American footwear brand Crocs is experiencing a major downturn, with shares plunging by nearly 30% after revealing concerns about declining sales as US consumers tighten their spending. The company anticipates a 10% drop in revenue for the upcoming three months compared to last year, attributing this shift to shoppers becoming more selective when it comes to discretionary purchases. CEO Andrew Rees highlighted that fewer customers are visiting stores, marking a worrying trend.
In addition to economic challenges, Crocs faces financial stress due to tariffs linked to US trade policies, with estimates indicating a $40 million loss for the remainder of 2025. Despite slight revenue growth in the second quarter, the outlook remains grim as Rees acknowledged that many consumers appear "super cautious" about spending. The brand's share price has hit a three-year low, driven further by a reluctance to offer discounts on their footwear.
As major sporting events like the football World Cup and the 2028 Los Angeles Olympics approach, Rees noted a trend of consumers shifting preferences back to athletic products, which could impact Crocs' positioning in the market. The footwear company also owns HEYDUDE, a casual footwear brand acquired for $2.5 billion in 2021, adding complexity to their financial situation.
