Kehoe Law Firm, P.C. is notifying investors that a federal securities class action complaint was filed against Crocs, Inc. (“Crocs” or the “Company”) (NASDAQ:CROX) on behalf of shareholders who purchased or otherwise acquired Crocs common stock between November 3, 2022 and October 28, 2024, inclusive (the “Class Period”).
Summary of Class Action Lawsuit Allegations Against Crocs
During the Class Period, the Crocs Defendants allegedly misled investors by concealing that HEYDUDE’s strong revenue growth after its February 2022 acquisition was primarily driven by Crocs management’s deliberate decision to aggressively stock third-party wholesalers, regardless of the level of actual retail demand.
This overstocking strategy allegedly continued despite assurances from the Company’s CEO that Crocs would not force excess inventory onto wholesalers. As a result, HEYDUDE’s reported 2022 revenue did not reflect true retail demand and was unsustainable over the long term.
Additionally, after the Company’s retail partners began destocking excess inventory, the Crocs Defendants allegedly misled investors by concealing that declining demand for HEYDUDE shoes would further impact the Company’s financial results.
Crocs Reports HEYDUDE’s Revenue Shortfall Due to Excess Market Inventory
According to the class action complaint, “[o]n October 29, 2024, investors learned more about HEYDUDE’s prospects when the Company reported its financial results for the third quarter of 2024. During the accompanying earnings call, Defendant Rees disclosed that HEYDUDE revenues fell below the Company’s expectations and revealed that ‘HEYDUDE’s recent performance and the current operating environment are signaling it will take longer than we had initially planned for the business to turn the corner.'”
Further, “Rees attributed HEYDUDE’s struggles to ‘excess inventories in the market’ and admitted that ‘we’ve made good progress, but frankly, not quite all the progress we want to make’ in resolving the inventory issue. Moreover, Rees admitted that ‘if you think about this sort of [20]22 into [20]23 timeframe, in retrospect, we absolutely shipped too much product[],’ calling that decision “wrong” and highlighting that a lack of product demand exacerbated the issue.”
The price of Crocs common stock dropped $26.47 per share, falling from a closing price of $138.05 on October 28, 2024 to $111.58 on October 29, 2024.
Crocs Investors May Have Legal Claims
Investors who acquired Crocs common stock during the Class Period may have legal claims. To learn more about the class action lawsuit or explore your legal options, please send us a message or contact Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], for a free, no-obligation legal evaluation.
About Kehoe Law Firm, P.C.
Kehoe Law Firm, P.C. is a nationally recognized, plaintiff-side class action firm dedicated to protecting investors and consumers from fraud and misconduct. Our attorneys have served as Lead or Co-Lead Counsel in major securities cases, recovering over $10 billion for institutional and individual investors.
Our firm litigates securities fraud, fiduciary breaches, unfair mergers and acquisitions, and antitrust violations, while also representing whistleblowers and advocating for victims of data breaches, consumer fraud, vehicle and product defects, employment law violations, retirement plan mismanagement, and other corporate and business misconduct. With a results-driven approach, we pursue justice and substantial recoveries for those we represent.
Kehoe Law Firm’s class action legal services are provided on a contingency-fee basis, meaning clients are not responsible for any fees or litigation expenses.
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