Shares of Crocs, the American footwear company known for its colorful rubber clogs, have witnessed a staggering decline of nearly 30% following a warning about falling sales due to cautious consumer spending in the US. According to CEO Andrew Rees, revenue for the three months ending in August is projected to decrease by around 10% compared to last year, reflecting a trend where fewer shoppers are visiting Crocs stores. This downturn has caused the company's stock price to hit its lowest point in almost three years, marking the steepest single-day drop in nearly 15 years.
Crocs Faces Major Share Decline Amidst Consumer Spending Caution
Crocs Faces Major Share Decline Amidst Consumer Spending Caution
Famed footwear brand Crocs experiences a sharp drop in shares as American consumers tighten their wallets.
Rees pointed to a "concerning" outlook for the second half of the year, attributing the decline to the increasing cost of living and the potential implications of US President Donald Trump's trade tariffs. Chief Financial Officer Susan Healy indicated that the company would take a substantial $40 million hit in future earnings due to these tariffs. However, Rees expressed some optimism, stating that efficiencies in the supply chain could help mitigate this financial blow.
The firm has observed clear signs that a segment of its customer base is becoming extremely cautious with spending, significantly reducing store visits and purchases. In light of this situation, Crocs has indicated it will limit discounting, which could further impact sales figures. With significant sporting events such as the upcoming football World Cup in the US, Mexico, and Canada, and the 2028 Los Angeles Olympics on the horizon, Rees noted a shift in consumer preferences toward more athletic footwear options.
Despite this challenging situation, Crocs reported a second-quarter revenue rise of 3%, amounting to $1.1 billion compared to the same period the previous year. The brand also owns HEYDUDE, a casual footwear label acquired for $2.5 billion in late 2021.
The firm has observed clear signs that a segment of its customer base is becoming extremely cautious with spending, significantly reducing store visits and purchases. In light of this situation, Crocs has indicated it will limit discounting, which could further impact sales figures. With significant sporting events such as the upcoming football World Cup in the US, Mexico, and Canada, and the 2028 Los Angeles Olympics on the horizon, Rees noted a shift in consumer preferences toward more athletic footwear options.
Despite this challenging situation, Crocs reported a second-quarter revenue rise of 3%, amounting to $1.1 billion compared to the same period the previous year. The brand also owns HEYDUDE, a casual footwear label acquired for $2.5 billion in late 2021.
