Crocs are cool again. But the footwear company’s comeback story is more than just a fashion statement.
The iconic clog was a staple of early 2000s fashion. However, the brand’s profitability eroded in the years following the Great Recession as it struggled to expand internationally. From 2008 to 2016, there were four years where the company’s operating margin was negative, according to data from FactSet.
Crocs CEO Andrew Rees took the helm of Crocs in 2017 and spearheaded its turnaround strategy.
“When I joined the company, we refreshed the management team, we refreshed the strategy, and that was really all about getting to profitability. But also putting the right level of marketing and product innovation into the product so that we could create incremental demand,” said Rees.
Crocs partnered with brands ranging from Balenciaga to Pixar, and celebrities like Justin Bieber and Post Malone, to create limited edition releases. The pandemic also created demand for comfortable footwear among consumers who were stuck at home along with frontline medical professionals.
From 2020 to 2021, the brand grew its revenue from around $1.4 billion to about $2.3 billion. Profitability soared too, as Crocs’ operating margin jumped from 17.2% to 29.8% during the same time period, according to data from FactSet.
Regarding its branding, Crocs shifted its messaging and began embracing the criticism surrounding its colorful and unique appearance.
“They went back to their original clog and basically used it as a canvas for self-expression,” said Annie Wilson, a senior lecturer of marketing at The Wharton School. “The biggest thing I saw from a messaging perspective was their shift from trying to convince consumers that it was about comfort and function, to basically saying, ‘Yeah, we know we’re ugly, but that’s why you should love us, because that’s what makes us one of a kind and unique.'”
Crocs leaned heavily into personalization through its decorative charms known as Jibbitz. The company told CNBC that Jibbitz revenue was $271 million in 2024, which accounts for just over 8% of the brand’s revenue.
“They are very profitable, but the most important part is not just the direct profit contribution, but just engaging with that consumer to really bring them back to the brand again and again,” said Crocs Brand President Anne Mehlman.
Crocs said that about 75% of its consumers buy Jibbitz to accessorize their clogs, according to its proprietary surveys.
While Crocs revenue has been rising over the past five years, it is now trying to grow another casual footwear brand in its portfolio called HeyDude, which it acquired in 2022 for $2.5 billion in cash-and-stock deal.
The brand has seen sales decline since its acquisition by Crocs, and was forced to pay nearly $1.9 million to customers in 2024 after facing FTC allegations that it suppressed negative reviews of its product online and improperly refunded customers.
In 2024, HeyDude revenue fell 13.2% compared to 2023, while Crocs climbed 8.8%.
“You are actually making investments and you’re actually taking the hard earned money from the Crocs brand, and then you’re infusing it and investing it into HeyDude,” said Barclays senior retail analyst Adrienne Yih. “They think that that is a good growth prospect. Right now, the jury’s out on that.”
The Crocs brand is also facing new headwinds from the 46% tariff President Donald Trump imposed on Vietnam this week. The company reported that just over half of its production has taken place in Vietnam since 2021.