"Dongdong ugly shoes" are not selling well, Crocs plummeted nearly 30%, CEO: American customers are not buying things anymore, and even not going to stores

The once-popular "hole shoes" manufacturer Crocs is facing a dual blow from waning consumer enthusiasm and macroeconomic headwinds. On Thursday, after releasing disappointing performance forecasts, the stock price of the rubber hole shoe manufacturer plummeted 29.2% at the close on Wall Street, hitting its lowest point in nearly three years. This also marks its heaviest single-day blow since October 2011. The company warned that third-quarter revenue is expected to decline by 9% to 11% year-on-year, contrary to the slight growth generally expected by analysts in a Reuters survey. Crocs CEO Andrew Rees candidly stated during a conference call with analysts: "We are seeing American consumers being very cautious with their discretionary spending... They are not buying, and they are not even going to stores; we are seeing foot traffic decline." Rees expects this impact to be felt most severely in wholesale and outlet businesses, which are more favored by low-income consumers. He added that consumers are facing potential price increases now and in the future, which may further dampen their willingness to spend. This event is not only a challenge for Crocs itself but also reflects the broader chill that the consumer market is experiencing. The clearest signal conveyed by Crocs' management is that American consumers are tightening their wallets, especially among those who are more price-sensitive. According to the Financial Times, McDonald's stated this week that poorer American customers are reducing their fast-food consumption to save money. Luxury brand Ralph Lauren also indicated on Thursday that while spending from its core consumers "remains resilient," the company is "still acting cautiously" to cope with an "uncertain, potentially inflationary environment." Is the "ugly shoe" trend cooling? The rise of sports fashion In addition to external consumer headwinds, Crocs is also facing a more fundamental challenge: the "ugly shoe" fashion trend that greatly propelled its growth may be cooling down. Rees acknowledged during the meeting that consumer tastes are changing, and the trend of athletic footwear is rising again. Looking ahead, he believes that major sporting events such as the 2026 FIFA World Cup and the 2028 Los Angeles Olympics will favor traditional sports brands like Nike and Adidas, suggesting that Crocs may face more intense competition from the sports fashion sector. Financial concerns and tariff impacts Meanwhile, the aftereffects of a massive acquisition are becoming apparent. Financial reports show that in the second quarter ending June 30, Crocs posted a net loss of $492.3 million. This was primarily due to the company writing down over $700 million for its $2.5 billion acquisition of the casual shoe brand HEYDUDE. Although revenue for the quarter grew 3.4% year-on-year to $1.1 billion, in line with analyst expectations, the massive loss exposed the company's difficulties in business integration and value assessment In addition, the pressure from tariff policies has also cast a shadow over the company's future. According to Chief Financial Officer Susan Healy, based on the current procurement locations, the tariff policy is expected to impact the company by approximately $40 million in the second half of 2025, with an annual impact as high as $90 million. To cope with rising costs, the company is reducing discount levels, but this move may further suppress sales