Inside a New Securities Fraud Class Action Suit Against Crocs Allegedly Involving ‘Misleading’ Hey Dude Data

The Kessler Topaz Meltzer & Check, LLP law firm is wrapping up the preliminary stages of its class action case against Crocs Inc. In the lawsuit, the firm is alleging that Crocs misled investors following its 2022 acquisition of Hey Dude by concealing information that negatively impacted the company’s financial results, allegedly leading to an inflated price. “[Crocs] misled investors by concealing the fact that the strong revenue growth exhibited by the company’s Hey Dude brand following its acquisition in Feb. 2022, was largely driven by a conscious decision on the part of Crocs management to aggressively stock its third-party wholesaler pipeline with Hey Dude products, regardless of the level of retail demand being experienced by those wholesalers,” the complaint stated. “[Crocs] pursued this overstocking strategy despite assurances to investors by Andrew 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, the complaint alleges that the company reported Hey Dude revenue numbers in 2022 that were not indicative of actual retail demand for Hey Dude shoes and, over the longer term, were entirely unsustainable. “After the company’s retail partners began to destock this excess inventory, defendants further misled

Follow Footwear News on Twitter or become a fan on Facebook.

from Footwear NewsRecent Stories https://ift.tt/OLJnaCV