Judgment: HOLD Solid brand/margin fundamentals are offset by near‑term execution and macro headwinds. Crocs’ structural strengths—TTM gross margin ~59.1%, resilient Crocs brand DTC/international mix (digital 37% of 2024 revenue), healthy FCF and ongoing buybacks/deleveraging (Net Debt/EBITDA 1.4x)—are clear. However, management guides Q4 2025 revenue down ~8% y/y with adjusted operating margin ~15.5% (vs. 24.9% in 2024), HEYDUDE is down mid‑20% with $737m of YTD impairments, U.S. wholesale remains cautious, and tariffs weigh on mix. At ~23x P/E, the risk-reward looks balanced until HEYDUDE stabilizes and margins re‑expand. WATCH ITEMS: • HEYDUDE turnaround: sequential sell-through, inventory turns, and revenue inflecting from “mid‑20% down” to flat/growth with margin stabilization would support upgrading to BUY; continued double‑digit declines or further impairments would push toward SELL. • Margin and mix quality: TTM gross margin holding ≥59% and a credible path for adjusted operating margin back toward 20%+ (driven by DTC/international growth) would justify a more constructive stance; sustained ~15% margin or negative DTC comps would bias to SELL/HOLD. • U.S. wholesale and tariffs: evidence of wholesale order/bookings normalization and/or tariff relief would improve visibility and could move us to BUY; renewed wholesale contraction or higher duty/tariff drag would warrant a downgrade.