Crocs US sales tumble as shoppers choose trainers

Crocs, the well-known maker of rubber clogs, is facing a tough time in the United States as its sales have dropped. During the Covid pandemic, Crocs became a popular choice for people staying at home, and the brand even gained more attention when celebrities started wearing the so-called 'ugly' shoes. However, things have changed recently. According to Crocs' CEO Andrew Rees, American shoppers are now more interested in athletic shoes, especially with the upcoming World Cup and the Olympics. This shift in consumer preference has led to a 6. 5% decrease in Crocs sales in the US between April and June. Rees explained that there is a 'clear athletic trend' in North America, and people are being very cautious with their spending because of the high cost of living and the possibility of new tariffs introduced by former President Donald Trump. He said, 'They're not purchasing, they're not even going to the stores, and we see traffic down. ' This means fewer people are visiting stores to buy Crocs, and the company is worried about the rest of the year. Crocs reported a pre-tax loss and warned that the second half of the year could be 'concerning. ' As a result, the company's share price fell by 30% to $73, reaching its lowest point in three years.

Rees also mentioned that Crocs appeals to a wide range of customers, but other brands are doing better because they focus on high-end consumers. Crocs' lower-end customers are more sensitive to price increases and are more nervous about spending money, especially with the threat of tariffs. Some people are even choosing not to leave their homes, which affects sales. Susan Healy, Crocs' finance director, said the company expects to lose $40 million for the rest of 2025 because of tariffs. Rees believes that Crocs can reduce the impact of tariffs over time by saving money in their supply chain. The company also plans to cut back on discounts, but this could hurt sales even more.

While Crocs is struggling in the US, the situation in China is different. Rees said that consumer spending in China is generally weak, but Crocs is 'bucking that trend. ' The brand has become popular in China thanks to digital marketing and partnerships with key celebrities like Liu Yuxin, Tan Jianci, and Bai Lu. Crocs is also collaborating with designer Simone Rocha, whose sparkly Crocs were recently worn by actress Michelle Yeoh. These efforts have helped Crocs increase its sales in China. Overall, Crocs' revenue grew by 3. 4% to $1. 1 billion over the three months to June 30, but the company reported a $448. 6 million pre-tax loss, compared to a $296 million profit last year. The share price suffered its worst single-day drop in almost 15 years after these results were announced. Crocs also owns the casual footwear brand HEYDUDE, which it acquired for $2. 5 billion in 2021.

In summary, Crocs is facing significant challenges in the US due to changing consumer preferences, economic uncertainty, and tariffs. However, the brand is finding success in China by working with influencers and designers. Despite a slight increase in overall revenue, Crocs' financial losses and falling share price highlight the difficulties the company is experiencing.