Shares in US footwear company Crocs plunged by almost 30% on Thursday after it warned of falling sales due to tariffs, cautious US consumers, and signs that the 'ugly shoe' trend may be fading. The foam clog and sandal maker's shares fell 29.2%, its biggest one-day drop since 2011, taking its valuation to its lowest level in nearly three years.
Crocs predicted revenues could drop by between 9% and 11% in the current quarter, disappointing analysts who had expected slight growth. The company also warned of a hit to profitability from Donald Trump's tariffs, citing 'continued uncertainty from evolving global trade policy and related pressures around the consumer'.
Chief executive Andrew Rees said there was 'ample evidence' that some North American consumers were 'super cautious; they're not purchasing, they're not even going to the stores, and we see traffic down'. He described the second-half environment as 'concerning', reflected in orders from retail partners. A cooling labour market, higher interest rates, rising inflation and uncertainty over trade policies have led Americans to rein in spending.
Once a fashion faux pas, Crocs soared in popularity during the pandemic as people sought comfortable footwear, even appearing on the Oscars red carpet in 2021. However, Rees acknowledged changing tastes, with a trend 'back towards athletic' footwear ahead of the men's football World Cup and the 2028 Los Angeles Olympics.
Chief financial officer Susan Healy said tariffs would result in a $40m hit in the second half of 2025 and $90m annually based on current sourcing. The company fell into the red in the second quarter with a pre-tax loss of $448.6m, compared with a profit of $296.4m a year earlier, though revenues rose 3.4% to $1.1bn.
