Crocs (CROX) forecast a 9% to 11% decline in third quarter revenue on Thursday, as tariffs and a softer consumer spending environment weigh on the business.
The stock lost a quarter of its value, falling 25% to $79 per share in early trading after reporting second quarter results.
“We expect the Crocs brand to be down mid-single digits, led by declines in North America, offset in part by growth in international,” Crocs CFO Susan Healy said in the company’s earnings call. “This includes our expectation that the second half wholesale environment will be challenging for both brands based on the visibility we have in our current order books.”
On the cost side, Crocs expects incremental tariffs to create a $40 million headwind in the second half of the year for a total impact of $90 million for the year. The shoe company imports most of its products from China, Vietnam, Indonesia, India, and Cambodia, which face tariffs in a range of 10% to 20%.
The company sees a 170-basis-point impact on adjusted operating margins in the third quarter, largely from tariffs.
Revenue for the June quarter slightly beat estimates at $1.41 billion. Adjusted diluted earnings per share of $4.23 also beat expectations of $4.02 per share.
