Crocs Expects $11 Million in Profit Headwinds This Year as a Result of Trump’s Tariffs
Stephen Garner
Senior Editor
Crocs is the latest footwear company gearing up for more tariffs this year.
On its fourth quarter 2024 earnings call on Thursday, Andrew Rees, chief executive officer of Crocs Inc, told analysts that the company is embedding an additional 10 percent tariff on goods imported from China into the U.S. beginning Feb. 4 as well as the anticipated additional 25 percent tariff on goods importing from Mexico beginning in March. This assumes these will stay in place for the remainder of the year, the CEO noted.
“In 2025, we expect the share of enterprise imports into the U.S. from China to be approximately 15 percent, with Crocs at 10 percent and Hey Dude at 27 percent,” Rees said. “Our exposure to Mexico is expected to be under 4 percent and for the Crocs brand only.”
Watch on FN
The CEO added that the company estimates an approximate $11 million headwind to gross profit from these additional tariffs in fiscal 2025.
As for if the company expects to raise prices this year, Rees said this is something they are thinking “very long and hard about” going into the new fiscal year. “At this point, we’re not planning significant price increases in the short term, but we don’t necessarily know what’s going to happen in the longer term,” the executive maintained. “We continue to remain very nimble relative to what that might entail.”
Tariffs and the price increases that could follow have been a growing concern among the footwear industry since President Trump took office last month. As of now, Trump’s new 10 percent duties on China-made goods took effect earlier this month via an executive order, which blamed China for its role in America’s fentanyl crisis. Should they stick, China’s tariffs would impact about $20 billion worth of U.S. imports.
In January, before the new tariffs told hold, shoe prices increased 1 percent from a year ago, the most in six months, the Footwear Distributors and Retailers of America (FDRA) reported.
This latest increase in shoe prices is just the beginning if President Trump’s heightened tariffs on China remain in place. As for when these increases may hit consumers, FDRA president and chief executive officer Matt Priest told FN last week that they could come as soon as back-to-school.
In the fourth quarter of fiscal 2024, Crocs reported that its consolidated revenues were $990 million, an increase of 3.1 percent from $960.1 million the same time last year. As for the full fiscal 2024, the company reported consolidated revenues for $4.10 billion, an increase of 3.5 percent from $3.96 billion in fiscal 2023.
The record earnings for the year led Crocs stock to jump nearly 24 percent by the closing bell on Thursday.
