Crocs sales are set to drop again; it wouldn’t be the first time
Shares clomped their way down almost 30% yesterday as Crocs execs warned that things could get ugly at the foam clog and Jibbitz giant.
Despite Q2 earnings actually coming in ahead of estimates, Crocs investors were perturbed by the company announcing that sales could drop as much as 11% in the third quarter — more than the 7% analysts had estimated.
However, for a shoe that’s been called weird-looking for much of its life, it’s no surprise that this isn’t the first time the Crocs team might have had to weather a downturn. Indeed, while Crocs revenues have grown more often than not — exploding in recent years on the back of buzzy collaborations — there have been periods where the foam clogs and sandals have looked a little downtrodden.
In late 2007, for instance, Crocs experienced a post-boom backlash. There were anti-Crocs Facebook groups with millions of members and a website called “Ihatecrocs.com” that produced videos of people doing things like cutting up Crocs with scissors. With supply outweighing demand, a deluge of similar shoes from lower-cost competitors like Walmart nearly sunk the brand.
But, while sales gradually started to climb again in the late aughts and early 2010s, a second era of decline was inbound, and the company pared back its product range and slashed its store count.
Now, with analysts cutting their forecasts — estimates of 2027 earnings per share have dropped from nearly ~$19.90 in March 2023 to ~$12.20 as of yesterday — Crocs will need to do something dramatic to avoid another brutal drop.
However, for a shoe that’s been called weird-looking for much of its life, it’s no surprise that this isn’t the first time the Crocs team might have had to weather a downturn. Indeed, while Crocs revenues have grown more often than not — exploding in recent years on the back of buzzy collaborations — there have been periods where the foam clogs and sandals have looked a little downtrodden.
In late 2007, for instance, Crocs experienced a post-boom backlash. There were anti-Crocs Facebook groups with millions of members and a website called “Ihatecrocs.com” that produced videos of people doing things like cutting up Crocs with scissors. With supply outweighing demand, a deluge of similar shoes from lower-cost competitors like Walmart nearly sunk the brand.
But, while sales gradually started to climb again in the late aughts and early 2010s, a second era of decline was inbound, and the company pared back its product range and slashed its store count.
Now, with analysts cutting their forecasts — estimates of 2027 earnings per share have dropped from nearly ~$19.90 in March 2023 to ~$12.20 as of yesterday — Crocs will need to do something dramatic to avoid another brutal drop.
