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Heydude wants to sell more in North America, but is unlikely to open new stores

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Heydude wants to sell more in North America, but is unlikely to open new stores

The brand returned to growth in Q3 compared to its weak results last year, thanks largely to wholesale revenue from retail partners.

Namesake Crocs is by far the bigger brand in this portfolio, but signs of life at struggling Heydude were capturing much of the attention Thursday.

“The Heydude brand achieved its long-awaited return to growth in Q3,” Nikic said in a research note.

On a call with analysts, Crocs CEO Andrew Rees said the “quarter marks an important inflection for the Heydude brand” and serves as an endorsement of the company’s three-pillar strategy. He acknowledged that the topline boost is in comparison to weak results a year ago.

The pillars of Heydude’s turnaround include being “laser focused on our core consumer,” thoughtfully diversifying the assortment and pushing more deeply into North America, Rees said. The brand has added sandals, for example, which are outperforming expectations.

The effort to expand in North America won’t likely include opening many more stores, though, as wholesale is a “more cost-effective way to reach our intended consumer,” Rees said. In fact, the brand’s return to growth in North America was driven by wholesale, which was up 14%.

As of the end of March, the company runs 75 Heydude stores, up from 54 a year prior, according to Crocs’ annual report.

“We like the portfolio that we have,” Rees said.



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