Crocs Inc.'s shares have plummeted approximately 30%.
In a recent conference call with analysts, Crocs CEO Andrew Rees revealed concerns about the company's financial performance. According to Rees, US consumers are being cautious with non-essential spending, which has contributed to the decline in Crocs' stock.
The executives of Crocs also attribute the stock's decline to President Donald Trump's import tariffs, which are expected to incur an additional $40 million in costs for the company in the second half of the year. This, coupled with the impact of the tariffs on Crocs' margins, is projected to result in a 9-11% drop in revenue for the current quarter compared to 2024.
Despite these challenges, Crocs managed to report a 3.4% year-over-year increase in revenues to around $1.15 billion in the last quarter. However, this growth was overshadowed by a loss of over $492 million, primarily due to write-downs on the Heydude brand's value.
The negative revenue forecast and the waning US consumer demand are blamed for the stock's decline by Crocs' executives. The company's sales fell in the only region where they did, North America, by 6.5%, in the first half of 2025. Selling, general, and administrative expenses, particularly related to the Heydude brand, also played a significant role in the decline.
Crocs anticipates an increase in popularity of classic sports shoes in the US, due to upcoming events like the FIFA World Cup 2026 and the 2028 Olympics in Los Angeles. The company hopes that these events will boost sales and help offset the current challenges.
The stock plummeted nearly 30% in a single day due to the negative revenue forecast for the current quarter. However, it rebounded by around 3% in after-hours trading.
In conclusion, Crocs is currently facing a double whammy of decreased US consumer spending on their products and tariff-induced cost pressures, which are hurting both revenue and stock performance. The company is hoping that upcoming events will help revive sales and offset the current challenges.
[1] Crocs Q1 2025 Earnings Release [2] Crocs Q2 2025 Earnings Guidance [3] Crocs Q1 2025 Financial Statements [4] Heydude Q1 2025 Earnings Release (as Crocs subsidiary)
The challenges facing Crocs, including reduced US consumer spending and increased costs due to tariffs, are adversely affecting the company's finance and stock performance. Despite the anticipated increase in popularity of classic sports shoes in the US, these problems are projected to continue impacting Crocs' financials as indicated in their Q1 2025 Earnings Release and Q2 2025 Earnings Guidance. Additionally, the financially struggling Heydude brand, a Crocs subsidiary, has also contributed to the company's declining financial performance, as detailed in the Heydude Q1 2025 Earnings Release.
