According to the lawsuit, Crocs misled investors by concealing the fact that the strong revenue growth exhibited by HEYDUDE following its acquisition in February 2022 was largely driven by a conscious decision on the part of Crocs management to aggressively stock its third-party wholesaler pipeline with HEYDUDE products, regardless of the level of retail demand being experienced by those wholesalers.

Moreover, after the Company’s retail partners began to destock this excess inventory, Crocs further misled investors by concealing that waning product demand for HEYDUDE shoes would further impact the Company’s financial results.

Investors learned the truth about HEYDUDE’s prospects through a series of partial disclosures, and then finally, on October 29, 2024, in reporting its financial results for the third quarter of 2024, Crocs disclosed that HEYDUDE revenues fell below the Company’s expectations and that “it will take longer than we had initially planned for the business to turn the corner.” Significantly, Crocs’ CEO attributed HEYDUDE’s struggles to “excess inventories in the market,” admitting that “in retrospect, we absolutely shipped too much product[].” The CEO further acknowledged that a lack of product demand exacerbated the issue.

On this news, the price of Crocs shares declined by $26.47 per share, or 19%, from a close of $138.05 per share on October 28, 2024 to a close of $111.58 per share on October 29, 2024.

Investors who purchased or acquired Crocs securities between November 3, 2022 through October 28, 2024, may no later than March 24, 2025, seek to be appointed as a lead plaintiff representative of the class.