Crocs had it’s worst year ever. Hey Dude has been a horrific investment. But the core biz still has potential

+ My New Credit Card Stack

I haven't gone through my credit card stack in a while, which I recently completely overhauled.

All of my personal credit cards are either Amazon or Robinhood Gold.

Amazon is the largest Merchant I spend money with every month. The 5% adds up quickly, which translates to a free/heavily discounted statement every 4-5 mos.

Robinhood Gold is an interesting one. I get 3% universally if I redeem the value by investing in Robinhood (where I have some investments). 

What I do: redeem the points every month and DCA it into VOO (S&P 500) index inside an IRA. So instead of taking a balance off my credit every month I’m force investing it at an annual avg return of 8%/yr.

I'm essentially getting free money that I'm investing at market rates, and then it is going to be tax-free when I take it out, so it's all free money.

Note: As always, none of what follows is legal, tax, investing, financial, or any other sort of advice. And I was never here 😉.

Crocs (the ugliest shoe that’s every nurse and kid’s favorite) posted its worst financial year in its history, because they wrote off the Hey Dude investment.

The core biz is facing headwinds as Clogs (core product your imagining) experienced slower sales. But that hides the real opportunity.

FY2025 Financial Statements (YoY Comparison)

 Link to Crocs' FY2025 earnings

*FY2025 OPEX includes a $737M non-cash HeyDude trademark + goodwill impairment.

These dynamics are plaguing all footwear. But Crocs is facing the same headwinds while dealing with the Hey Dude acquisition which has been a complete disappointment. They’re stuck dumping dead inventory which is an anchor around their necks.

Jibbitz (Pins to customize your Crocs) drives this brand. Customers love to add unique pins to their Crocs to customize them. It is the core reason people buy these products.

Founded:

Aha Moment:

Growth:

Model:

Where We Are Now:

Here are the 3 ways we're turning Crocs into a $12B juggernaut.

Crocs sales are slowing in NA (Biggest market) with more discounting to combat general US consumer headwinds. 

They aren’t unique here. Deckers, Nike, Adidas, and New Balance all increased discount levels to move product.

It’s time for Crocs to have its Product 2 evolution and step into the significantly bigger market they already operate in. 

Sandals accounted for 13% of product mix in FY2025 and came in near $450M in sales. Instead of forcing the issue and torching the brand (& margins) this is the perfect time to make Sandals a core part of the biz.

How Apple makes more from iPhones vs. Computers or how Yeti sells more Drinkware than Coolers.

Jibbitz already works with Sandals. This most comes from a focus on a hero product. Run the same Crocs playbook that has worked so well in Clogs. It’s time to focus marketing resources more on sandals more aggressively.

Growing sandals from 13% -> 17% = ~$132m+ in incremental Rev. At a 3x EV/Revenue multiple, that adds ~$396M EV to the market cap. Almost half of the Hey Dude write off.

Takeaway:  When the market tells you to shift. Don’t pivot. Shift.

Crocs owns Footwear on US TTS.

Their model is perfect to dominate if they invest in the platform full time. Then take it on the road.

Croctober’s 744-hour continuous livestream that pulled 11M+ views and $1.5M in live sales. 

Let’s take that success and turn it into permanent content-studio infrastructure. Master the livestream constant content to get customers to buy. Build our own QVC. 

Then take the playbook to Douyin (China - Crocs fastest growing market), then Myntra live/Instagram (India - the next fastest growing market).

If you haven’t read our previous Crocs newsletters they are one of the most advanced Consumer operations in the world. (Stanley CEO who blew them up with the colored bottles was ex-Crocs exec).

They already have the collab partnership model in all countries ( Hello Kitty, Disney, Yang Mi, Bai Lu, Pratibha Ranta, TREASURE), the social selling platform becomes the venue to push as much content + product as they can.

Start with core Clogs. Then move to Sandals. And if by some miracle they can turn around Hey Dude they will double in size.

Takeaway: The next $500M comes from owning the feed. Not a new product.

Crocs are legends of viral stunt collabs. From the Balenciaga Crocs (w/ a heel) to Bad Bunny’s glow in the dark clogs. Crocs team knows how to drive insane earned media through product collabs.

The next one we’ll launch is a limited edition Crocs for Dogs. Think of the snow booties dogs need to wear in the winter, but their small Crocs.

The amount of media attention this would attract alone would be worth it, but they could run it as a test to see if there’s real demand for a new product expansion.

If they sell out really well and there’s serious demand Crocs has just expanded into a completely new market through their core customer.

Now when the family goes to buy Crocs for the parents and kids they can pick them up for their pets as well.

They can find fun pet brands to partner with to create Jibbitz + give customers the ability to create custom Jibbitz of their dogs. It’ll be a self feeding system of further personalization driving more core product purchases.

Takeaway:  Test the extension for the cost of a press cycle, not the cost of a balance sheet.

The early success they have with TTS shops is their Red Bull moment. 

Where they get better at advertising then selling shoes, the same way Red Bull makes more money every year on Advertising for other brands than they do selling energy drinks.

Crocs is a legendary consumer biz. Originally there was some incredible product innovation to create the original product.

But let’s be honest. They are really masters of advertising and branding. Jibbitz was a brilliant more to personalize (and cover) what was widely considered an “ugly shoe”. 

They are masters of consumer marketing and strategy. 

Footwear is a great biz, and they make good money in it. But there are significantly larger TAMs and opportunities in the consumer market they could better monetize by helping someone else.