Crocs’ share price plunged after the rubber clog-maker revealed a fall in US sales as shoppers chose to spend on trainers ahead of the World Cup and the Olympics.
The footwear became a stay-at-home staple during the Covid pandemic and has remained relevant as celebrities embraced the “ugly” shoe aesthetic.
However, North American consumers are buying into a “clear athletic trend” ahead of next year’s football World Cup in the US, Mexico and Canada and the 2028 Los Angeles Olympics, said Crocs’ boss Andrew Rees.
He also warned that US customers were being “super cautious” due to the high cost of living and the potential impact of Trump tariffs.
“They’re not purchasing, they’re not even going to the stores, and we see traffic down,” Mr Rees said.
US sales fell by 6.5% between April and June. Crocs cautioned on a “concerning” second half of the year as it reported a pre-tax loss. Its share price plunged by 30% to a three-year low of $73.
‘Not leaving the house’
Mr Rees said Crocs appealed to a “particularly broad consumer base” and other brands were performing better “because they are focused exclusively on a high-end consumer”.
Crocs’ low-end consumer “is most sensitive to increases, is most nervous and in some cases, is not leaving the house,” he said.
He said these people were not buying new Crocs as they were worried how their personal finances would be hit by President Donald Trump’s sweeping tariffs across imports to the US.
Susan Healy, finance director at Crocs, said the company would take a $40m (£29.8m) hit for the remainder of 2025 due to tariffs.
Mr Rees said: “I think we can over the medium-term mitigate the impact of tariffs. That will come from cost savings in our supply chain.”
Crocs said it will continue to pull back on discounting its products, cautioning that this could have a further impact on sales.
Chinese influencers
In China, where consumer purchasing is “not strong”, according to Mr Rees, Crocs was “bucking that trend”.
“That brand heat has been driven by a set of social-first digital marketing tactics using key Chinese celebrities,” he said.
It is working with three of China’s biggest influencers Liu Yuxin, Tan Jianci and Bai Lu to push its rubber shoes.
It is also collaborating with designer Simone Rocha, whose sparkly take on the Croc were recently seen on the feet of actress Michelle Yeoh.
While sales rose in China and fell in the US, overall revenue grew by 3.4% to $1.1bn over the three months to 30 June.
However, it reported a $448.6m pre-tax loss for the period, compared to a $296m profit last year.
The company’s share price suffered the worst single-day drop in almost 15 years after the results emerged.
Crocs also owns casual footwear brand HEYDUDE, following a $2.5bn takeover in late 2021.
By BBC News
Email your news TIPS to Editor@Kahawatungu.com — this is our only official communication channel
