernet increases in cash related to changes in operating assets and liabilities of $112.4 million, primarily due to the change in inventories, accrued expenses, and other liabilities, and income taxes, partially offset by a decrease in net income, adjusted for non-cash items, of $19.6$60.2 million, partially offset by increases in operating assets and liabilities of $5.9 million, primarily due to the change in prepaid expenses, accounts receivable, and accounts payable, accrued expenses, and other liabilities.million.

Investing Activities. There was a $2.6$6.8 million increase in cash used in investing activities for the threesix months ended MarchJune 31,30, 2026, compared to the threesix months ended MarchJune 31,30, 2025. This was2025, due to an increase in purchases of property, equipment, and software.

Financing Activities. Cash providedused byin financing activities increased by $34.3$14.2 million infor the threesix months ended MarchJune 31,30, 2026, compared to the threesix months ended MarchJune 31,30, 2025. The increase in cash providedused byin financing activities was primarily due to aan decreaseincrease of $60.9$62.0 million in repurchases of common stock. There were other increases in cash provided of $0.9 million. The overall increase in cash provided by financing activities was partially offset by a decreasenet increase in proceeds from borrowings of $16.5$47.0 million and another increasedecreases in repaymentscash used of $11.0$0.8 million.

We had no material off-balance sheet arrangements as of MarchJune 31,30, 2026, other than certain purchase commitments, which are described in Note 1213 — Commitments and Contingencies in the accompanying notes to the condensed consolidated financial statements included in Part I - Item 1. Financial Statements of this Quarterly Report on Form 10-Q.

We evaluate the carrying value of our indefinite-lived intangible assets and goodwill at least annually or when an interim triggering event has occurred indicating potential impairment. During the threesix months ended MarchJune 31,30, 2026, there were no triggering events for the HEYDUDE Brand indefinite-lived intangible assets (which consists solely of the HEYDUDE trademark) (the “trademark”) and the HEYDUDE Brand reporting unit (the “reporting unit”) goodwill. Certain factors, such as failure to achieve forecasted revenue growth rates, EBITDA, or increases in the discount rates, have the potential to create variances in the estimated fair values of our goodwill and indefinite-lived intangible assets that could result in impairment charges in future periods For a complete discussion of our critical accounting policies and estimates, please refer to our Annual Report on Form 10-K for the year ended December 31, 2025, and Note 1 — Basis of Presentation and Summary of Significant Accounting Policies in the accompanying notes to the condensed consolidated financial statements included in Part I - Item 1. Financial Statements of this Quarterly Report on Form 10-Q. There have been no other significant changes in our critical accounting policies or their application since December 31, 2025.periods.