Shares in US footwear company Crocs tumbled by almost 30% on Thursday after the firm warned of falling sales, citing the impact of tariffs, “super cautious” American consumers and signs that the “ugly shoe” trend may be losing steam.
The Colorado-based maker of foam clogs and sandals saw its share price fall 29.2%, following a forecast that revenues could decline between 9% and 11% in the current quarter. Analysts had expected a slight increase. The plunge wiped the company’s valuation to its lowest level in almost three years.
Chief executive Andrew Rees said there was “ample evidence” that many North American consumers were avoiding purchases altogether. “They’re not purchasing, they’re not even going to the stores, and we see traffic down,” he said, noting that already selective shoppers were increasingly wary of current and future price rises.
The firm also flagged a hit to profitability from the latest wave of tariffs imposed by Donald Trump, which took effect earlier in the day. Rees described the outlook for the second half of the year as “concerning”, with weaker orders from retail partners reflecting broader economic pressures.
A cooling labour market, coupled with higher interest rates, inflation and uncertainty over US trade policy and tax measures, has dampened spending. Crocs’ finance chief, Susan Healy, estimated tariffs would cost the company $40m (£29.8m) in the second half of 2025 and $90m annually based on current sourcing patterns, with its casual footwear label HEYDUDE hit hardest.
Once mocked as a fashion faux pas, Crocs enjoyed a resurgence during the pandemic as consumers embraced comfort, even making appearances on the Oscars red carpet. However, Rees acknowledged a shift in tastes towards athletic footwear, bolstered by anticipation of the men’s football World Cup next year and the Los Angeles Olympics in 2028.
In the second quarter, the company swung to a pre-tax loss of $448.6m, compared with a $296.4m profit a year earlier, despite revenues rising 3.4% to $1.1bn. Crocs has responded by cutting back on promotions since May, reducing inventory and keeping a close watch on expenses in an effort to “protect brand health and profitability”.
The warning comes amid a wider pullback in consumer spending. McDonald’s said earlier this week that lower-income US customers were buying less fast food, while fashion brand Ralph Lauren, despite raising its full-year revenue outlook, expressed “continued caution” ahead of an “uncertain, potentially inflationary” holiday season.
