Shares of American footwear company Crocs have dropped nearly 30% after a disheartening sales forecast linked to changing consumer behaviors in the United States. The rubber clog maker anticipates a revenue decline of approximately 10% for the three-month period leading up to the end of August compared to the previous year. CEO Andrew Rees remarked on the increasingly cautious spending habits among US consumers, stating that many are no longer making trips to Crocs stores.
The drastic fall leaves Crocs' share prices at a near three-year low, experiencing their steepest decline in a single day in almost 15 years. Concerns about the second half of the fiscal year reflect the ongoing high cost of living and detrimental effects of US trade policies under President Trump, with CFO Susan Healy issuing a warning for a subsequent $40 million hit due to tariffs.
Mr. Rees is hopeful on mitigating the tariff impacts through supply chain savings, but highlighted a shift in customer engagement, noting that many consumers are becoming "super cautious" with expenditures. Store traffic has declined significantly, affecting purchases, as Crocs chooses to limit product discounting which may further suppress sales.
As anticipation builds for next year’s World Cup in North America and the upcoming Los Angeles Olympics in 2028, Rees acknowledged a trend towards athletic footwear, shifting the spotlight away from their traditional offerings. For reference, Crocs reported a modest second-quarter revenue of $1.1 billion, reflecting a 3% increase year-over-year, despite these concerning trends. The company also owns the casual footwear brand HEYDUDE, acquired in a substantial $2.5 billion deal in late 2021.
