UBS Evidence Lab inside: 2Q26 Preview: We See a Balanced Upside/Downside Skew

研报英文原文证据摘录

UBS Evidence Lab inside: 2Q26 Preview: We See a Balanced Upside/Downside Skew

Crocs Inc UBS Research

UBS Research THESIS MAP Thesisa guideMapto our thinking and what´s where in this report

Pivotal Questions Q: How much can the global footwear industry grow?

We expect it to rise at a +MSD% CAGR, highly skewed to sports footwear. Athleisure should

continue growing at a faster rate than the industry average, underpinned by leading industry players

driving innovation and consumer trends toward casualization and healthy lifestyles. We think these

trends benefit CROX.

Q: Will CROX sales growth continue despite tariffs and signs of a maturing business?

Doubtful. We forecast flat revenues over the next 5 years, modestly below a 0.5% annual growth

rate in the 5 years leading to the pandemic. We anticipate the Crocs brand's North America revenue

growth rate continues to steadily moderate. Revenues should benefit from: (1) investments in brand

awareness, new categories for the Crocs brand, and the HEYDUDE brand; (2) Crocs' own

eCommerce business gaining traction with consumers; and (3) increased wholesale channel

distribution via e-tailers.

Q: Can CROX maintain near-peak operating margins despite tariffs?

Unlikely. FY21 operating margins reached ~30%, well above 18.9% in FY20 and single-digits in the

years prior to the pandemic. We forecast CROX margins falling to ~16.5% by FY30E. We believe

CROX's EBIT margins will continue to normalize over the next several years because of tariffs and

slowing top-line growth, particularly in North America. Plus, we anticipate the HEYDUDE business

will be dilutive to the company's EBIT margin.

UBS VIEW We rate CROX Neutral. We forecast a -1% 5-year EPS CAGR. Yet, the stock's current P/E likely prices

in a similar outlook, in our view.