Crocs, Inc.

Previous wording

•We continue to operate in an environment where consumers are feeling the effects of elevated interest rates, inflation, and future expected price increases, among other things, and as a result, there is more pressure on discretionary spending. Given this, our wholesale partners are also acting cautiously. In addition, geopolitical tensions have increased across the globe. In 2025, the United States (“U.S.”) has imposed tariffs on foreign imports from multiple countries, including, most relevant to us, a total tariff of 20%, 30%, 19%, 50%, and 19% on all imports from Vietnam, China, Indonesia, India, and Cambodia, respectively. We are continuing to monitor developments with respect to these policy changes and proposals. We have begun to mitigate the potential impacts of tariffs and the resulting effect on the consumer, including diversifying our sourcing mix, refining our cost structure, and implementing select price increases. See the risk factor under “Government actions and regulations, such as export restrictions, tariffs, and other trade protection measures could adversely affect our business” in the section entitled “Risk Factors” under Item 1A in this report for additional information. For the Crocs Brand, we began reducing promotional activity during the three months ended June 30, 2025, which will protect brand health and profitability.

Current wording

•We continue to operate in an environment where consumers are feeling the effects of elevated interest rates, inflation, and future expected price increases, among other things, and as a result, there is more pressure on discretionary spending. Given this, our wholesale partners are also acting cautiously. In addition, geopolitical tensions have increased across the globe. In 2025, the United States (“U.S.”) has imposed tariffs on foreign imports from multiple countries, including, most relevant to us, a total tariff of 20%, 30%, 19%, 50%, and 19% on all imports from Vietnam, China, Indonesia, India, and Cambodia, respectively. We are continuing to monitor developments with respect to these policy changes and proposals. We have begun to mitigate the potential impacts of tariffs and the resulting effect on the consumer, including diversifying our sourcing mix, refining our cost structure, and implementing select price increases. See the risk factor under “Government actions and regulations, such as export restrictions, tariffs, and other trade protection measures could adversely affect our business” in the section entitled “Risk Factors” under Item 1A in this report for additional information. For the Crocs Brand, we continued reducing promotional activity in North America, primarily in our digital DTC channel, during the three months ended September 30, 2025, in an effort to protect brand health and profitability. For the HEYDUDE Brand, we continued right-sizing the inventory in our wholesale channel, including accelerating returns, in an effort to elevate our brand presentation in the channel and establishing a foundation for future growth.

Previous wording

•Our liquidity position remains strong with $200.6 million in cash and cash equivalents and $799.4 million in available borrowing capacity as of June 30, 2025. Our total borrowings were $1.4 billion as of June 30, 2025. We repurchased $133.2 million of our common stock during the quarter.

Current wording

•Our liquidity position remains strong with $154.0 million in cash and cash equivalents and $862.4 million in available borrowing capacity as of September 30, 2025. Our total borrowings were $1.3 billion as of September 30, 2025. We repurchased $202.9 million of our common stock during the quarter.

Previous wording

Second Quarter 2025 Financial and Operational Highlights

Current wording

Third Quarter 2025 Financial and Operational Highlights

Previous wording

Revenues were $1,149.4 million for the second quarter of 2025, a 3.4% increase compared to the second quarter of 2024. The increase was due to the net effects of: (i) higher unit sales volume in the Crocs Brand, partially offset by lower unit sales volume in the HEYDUDE Brand, which resulted in a net increase in revenues of $36.6 million, or 3.3%; (ii) net favorable changes in exchange rates, which increased revenues by $7.4 million, or 0.7%; and (iii) lower average selling price on a constant currency basis (“ASP”) driven by the Crocs Brand, partially offset by higher ASP in the HEYDUDE Brand, which decreased revenues by $6.2 million, or 0.6%.

Current wording

Revenues were $996.3 million for the third quarter of 2025, a 6.2% decrease compared to the third quarter of 2024. The decrease was due to the net effects of: (i) lower unit sales volume in both brands, which resulted in a decrease in revenues of $116.6 million, or 11.0%; (ii) higher average selling price on a constant currency basis (“ASP”) driven by both brands, which increased revenues by $44.8 million, or 4.2%; and (iii) net favorable changes in exchange rates, which increased revenues by $5.9 million, or 0.6%.

Previous wording

•We grew revenues in the Crocs Brand by 5.0%, or 4.2% on a constant currency basis, compared to the same period in 2024. HEYDUDE Brand revenues decreased 3.9%, or 4.2% on a constant currency basis.

Current wording

•Crocs Brand revenues decreased by 2.5%, or 3.2% on a constant currency basis, compared to the same period in 2024. HEYDUDE Brand revenues decreased 21.6%, or 21.7% on a constant currency basis.

Previous wording

•Selling, general and administrative expenses (“SG&A”) were $398.2 million compared to $356.2 million in the second quarter of 2024, primarily as a result of increased investment in marketing and higher costs in the DTC channel. As a percent of revenues, SG&A increased to 34.6% of revenues compared to 32.0% of revenues in the second quarter of 2024.

Current wording

•Selling, general and administrative expenses (“SG&A”) were $375.3 million compared to $363.5 million in the third quarter of 2024, primarily as a result of increased investment in talent and higher costs in the DTC channel. As a percent of revenues, SG&A increased to 37.7% of revenues compared to 34.2% of revenues in the third quarter of 2024.

Previous wording

During the six months ended June 30, 2025, revenues decreased compared to the same period in 2024, primarily due to lower volume. The overall decrease in HEYDUDE Brand revenues was partially offset by higher ASPs, driven by favorable channel mix, offset in part by unfavorable product mix and unfavorable customer mix.

Current wording

Revenues. In the three months ended September 30, 2025, revenues decreased compared to the same period in 2024, primarily due to lower volume of $116.6 million, or 11.0%, driven by both brands. The overall decrease in revenues was partially offset by higher ASP of $44.8 million, or 4.2%, driven by favorable channel mix in both brands and reduced discounting for the

Previous wording

Revenues. In the three months ended June 30, 2025, revenues increased compared to the same period in 2024, primarily due to higher volume of $36.6 million, or 3.3%, driven by the Crocs Brand, partially offset by lower volume in the HEYDUDE Brand. Net favorable foreign currency fluctuations of $7.4 million, or 0.7%, primarily in the Euro, also increased revenues. The overall increase in revenues was offset in part by lower ASP of $6.2 million, or 0.6%, driven by unfavorable product mix in both brands, partially offset by favorable channel mix in the HEYDUDE Brand and reduced discounting in the Crocs Brand.

Current wording

HEYDUDE Brand. Net favorable foreign currency fluctuations of $5.9 million, or 0.6%, primarily in the Euro, also increased revenues.

Previous wording

Revenues also increased in the six months ended June 30, 2025, primarily due to higher volume of $72.3 million, or 3.5%, driven by the Crocs Brand, partially offset by lower volume in the HEYDUDE Brand. Lower ASP of $28.8 million, or 1.4%, decreased the overall increase in revenues, mainly due to increased discounting in the Crocs Brand. This was offset in part by favorable product mix in the Crocs Brand and favorable channel mix in the HEYDUDE Brand. Net unfavorable foreign currency fluctuations of $6.9 million, or 0.3%, primarily in the South Korean Won and Brazilian Real, also decreased revenues.

Current wording

Revenues also decreased in the nine months ended September 30, 2025, primarily due to lower volume of $36.6 million, or 1.2%, driven by the HEYDUDE Brand, partially offset by higher volume in the Crocs Brand. The overall decrease in revenues was partially offset by higher ASP of $8.2 million, or 0.3%, mainly due to favorable channel mix in both brands and reduced discounting in the HEYDUDE Brand. This was offset in part by unfavorable product mix in both brands and increased discounting in the Crocs Brand.

Previous wording

Gross margin in the six months ended June 30, 2025, was 59.9% compared to 58.7% in 2024. This was primarily driven by favorable customer mix of 40 basis points and favorable product mix of 20 basis points, both in the Crocs Brand. Favorable brand mix of 20 basis points also increased gross margin.

Current wording

Gross margin in the nine months ended September 30, 2025, was 59.5% compared to 59.0% in 2024. This was primarily driven by lower product costs of 50 basis points, favorable brand mix of 30 basis points, and favorable customer mix of 30 basis points in the Crocs Brand, partially offset by unfavorable duties of 70 basis points.

Previous wording

Selling, general and administrative expenses. SG&A increased $42.1 million, or 11.8%, in the three months ended June 30, 2025, compared to the same period in 2024, driven by increased investment in talent of $17.5 million, higher DTC costs, including investments and variable costs, of $14.2 million, increased investment in marketing of $10.2 million, and net increases in other costs of $0.2 million.

Current wording

Selling, general and administrative expenses. SG&A increased $11.8 million, or 3.3%, in the three months ended September 30, 2025, compared to the same period in 2024, driven by increased investment in talent of $17.6 million, higher DTC costs, driven by investment in the channel, of $9.4 million, reduced marketing costs, primarily in variable marketing, of $6.2 million, lower professional services fees, including consulting, of $5.0 million, and net decreases in other costs of $4.0 million.

Previous wording

SG&A expenses increased $89.1 million, or 14.2%, during the six months ended June 30, 2025, compared to the same period in 2024, primarily driven by increased investment in talent and marketing of $34.8 million and $24.2 million, respectively, higher DTC costs, including investments and variable costs, of $23.6 million, and net increases in other costs of $6.5 million.

Current wording

SG&A expenses increased $100.9 million, or 10.2%, during the nine months ended September 30, 2025, compared to the same period in 2024, primarily driven by increased investment in talent and marketing of $52.4 million and $18.0 million, respectively, higher DTC costs, including investment in the channel and variable costs, of $33.0 million, and net decreases in other costs of $2.5 million.

Previous wording

Asset impairments increased $714.0 million during the six months ended June 30, 2025, compared to the same period in 2024, primarily due to non-cash impairment charges in the current year of $430.0 million related to the indefinite-lived HEYDUDE trademark and $307.0 million for HEYDUDE Brand reporting unit goodwill, as described above. The increase in asset impairments was partially offset by prior year non-cash impairment charges of $18.2 million for information technology systems related to the HEYDUDE integration, $5.5 million for our former HEYDUDE Brand warehouses in Las Vegas, Nevada, and $0.4 million for our former Crocs Brand warehouse in Oudenbosch, the Netherlands, none of which recurred in the current year.

Current wording

Goodwill and Asset impairments. In the three months ended September 30, 2025 and 2024, there were no asset impairments. Asset impairments increased $714.0 million during the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to non-cash impairment charges in the current year of $430.0 million related to the indefinite-lived HEYDUDE trademark and $307.0 million for HEYDUDE Brand reporting unit goodwill. The increase in asset impairments was partially offset by prior year non-cash impairment charges of $18.2 million for information technology systems related to the HEYDUDE integration, $5.5 million for our former HEYDUDE Brand warehouses in Las Vegas, Nevada, and $0.4 million for our former Crocs Brand warehouse in Oudenbosch, the Netherlands, none of which recurred in the current year. For additional information, refer to Note 3 — Goodwill and Intangible Assets, Net in the accompanying notes to the condensed consolidated financial statements included in Part I - Item 1. Financial Statementsof this Quarterly Report on Form 10-Q.

Previous wording

Foreign currency gains (losses), net. Foreign currency gains (losses), net, consist of realized and unrealized foreign currency gains and losses from the remeasurement and settlement of monetary assets and liabilities denominated in non-functional currencies as well as realized and unrealized gains and losses on foreign currency derivative instruments. During the three months ended June 30, 2025, we recognized realized and unrealized net foreign currency gains of $0.4 million compared to losses of $1.3 million during the three months ended June 30, 2024.

Current wording

Foreign currency gains (losses), net. Foreign currency gains (losses), net, consist of realized and unrealized foreign currency gains and losses from the remeasurement and settlement of monetary assets and liabilities denominated in non-functional currencies as well as realized and unrealized gains and losses on foreign currency derivative instruments. During the three months ended September 30, 2025, we recognized realized and unrealized net foreign currency gains of $3.0 million compared to losses of $0.3 million during the three months ended September 30, 2024.

Previous wording

During the six months ended June 30, 2025, we recognized realized and unrealized net foreign currency gains of $5.3 million compared to losses of $3.6 million during the six months ended June 30, 2024.

Current wording

During the nine months ended September 30, 2025, we recognized realized and unrealized net foreign currency gains of $8.3 million compared to losses of $3.9 million during the nine months ended September 30, 2024.

Previous wording

Interest expense. Interest expense during the three months ended June 30, 2025, decreased $6.6 million, or 22.8%, compared to the three months ended June 30, 2024. Interest expense during the six months ended June 30, 2025, decreased $14.4 million, or 24.2%, compared to the six months ended June 30, 2024. The decrease in interest expense for the three and six months ended June 30, 2025, was due to lower outstanding borrowings and lower weighted average interest rates on the Term Loan B Facility (as defined herein) and the Revolving Facility (as defined herein) in the current year.

Current wording

Interest expense. Interest expense during the three months ended September 30, 2025, decreased $4.5 million, or 17.1%, compared to the three months ended September 30, 2024. Interest expense during the nine months ended September 30, 2025, decreased $18.9 million, or 22.0%, compared to the nine months ended September 30, 2024. The decrease in interest expense for the three and nine months ended September 30, 2025, was due to lower outstanding borrowings and lower weighted average interest rates on the Term Loan B Facility (as defined herein) and the Revolving Facility (as defined herein) in the current year.

Previous wording

Income tax expense. During the three months ended June 30, 2025, income tax expense decreased $23.8 million compared to the same period in 2024. The effective tax rate for the three months ended June 30, 2025, was (9.7)% compared to an effective tax rate of 22.8% for the same period in 2024, a 32.5% decrease. The effective tax rate was impacted by the HEYDUDE impairments in 2025, as described above, which are not deductible for tax purposes. Our effective income tax rate, for each period presented, also differs from the federal U.S. statutory rate due to differences in income tax rates between U.S. and foreign jurisdictions.

Current wording

Income tax expense. During the three months ended September 30, 2025, income tax expense decreased $1.5 million compared to the same period in 2024. The effective tax rate for the three months ended September 30, 2025, was 23.0% compared to an effective tax rate of 18.4% for the same period in 2024, a 4.6% increase. This increase in the effective tax rate was primarily driven by a shift in the mix of our domestic and foreign earnings. Our effective income tax rate, for each period presented, also differs from the federal U.S. statutory rate due to differences in income tax rates between U.S. and foreign jurisdictions.

Previous wording

During the six months ended June 30, 2025, income tax expense decreased $20.6 million compared to the same period in 2024. The effective tax rate for the six months ended June 30, 2025 was (36.3)% compared to an effective tax rate of 22.2% for the same period in 2024, a 58.5% decrease. The effective tax rate was impacted by the HEYDUDE impairments in 2025, as described above, which are not deductible for tax purposes. As a result of a prior year intra-entity transaction, the value of the intellectual property for tax purposes is subject to revaluation and therefore there are not similar impacts for tax as a result of the intellectual property impairment. Our effective income tax rate, for each period presented, also differs from the federal U.S. statutory rate primarily due to differences in income tax rates between U.S. and foreign jurisdictions.

Current wording

During the nine months ended September 30, 2025, income tax expense decreased $22.1 million compared to the same period in 2024. The effective tax rate for the nine months ended September 30, 2025, was (243.6)% compared to an effective tax rate of 21.0% for the same period in 2024, a 264.6% decrease. The effective tax rate was impacted by the HEYDUDE impairments in 2025, as described above, which are not deductible for tax purposes. As a result of a prior year intra-entity transaction, the value of the intellectual property for tax purposes is subject to revaluation and therefore there are not similar impacts for tax as a result of the intellectual property impairment. Our effective income tax rate, for each period presented, also differs from the federal U.S. statutory rate due to differences in income tax rates between U.S. and foreign jurisdictions.

Previous wording

Revenues. Crocs Brand revenues increased in the three months ended June 30, 2025, compared to the same period in 2024, primarily due to higher volume. Net favorable foreign currency fluctuations, primarily in the Euro, also increased revenues. The overall increase was partially offset by lower ASP, driven by unfavorable product mix, offset in part by reduced discounting.

Current wording

Revenues. Crocs Brand revenues decreased in the three months ended September 30, 2025, compared to the same period in 2024, primarily due to lower volume. The overall decrease was partially offset by higher ASP, driven by favorable channel mix. Net favorable foreign currency fluctuations, primarily in the Euro, also increased revenues.

Previous wording

The increase in Crocs Brand revenues in the six months ended June 30, 2025, compared to the same period in 2024 was due to higher volume. The overall increase in Crocs Brand revenues was offset in part by lower ASP, mainly due to increased discounting, partially offset by favorable product mix, and net unfavorable foreign currency fluctuations, primarily in the South Korean Won and Brazil Real.

Current wording

The increase in Crocs Brand revenues in the nine months ended September 30, 2025, compared to the same period in 2024 was due to higher volume. The overall increase in Crocs Brand revenues was offset in part by lower ASP, mainly due to unfavorable product mix and increased discounting, partially offset by favorable channel mix.

Previous wording

Income from Operations. Income from operations for our Crocs Brand segment was $358.4 million for the three months ended June 30, 2025, an increase of $2.8 million, or 0.8%, compared to the same period in 2024. Gross margin was 64.1%, flat to prior year.

Current wording

Income from Operations. Income from operations for our Crocs Brand segment was $272.7 million for the three months ended September 30, 2025, a decrease of $40.5 million, or 12.9%, compared to the same period in 2024. Gross margin was 61.8%, a decrease of 70 basis points, primarily due to unfavorable duties, partially offset by lower product costs.

Previous wording

SG&A for our Crocs Brand segment increased $25.7 million, or 11.1%, during the three months ended June 30, 2025, compared to the same period in 2024. This increase was primarily due to higher costs in the DTC channel, including investments and variable costs, and increased investments in talent and marketing.

Current wording

SG&A for our Crocs Brand segment increased $21.1 million, or 9.5%, during the three months ended September 30, 2025, compared to the same period in 2024. This increase was primarily due to higher costs in the DTC channel, including investment in the channel and variable costs, and increased investments in talent and marketing.

Previous wording

During the six months ended June 30, 2025, income from operations for our Crocs Brand was $632.0 million, an increase of $12.3 million, or 2.0%, compared to the same period in 2024. Gross margin was 62.6%, an increase of 120 basis points, primarily due to favorable customer mix and favorable product mix.

Current wording

During the nine months ended September 30, 2025, income from operations for our Crocs Brand was $904.7 million, a decrease of $28.2 million, or 3.0%, compared to the same period in 2024. Gross margin was 62.3%, an increase of 50 basis points, primarily due to lower product costs and favorable customer mix, partially offset by unfavorable duties.

Previous wording

SG&A, including asset impairments, for our Crocs Brand increased $46.3 million, or 11.6%, during the six months ended June 30, 2025, compared to the same period in 2024, primarily due to higher costs in the DTC channel, including investments and variable costs, and increased investments in talent and marketing.

Current wording

SG&A, including asset impairments, for our Crocs Brand increased $67.4 million, or 10.8%, during the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to higher costs in the DTC channel, including investment in the channel and variable costs, and increased investments in talent and marketing.

Previous wording

Revenues. For the three months ended June 30, 2025, HEYDUDE Brand revenues decreased compared to the same period in 2024, primarily due to lower volume. Higher ASP, primarily due to favorable channel mix, partially offset by unfavorable product mix, slightly offset the overall decrease in revenues.

Current wording

During the nine months ended September 30, 2025, revenues decreased compared to the same period in 2024, primarily due to lower volume. The overall decrease in revenues was partially offset by higher ASP, primarily due to favorable channel mix and reduced discounting, slightly offset by unfavorable product mix.

Previous wording

Income (Loss) from Operations. Loss from operations for the HEYDUDE segment was $705.9 million for the three months ended June 30, 2025, a decrease of $748.3 million, or 1,766.3%, compared to income from operations in the same period in 2024. Gross margin was 50.2%, an increase of 110 basis points, primarily due to distribution and logistics efficiencies.

Current wording

Income (Loss) from Operations. Income from operations for the HEYDUDE segment was $6.8 million for the three months ended September 30, 2025, a decrease of $19.4 million, or 74.2%, compared to income from operations in the same period in 2024. Gross margin was 42.3%, a decrease of 560 basis points, primarily due to unfavorable duties and higher distribution and logistics costs, partially offset by higher ASP.

Previous wording

SG&A, including asset impairments, for the HEYDUDE Brand segment increased $755.5 million, or 723.7%, during the six months ended June 30, 2025, compared to the same period in 2024. This is primarily due to the partial impairment of the indefinite-lived HEYDUDE trademark and HEYDUDE Brand reporting unit goodwill, as discussed above, which was partially offset by prior year impairments costs of the right-of-use assets for our former HEYDUDE Brand warehouses in Las Vegas, Nevada that did not recur in the current year. SG&A also increased overall for the HEYDUDE Brand due to higher costs in the DTC channel, including investments and variable costs, and increased investments in marketing and talent.

Current wording

SG&A, including asset impairments, for the HEYDUDE Brand segment increased $744.9 million, or 423.4%, during the nine months ended September 30, 2025, compared to the same period in 2024. This is primarily due to the partial impairment of the indefinite-lived HEYDUDE trademark and HEYDUDE Brand reporting unit goodwill, as discussed above, which was partially offset by prior year impairments costs of the right-of-use assets for our former HEYDUDE Brand warehouses in Las Vegas, Nevada, that did not recur in the current year. SG&A also increased overall for the HEYDUDE Brand due to higher costs in the DTC channel, including investment in the channel and variable costs.

Previous wording

During the three months ended June 30, 2025, total net costs within ‘Enterprise corporate’ increased $7.8 million, or 10.8%, compared to the same period in 2024. This increase was primarily due to upfront costs incurred related to savings initiatives, including severance costs, and costs related to the discontinuation of an information technology project.

Current wording

During the three months ended September 30, 2025, total net costs within ‘Enterprise corporate’ increased $2.2 million, or 3.1%, compared to the same period in 2024. This increase was primarily due to an increased investment in talent and higher information technology costs, partially offset by lower professional services fees, including consulting.

Previous wording

During the six months ended June 30, 2025, total net costs within ‘Enterprise corporate’ increased $3.8 million, or 2.6%, compared to the same period in 2024. This was primarily due to an increased investment in talent and higher information technology costs, offset in part by a prior year non-cash impairment charge for information technology systems related to the HEYDUDE integration that did not recur in the current year.

Current wording

During the nine months ended September 30, 2025, total net costs within ‘Enterprise corporate’ increased $6.0 million, or 2.7%, compared to the same period in 2024. This was primarily due to an increased investment in talent and higher information technology costs, partially offset by a prior year non-cash impairment charge for information technology systems related to the HEYDUDE integration that did not recur in the current year.

Previous wording

As of June 30, 2025, we had 412 company-operated retail locations for the Crocs Brand, inclusive of 191 retail locations in North America and 221 retail locations internationally. As of June 30, 2025, we had 63 company-operated retail locations for the HEYDUDE Brand. As of June 30, 2024, we had 363 company-operated retail locations for the Crocs Brand, inclusive of 172 retail locations in North America and 191 retail locations internationally. As of June 30, 2024, we had 32 company-operated retail locations for the HEYDUDE Brand.

Current wording

As of September 30, 2025, we had 427 company-operated retail locations for the Crocs Brand, inclusive of 199 retail locations in North America and 228 retail locations internationally. As of September 30, 2025, we had 75 company-operated retail locations for the HEYDUDE Brand. As of September 30, 2024, we had 372 company-operated retail locations for the Crocs Brand, inclusive of 173 retail locations in North America and 199 retail locations internationally. As of September 30, 2024, we had 43 company-operated retail locations for the HEYDUDE Brand.

Previous wording

As of June 30, 2025, we had $200.6 million in cash and cash equivalents and up to $799.4 million of available borrowings, including $784.4 million of remaining borrowing availability under the Revolving Facility (as defined below) and $15.0 million of remaining borrowing availability under the Citibank Facility (as defined below). As of June 30, 2025, the Term Loan B Facility (as defined below) was fully drawn and there was no available borrowing capacity. We believe that cash flows from operations, our cash and cash equivalents on hand, and available borrowings under our Revolving Facility will be sufficient to meet our ongoing liquidity needs and capital expenditure requirements for at least the next twelve months.

Current wording

As of September 30, 2025, we had $154.0 million in cash and cash equivalents and up to $862.4 million of available borrowings, including $847.4 million of remaining borrowing availability under the Revolving Facility (as defined below) and $15.0 million of remaining borrowing availability under the Citibank Facility (as defined below). As of September 30, 2025, the Term Loan B Facility (as defined below) was fully drawn and there was no available borrowing capacity. We believe that cash flows from operations, our cash and cash equivalents on hand, and available borrowings under our Revolving Facility will be sufficient to meet our ongoing liquidity needs and capital expenditure requirements for at least the next twelve months.

Previous wording

Repatriation of Cash

Current wording

Repatriation of Cash and Cash Equivalents

Previous wording

All of the cash held outside of the U.S. could be repatriated to the U.S. as of June 30, 2025, without incurring additional U.S. federal income taxes. In some countries, repatriation of certain foreign balances is restricted by local laws. These limitations may affect our ability to fully utilize our cash resources for needs in the U.S. or other countries and could adversely affect our liquidity. As of June 30, 2025, we held $176.7 million of our total $200.6 million in cash in international locations. This cash is primarily used for the ongoing operations of the business in the locations in which the cash is held. Of the $176.7 million, an insignificant amount is currently restricted by local laws or otherwise.

Current wording

All of the cash held outside of the U.S. could be repatriated to the U.S. as of September 30, 2025, without incurring additional U.S. federal income taxes. In some countries, repatriation of certain foreign balances is restricted by local laws. These limitations may affect our ability to fully utilize our cash resources for needs in the U.S. or other countries and could adversely affect our liquidity. As of September 30, 2025, we held $152.2 million of our total $154.0 million in cash and cash equivalents in international locations. This cash is primarily used for the ongoing operations of the business in the locations in which the cash is held. Of the $152.2 million, an insignificant amount is currently restricted by local laws or otherwise.

Previous wording

As of June 30, 2025, the total commitments available from the lenders under the Revolving Facility were $1.0 billion. At June 30, 2025, we had $215.0 million in outstanding borrowings and $0.6 million in outstanding letters of credit under the Revolving Facility, which reduces amounts available for borrowing under the Revolving Facility. As of June 30, 2025, and December 31, 2024, we had $784.4 million and $809.4 million, respectively, of available borrowing capacity under the Revolving Facility, which matures in November 2027.

Current wording

As of September 30, 2025, the total commitments available from the lenders under the Revolving Facility were $1.0 billion. At September 30, 2025, we had $152.0 million in outstanding borrowings and $0.6 million in outstanding letters of credit under the Revolving Facility, which reduces amounts available for borrowing under the Revolving Facility. As of September 30, 2025, and December 31, 2024, we had $847.4 million and $809.4 million, respectively, of available borrowing capacity under the Revolving Facility, which matures in November 2027.

Previous wording

During the six months ended June 30, 2025, we had one revolving credit facility in Asia with Citibank (China) Company Limited, Shanghai Branch (the “Citibank Facility”), which, as amended, provides up to an equivalent of $15.0 million.

Current wording

During the nine months ended September 30, 2025, we had one revolving credit facility in Asia with Citibank (China) Company Limited, Shanghai Branch (the “Citibank Facility”), which, as amended, provides up to an equivalent of $15.0 million.

Previous wording

Operating Activities. Cash provided by operating activities consists of net income (loss) adjusted for non-cash items and changes in working capital. Cash provided by operating activities decreased $155.1 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, driven by decreases in operating assets and liabilities of $175.1 million, primarily due to the change in income taxes, and lower net income (loss), adjusted for non-cash items, of $20.0 million.

Current wording

Operating Activities. Cash provided by operating activities consists of net income (loss) adjusted for non-cash items and changes in working capital. Cash provided by operating activities decreased $212.6 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, driven by decreases in operating assets and liabilities of $181.1 million, primarily due to the change in income taxes and a larger increase in inventory units compared to the prior period, as well as higher unit cost as a result of incremental duties. Additionally, lower net income (loss), adjusted for non-cash items, of $31.5 million contributed to the decrease.

Previous wording

Investing Activities. There was a $0.9 million decrease in cash used in investing activities for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. This was due to a decrease in purchases of property, equipment, and software.

Current wording

Investing Activities. There was a $5.7 million decrease in cash used in investing activities for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. This was due to a decrease in purchases of property, equipment, and software.

Previous wording

Financing Activities. Cash used in financing activities decreased by $146.9 million in the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The decrease in cash used in financing activities was primarily due to an increase in proceeds from borrowings, net of repayments, of $163.2 million. There were other decreases in cash used of $2.8 million. The overall decrease in cash used in financing activities was partially offset by an increase of $19.1 million in repurchases of common stock, including excise tax.

Current wording

Financing Activities. Cash used in financing activities decreased by $139.3 million in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The decrease in cash used in financing activities was primarily due to a decrease in repayments, net of borrowings, of $210.2 million. There were other decreases in cash used of $5.1 million. The overall decrease in cash used in financing activities was partially offset by an increase of $76.0 million in repurchases of common stock, including excise tax.

Previous wording

There have been no significant changes to the contractual obligations reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, other than borrowings and repayments on the Term Loan B Facility and Revolving Facility.

Current wording

There have been no significant changes to the contractual obligations reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, other than borrowings and repayments on the Revolving Facility.

Previous wording

We evaluate the carrying value of our indefinite-lived intangible assets and goodwill at least annually or when an interim triggering event has occurred indicating potential impairment. During the three months ended June 30, 2025, there was a triggering event for the HEYDUDE Brand indefinite-lived intangible assets (which consists solely of the HEYDUDE trademark) (the “trademark”) and the HEYDUDE Brand reporting unit (the “reporting unit”) goodwill. The triggering event was due to downward revisions, during the three months ended June 30, 2025, to our internal HEYDUDE Brand forecast as a result of the extended time we believe it will now take us to stabilize the HEYDUDE Brand and return it to growth. This was partly due to the current and projected impact of a weak U.S. consumer and the disproportionate impact of tariffs on HEYDUDE Brand products, which became evident in the three months ended June 30, 2025. As a result, we completed quantitative assessments for the trademark and the reporting unit goodwill in the three months ended June 30, 2025 and recognized non-cash impairment charges of $430.0 million and $307.0 million, respectively. For more detailed information about our accounting conclusions and key assumptions used, refer to Note 3 — Goodwill and Intangible Assets, Net in the accompanying notes to the condensed consolidated financial statements included in Part I - Item 1. Financial Statementsof this Quarterly Report on Form 10-Q.

Current wording

We evaluate the carrying value of our indefinite-lived intangible assets and goodwill at least annually or when an interim triggering event has occurred indicating potential impairment. During the second quarter of the fiscal year ended 2025, there was a triggering event for the HEYDUDE Brand indefinite-lived intangible assets (which consists solely of the HEYDUDE trademark) (the “trademark”) and the HEYDUDE Brand reporting unit (the “reporting unit”) goodwill. The triggering event was due to downward revisions, during the second quarter of the fiscal year ended 2025, to our internal HEYDUDE Brand forecast as a result of the extended time we believed it would take us to stabilize the HEYDUDE Brand and return it to growth. This was partly due to the current and projected impact of a weak U.S. consumer and the disproportionate impact of tariffs on HEYDUDE Brand products, which became evident in the second quarter of the fiscal year ended 2025. As a result, we completed quantitative assessments for the trademark and the reporting unit goodwill in the second quarter of the fiscal year ended 2025, and recognized non-cash impairment charges of $430.0 million and $307.0 million, respectively. For more detailed information about our accounting conclusions and key assumptions used, refer to Note 3 — Goodwill and Intangible Assets, Net in the accompanying notes to the condensed consolidated financial statements included in Part I - Item 1. Financial Statementsof this Quarterly Report on Form 10-Q.