Crocs's shares plunge 30% as cautious shoppers skip footwear stores
What's the story
Shares of Crocs, a popular US footwear brand, have tumbled nearly 30%. The decline comes after the company warned of a drop in sales due to changing consumer behavior. Specifically, some shoppers are reportedly avoiding Crocs stores altogether. Andrew Rees, CEO of Crocs, said, "We see the US consumer behaving cautiously around discretionary spending."
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Worst single-day decline in nearly 15 years
The warning from Crocs has sent its share price plummeting to a three-year low. The company has also witnessed its worst single-day decline in nearly 15 years. Rees further added that there is "ample evidence" of some customers being "super cautious" with their spending habits.
Future outlook
Company predicts 'concerning' 2nd half of the year
Crocs has predicted a "concerning" second half of the year, citing high living costs and potential effects from US President Donald Trump's trade policies. The company's CFO, Susan Healy, said Crocs would take a $40 million hit for the rest of 2025 due to tariffs. Rees said they could mitigate tariff impacts through cost savings in their supply chain.
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Crocs to continue reducing discounts
Amid the sales concerns, Crocs has decided to continue reducing discounts on its products. Rees cautioned that this could further affect sales in the short term. He said, "They're not purchasing, they're not even going to the stores, and we see traffic down."
Financial performance
Slight increase in 2nd-quarter revenue
Despite the challenges, Crocs reported a 3% increase in its second-quarter revenue to $1.1 billion compared to last year. The company also owns casual footwear brand HEYDUDE, which it acquired for $2.5 billion in late 2021. Looking ahead at next year's football World Cup and the 2028 Los Angeles Olympics, Rees said consumers are "migrating back toward athletic" products.