Crocs Sued by Investor After Overstocking Acquired Shoe Brand

Crocs Inc. overstocked shoes from a newly-acquired footwear brand, artificially inflating share prices until disclosures about saturated inventory and sluggish demand prompted a series of stock drops in 2023 and 2024, a proposed class action says.

Crocs and executives misrepresented that HEYDUDE’s 2022 revenue was really driven by consciously stuffing third-party wholesalers, misleading investors about the growth’s sustainability, said shareholder Michael Anthony Carretta’s complaint filed in the US District Court for the District of Delaware on Wednesday. And after retailers started de-stocking excess product, executives allegedly hid that slowing HEYDUDE demand would further weigh down company financials, he said.

That ...