Crocs shares plunge nearly 30% on tariffs and the decline of the “ugly shoe” trend

VHO - The American shoe company faces tightening consumer spending, trade instability and signs of a once-hot trend's decline.

Crocs sandals. Photo: Getty Images

Crocs shares fell sharply by 29.2% in trading on August 7 (US time), after the company warned that current quarter revenue could fall by 9-11%.

The drop disappointed analysts who had expected a modest gain and marked the biggest one-day drop since 2011, pushing the company's valuation to its lowest in nearly three years.

Crocs said it is under dual pressure from the Trump administration's new tariffs and changing consumer trends.

Crocs CEO Andrew Rees said the company is seeing “a lot of evidence” that North American consumers, especially the “considered” group, are becoming extremely cautious: “They’re not shopping, they’re not even going into stores. Traffic is down significantly.”

He described the business environment in the second half of the year as “worrying,” with orders from retail partners falling and consumer confidence weakening. Inflation, high interest rates, a cooling labor market and uncertainties surrounding trade and tariff policies have caused Americans to limit spending.

The company is also facing a hit from fashion trends. Once considered a symbol of "ugly" and comfort, Crocs have had a strong resurgence during the Covid-19 pandemic and even appeared on the red carpet of the 2021 Oscars.

But now, tastes are shifting. “Consumers are returning to sneakers , especially as events like the 2026 FIFA World Cup and the 2028 Los Angeles Olympics approach,” Mr Rees said.

Chief Financial Officer Susan Healy estimates the new tariffs could cost Crocs $40 million in the second half of 2025 and as much as $90 million annually without adjusting its supply chain. The HEYDUDE brand, which Crocs acquired in 2021, is being hit harder because of its import structure.

In response, Crocs said it is closely monitoring costs, reducing inventory and has suspended promotions since May to protect profits.

The company's second-quarter results showed a clear deterioration: Crocs posted a pretax loss of $448.6 million, a reversal from a profit of $296.4 million a year earlier, though revenue still rose slightly, 3.4%, to $1.1 billion.

Source: https://baovanhoa.vn/kinh-te/co-phieu-crocs-lao-doc-gan-30-vi-thue-quan-va-xu-huong-giay-xau-thoai-trao-159724.html