Shares of Crocs (NASDAQ:CROX) slid 11.5% in pre-market trading on Thursday after the shoe manufacturer issued a cautious forecast for the third quarter, despite reporting stronger-than-expected results for Q2.
The Colorado-based brand posted adjusted earnings per share of $4.23 for the second quarter, beating the Bloomberg consensus estimate of $4.00 and improving slightly from $4.01 a year earlier. Revenue grew 3.4% year-over-year to $1.15 billion, narrowly surpassing analysts’ expectations of $1.14 billion.
However, the company projected a decline in third-quarter revenue ranging from 9% to 11% compared to the same period in 2024. Crocs attributed the cautious outlook to “continued uncertainty from evolving global trade policy and related pressures around the consumer.”
Looking ahead, the firm forecasted an adjusted operating margin between 18% and 19% for Q3, factoring in an estimated negative impact of roughly 170 basis points due to both announced and pending tariffs.
In the second quarter, Crocs recorded an adjusted gross margin of 61.7%, up from 61.4% in the prior year and above the expected 60.6%. Adjusted operating margin, however, declined to 26.9% from 29.3% the year before, though it still exceeded the 26% analysts had predicted.
Adjusted operating income fell 5% year-over-year to $309.5 million, while adjusted net income dropped 2.5% to $237.5 million.
Due to ongoing market uncertainties, Crocs opted not to issue full-year guidance.
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