Williams Trading downgraded Crocs to Sell from Hold, citing continued erosion in U.S. demand for both the core Crocs brand and HEYDUDE. The brokerage raised its price target to $84 from $75 but warned that financial adjustments don't reflect improved fundamentals.

U.S. wholesale partners plan to reduce Crocs business by high single digits to the mid-teens in 2026, with HEYDUDE expected to decline by the mid-teens. Williams Trading's checks found no signs of improvement in the second half of the year, despite management's expectations of a marketplace cleanup driving growth.

While international sales remain stronger than North America and direct-to-consumer performance outpaces wholesale, Williams Trading sees risks of softening demand abroad. The firm expressed concern over expanding company-owned stores, noting that past rapid growth periods initially supported revenue but later coincided with slowing sales and margin pressure. Direct-to-consumer revenue growth has been modest despite store expansion, with total EBIT margin declining from 27.7% in 2023 to 22.3% in 2025.