Crocs trims orders amid cautious shoppers

Crocs plans to cut orders for the second half as it signals a weak consumer and a softer near term outlook.

Crocs tightens orders amid cautious consumer

Crocs posted a tough second quarter with a net loss of 492.3 million dollars, or 8.82 dollars per share, compared with a 228.9 million dollar profit a year earlier. The gap was driven by a 737 million dollar impairment charge tied to its Heydude brand. Revenue rose 3.4 percent to 1.15 billion dollars, roughly in line with estimates, but the stock fell nearly 30 percent after the company warned on the outlook. The company noted import tariffs on goods from Vietnam, China, Indonesia and Cambodia add to cost pressures.

For the second half, Crocs will reduce orders as the U.S. consumer remains cautious about discretionary spending. The company expects third quarter revenue to fall 9 to 11 percent year over year and for adjusted operating margin to be about 18 to 19 percent, down from 25.4 percent a year earlier. Crocs has already cut about 50 million dollars in costs and will pull back on promotions and reset Heydude stock to align with new retail expectations. The company did not provide full year guidance.

These results underline how quickly a brand built on a simple, casual niche can be exposed to macro headwinds. Tariffs and higher input costs squeeze margins even as Crocs pulls back promotions to protect profits. The Heydude impairment shows that a once fast growing segment can require a costly restructuring, and it will take time to rebuild momentum.

In the longer run, Crocs can still win if it balances inventory, guards cash flow and uses pricing power to offset tariff effects. Yet the lack of full year guidance adds uncertainty and could spark continued volatility in the shares. The episode serves as a reminder that even quirky growth stories must manage costs and supply chain risk in a shifting economy.

Highlights

The coming quarters will test Crocs as it tries to reset stock and regain momentum.