Crocs, the popular footwear maker, has experienced a substantial decline in shares following its warning of a decrease in revenue due to American shoppers curbing discretionary spending. With forecasts indicating a potential 10% drop in sales, the company grapples with economic pressures and changing consumer habits.
Crocs Faces Financial Struggles as US Consumers Scale Back Spending
Crocs Faces Financial Struggles as US Consumers Scale Back Spending
Footwear brand Crocs sees shares plunge nearly 30%, forecasting a significant drop in sales amid cautious consumer behavior and economic challenges.
Shares of the American shoe brand Crocs have plunged nearly 30% following concerns over a predicted drop in sales as US consumers tighten their wallets. The company, known for its iconic rubber clogs, anticipates a revenue decline of about 10% for the quarter ending in August compared to the previous year. "We see the US consumer behaving cautiously around discretionary spending," stated CEO Andrew Rees.
As a result, Crocs' stock price has reached its lowest point in nearly three years, suffering the most significant single-day decline in almost 15 years. The company is bracing for a challenging second half of 2025, attributing part of the downturn to high living costs and the potential repercussions of trade policies. CFO Susan Healy indicated that the company expects a $40 million hit to their finances from tariffs.
"While we can mitigate the impact of tariffs in the medium term through supply chain cost savings, our current sales reflect a concerning trend," said Rees. He noted that a significant segment of customers are behaving "super cautiously," resulting in decreased store traffic.
In response to changing consumer dynamics, Crocs has indicated a strategy to reduce product discounting, though this may further affect sales. With upcoming global sporting events such as the 2026 World Cup and the 2028 Los Angeles Olympics, Rees observed that customers are increasingly leaning towards athletic footwear instead.
Despite a reported revenue of $1.1 billion in the second quarter, representing a 3% increase from the previous year, the company’s outlook remains uncertain. Crocs, which also owns the casual footwear brand HEYDUDE after a $2.5 billion acquisition in late 2021, is now faced with the challenge of rejuvenating consumer interest while navigating economic headwinds.
