INVESTOR ALERT: KESSLER TOPAZ MELTZER & CHECK, LLP FILES A SECURITIES FRAUD CLASS ACTION LAWSUIT AGAINST CROCS, INC. AND ENCOURAGES INVESTORS WITH LOSSES TO CONTACT THE FIRM
INVESTOR ALERT: KESSLER TOPAZ MELTZER & CHECK, LLP FILES A SECURITIES FRAUD CLASS ACTION LAWSUIT AGAINST CROCS, INC. AND ENCOURAGES INVESTORS WITH LOSSES TO CONTACT THE FIRM |
| [22-January-2025] |
RADNOR, Pa., Jan. 22, 2025 /PRNewswire/ -- The law firm of Kessler Topaz Meltzer & Check, LLP informs investors that the firm has filed a securities fraud class action lawsuit against Crocs, Inc. (NASDAQ: CROX) ("Crocs" or the "Company") on behalf of investors who purchased or otherwise acquired Crocs common stock between November 3, 2022, and October, 28 2024, inclusive (the "Class Period"). This action, captioned Carretta v. Crocs, Inc., et al., Case No. 1:25-cv-00096, was filed in the United States District Court for the District of Delaware.
Important Deadline Reminder: Investors who purchased or otherwise acquired Crocs common stock during the Class Period may, no later than March 24, 2025,move the Court to serve as lead plaintiff for the class. If you suffered Crocs losses, you may CLICK HERE or copy and paste the following link in your browser: https://www.ktmc.com/new-cases/crocs-inc?utm_source=PR&utm_medium=link&utm_campaign=crx&mktm=r You can also contact attorney Jonathan Naji, Esq. of Kessler Topaz by calling (484) 270-1453 or by email at info@ktmc.com. DEFENDANTS' MISCONDUCT During the Class Period, Defendants 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. Defendants pursued this overstocking strategy despite assurances to investors by Defendant Andrew Rees ("Rees"), the Company's Chief Executive Officer, that Crocs would not "play the game of forcing inventory into [wholesalers] and getting them overstocked." As a result, unbeknownst to investors, the Company reported HEYDUDE revenue numbers in 2022 that were not indicative of actual retail demand for HEYDUDE shoes and, over the longer term, were entirely unsustainable. Moreover, after the Company's retail partners began to destock this excess inventory, Defendants further misled investors by concealing that waning product demand for HEYDUDE shoes would further impact the Company's financial results. Investors began to learn the truth about the nature and unsustainability of HEYDUDE's revenue growth on April 27, 2023, when Defendant Rees revealed during the Company's first quarter 2023 earnings call that much of HEYDUDE's revenue growth in 2022 was attributable to efforts to stock the Company's wholesale partners with HEYDUDE products and was not necessarily indicative of actual downstream retail sales. On this news, the price of Crocs common stock declined $23.46 per share, or nearly 16%, from a close of $147.78 per share on April 26, 2023, to close at $124.32 per share on April 27, 2023. Thereafter, on June 7, 2023, and July 27, 2023, Defendants made additional disclosures which revealed that Crocs had intentionally made significant sales to the Company's major retail and wholesale partners, rather than gradually increasing third-party HEYDUDE inventory over several years to reflect actual retail demand for the product. These disclosures caused the price of Crocs common stock to decline. In addition, on August 16, 2023, the price of Crocs common stock declined nearly 4% when Williams Trading LLC significantly decreased its price target on Crocs from $145 per share, to $113 per share, due to information its primary Crocs analyst had uncovered as a result of his discussions with several HEYDUDE wholesale accounts regarding wholesaler inventory levels and the pricing for HEYDUDE products. Among other things, Williams Trading LLC highlighted elevated HEYDUDE inventory levels at approved retailers and the "overabundance" of HEYDUDE products on Amazon.com at below suggested retail price. Then, on November 2, 2023, Crocs announced its financial results for the third quarter of 2023, and revealed that HEYDUDE's "[w]holesale revenues declined 19.4% to $146.5 million following prior year pipeline fill and as our wholesale partners were more cautious on at-once orders." As a result of the prior overstocking of HEYDUDE's products, Crocs further slashed its 2023 HEYDUDE revenue growth guidance from between 14% and 18%, to between only 4% and 6% (even though HEYDUDE DTC sales continued to grow 14.6% during the quarter). In connection with this announcement, Defendant Rees admitted that HEYDUDE "inventory was too high" and that the Company "is proactively lowering in-channel inventories" and "working with our strategic accounts to clean up that inventory and putting them in a strong sell-through and a more profitable position." On this news, the price of Crocs common stock declined $4.62 per share, or more than 5%, from a close of $87.41 per share on November 1, 2023, to close at $82.79 per share on November 2, 2023. Throughout the remainder of the Class Period, Defendants continued to downplay the impact of the Company's overstocking of third-party wholesalers and retailers following the February 2022 acquisition of HEYDUDE. After the Company's retail partners began to destock this excess inventory, Defendants further misled investors by concealing that waning product demand would significantly exacerbate the negative impact on the Company's financial results. Finally, on 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 held that same day, 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." 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. On this news, the price of Crocs common stock declined $26.47 per share, or approximately 19.2%, from a close of $138.05 per share on October 28, 2024, to close at $111.58 per share on October 29, 2024. WHAT CAN I DO? CLICK HERE to sign up for the case or GO TO: https://www.ktmc.com/new-cases/crocs-inc?utm_source=PR&utm_medium=link&utm_campaign=crx&mktm=r WHO CAN BE A LEAD PLAINTIFF? ABOUT KESSLER TOPAZ MELTZER & CHECK, LLP For more information about Kessler Topaz Meltzer & Check, LLP please visit www.ktmc.com. CONTACT: May be considered attorney advertising in certain jurisdictions. Past results do not guarantee future outcomes.
SOURCE Kessler Topaz Meltzer & Check, LLP | ||
Company Codes: NASDAQ-NMS:CROX |
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