Crocs Inc.'s share price has plummeted nearly 30 percent.
In a surprising turn of events, the rubber shoe manufacturer Crocs reported a significant loss of $492 million in the previous quarter, despite a 3.4% increase in revenues to around $1.15 billion. This loss is a stark contrast to the nearly $229 million profit the company made in the same quarter last year [1][2].
The decline in North American revenues, which fell by about 6.5% in the second quarter of 2025, is contributing to the company's forecasted third-quarter revenue drop of 9% to 11% [1][2]. The waning US consumer demand is a primary concern, with Crocs' CEO Andrew Rees attributing it to US President Donald Trump's import tariffs [1].
The import tariffs have not only impacted the company's revenues but also increased its costs. In response, Crocs is focusing on managing expenses through cost savings, reducing inventory, and pulling back on promotions. However, these cost-cutting measures are expected to negatively affect short-term revenue while positioning the company for longer-term recovery [1].
The company expects a $40 million burden in the second half of the year due to Trump's import tariffs [2]. Concerns about potential price increases could further dampen consumer demand, according to Rees [2].
In a silver lining, international revenues are growing, contrasting with the domestic challenges the company faces [2]. Rees predicts an increase in popularity of classic sports shoes in the US due to the FIFA World Cup 2026 and the Olympic Games 2028 in Los Angeles [2].
In the after-hours trading, Croc's stock rose by about 3% after ending the trading day with a loss of 29.24% [2]. The negative revenue forecast is causing investors to sell the stock, leading to a nearly 30% loss of the company's value in a single day [2].
Crocs has not announced any plans to mitigate the impact of the import tariffs or address the decline in US consumer demand [1]. The impairments on the brand value of the Heydude brand contributed significantly to the loss in the previous quarter [1].
[1] Source: Crocs Q2 2025 Earnings Release [2] Source: Crocs Q2 2025 Earnings Call Transcript
In the wake of the company's financial struggles, Crocs is contemplating adjusting its investment strategies to cope with increasing costs due to import tariffs and manage expenses through cost savings, reducing inventory, and scaling back on promotions. The stock market has responded negatively to these financial woes, as evidenced by a 29.24% loss in trading and a subsequent 3% rise in after-hours trading.
