Crocs, the widely popular footwear brand known for their comfortable, distinctive clogs, has croaked worries for the back half of the year. Consequently, its stock tanked by almost 30%. This dramatic fall is now the worst single-day drop for the company in almost 15 years. It raises new alarm bells about consumer spending in the U.S. Today, Crocs’ stock price has dropped to its most precarious level in almost three years, sounding the alarm with worried investors.
The company is preparing for a “very difficult six to nine months” moving forward. They are projecting revenue for the three months ending in August to be about 10% lower than during the same period last year. Chief Executive Andrew Rees noted that a number of US consumers are continuing to be defensive with their discretionary spend. This population shift, forced by the current price of inflation, has led to less traffic in Crocs brick and mortar locations.
“They’re not purchasing, they’re not even going to the stores, and we see traffic down,” – Andrew Rees
Crocs is still reeling from sales plummeting. On that, the company has to absorb a $40 million charge over the balance of 2025 because of tariffs, increasing its already substantial financial distress. Rees sounded hopeful about addressing some of these impacts by realizing savings from a more efficient supply chain.
“I think we can over the medium-term mitigate the impact of tariffs. That will come from cost savings in our supply chain,” – Andrew Rees
Curiously enough, Crocs owns the fast-growing casual footwear brand HEYDUDE, which it purchased in a $2.5 billion takeover in late 2021. Crocs’ HEYDUDE performance recently became very important to Crocs as it continues to chart a course through these choppy waters. Trends in consumer behavior would suggest that shoppers are becoming less and less able to spend money on just-for-fun purchases.
Rees highlighted these shifts in consumer behavior, stating, “We see the US consumer behaving cautiously around discretionary spending.” This trend was most probably the reason why Crocs decided to stop frequent discounting on its products. Unfortunately, this strategy would not only exacerbate their own sales loss.
The crisis at Crocs comes against the backdrop of an American consumer increasingly pinching their pennies. The influence of previous trade policies under former President Donald Trump continues to loom over companies like Crocs that import goods and materials.
