Crocs(US:CROX) Hua Er Jie Jian Wen·2025-08-08 00:17Core Viewpoint - Crocs is facing a significant decline in consumer interest and macroeconomic challenges, leading to a sharp drop in stock price and disappointing revenue forecasts [1][2]. Group 1: Financial Performance - Crocs' stock price fell by 29.2%, reaching its lowest point in nearly three years after a disappointing earnings outlook [1]. - The company expects third-quarter revenue to decline by 9% to 11% year-over-year, contrary to analyst expectations of slight growth [1]. - In the second quarter ending June 30, Crocs reported a net loss of $492.3 million, primarily due to over $700 million in impairment related to the $2.5 billion acquisition of HEYDUDE [7][8]. Group 2: Consumer Behavior - CEO Andrew Rees noted that American consumers are being very cautious with discretionary spending, leading to decreased foot traffic in stores [2]. - The tightening of consumer wallets is particularly affecting low-income groups, which are more sensitive to price changes [4]. Group 3: Market Trends - The "ugly shoe" trend that previously boosted Crocs' growth may be waning, with a resurgence of interest in athletic footwear [5][6]. - Upcoming major sporting events, such as the 2026 World Cup and the 2028 Los Angeles Olympics, are expected to favor traditional sports brands like Nike and Adidas, increasing competition for Crocs [6]. Group 4: Regulatory and Cost Pressures - Tariff policies are projected to impact Crocs significantly, with an estimated $40 million hit in the second half of 2025 and an annual impact of up to $90 million [9]. - In response to rising costs, the company is reducing discounting, which may further suppress sales [9].