A securities class action has been filed in the USDC – DE. against Crocs, Inc. (CROX) (“Crocs” or the “Company”), on behalf of all persons and entities that purchased or otherwise acquired Crocs common stock between November 3, 2022, and October 28, 2024, both dates inclusive (the “Class Period”).
Crocs, a Delaware corporation with its principal executive offices in Broomfield, Colorado, is a casual lifestyle footwear brand. In February 2022, Crocs completed its acquisition of HEYDUDE, a footwear brand focusing on casual, comfortable, and lightweight footwear. As is relevant here, the Company reports HEYDUDE sales in two segments: direct-to-consumer (“DTC”) sales; and wholesale sales (which include sales to major retailers). Despite the fact that HEYDUDE was only acquired by Crocs in mid-February 2022, HEYDUDE accounted for approximately 25% of the Company’s total revenues in 2022.
The Complaint alleges that, throughout the Class Period, the Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts, about the Company’s business and operations. Specifically, Defendants misrepresented and/or failed to disclose:
(1) the nature and sustainability of HEYDUDE’s revenue growth by concealing that 2022 revenue growth was driven, in large part, by the Company’s efforts to stock third-party wholesalers and retailers following the February 2022 acquisition of HEYDUDE;
(2) that as the Company’s retail partners began to destock this excess inventory, waning product demand further negatively impacted the Company’s financial results; and
(3) that, as a result, Defendants’ representations about the Company’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis, thereby harming investors.
As a result, the price of Crocs common stock declined $26.47 per share, or approximately 19.2%, from a close of $138.05 per share on October 28, 2024, to close at $111.58 per share on October 29, 2024.
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