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Shares for Crocs Inc. took a hit on Wall Street on Tuesday, dropping nearly 19 percent in mid-day trading, following the continued sales decline at the company’s Hey Dude brand.

According to the Broomfield, Colo.-based footwear brand, consolidated revenues in the third quarter of fiscal 2024 were $1,062 million, an increase of 1.6 percent over the same time last year. That’s better-than-expected from the company’s expectations laid out last quarter which projected revenues to be between down 1.5 percent and up 0.5 percent compared to the prior year.

Net income in the quarter was $199.8 million, up from $177.0 million the prior year period, and diluted earnings per share were $3.36, a 17.1 percent increase from $2.87 last year.

By business segment, the company reported that direct-to-consumer revenues grew 4.4 percent in Q3, while wholesale revenues contracted 1.4 percent.

Crocs brand revenues once again drove the strong results, with sales up 7.4 percent to $858 million in the third quarter. These results reflected a 7.7 percent increase in direct-to-consumer to $463 million and a 7.1 increase in wholesale to $396 million in the period.

Revenues for the Hey Dude brand in Q3 decreased 17.4 percent to $204 million, which reflected a 9.3 percent decline to $91 million in DTC and a 22.9 percent drop to $113 million in wholesale.

On the company’s earnings call on Tuesday, Crocs Inc. chief executive officer Andrew Rees told analysts that while the company is encouraged by early positive indicators on Hey Dude’s turnaround, recent performance and the current operating environment are signaling it could take longer than the company initially planned for the business to turn the corner.

“We continue to have confidence about the long-term potential of the brand, and the green shoots we are seeing give us positive reinforcement around our opportunity,” Rees said. “I’m incredibly proud of the team and the urgency of which they’ve executed against our sharpened strategy.”

The CEO noted that since September 2023, the company “made a pivot” to prioritize Hey Dude’s brand health, clean up channel inventory, while rightsizing its account base and began building a fleet of premium outlet stores to showcase the best expression of the brand.

“Since then, we’ve elevated ASPs (average selling price), shuttered more than 50 percent of our accounts, improved inventory turns to 4-times a year and opened 29 premium outlet stores,” Rees said. “In addition, we invested in talent across the brand, while accelerating our market investment as we work towards driving higher rents and relevance to generate brand heat. We strongly believe this is the right decision to build a solid foundation for profitable growth at Hey Dude.”