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Crocs Inc.’s shares fell as much as 16 percent in US premarket trading after the seller of brightly coloured plastic clogs tempered growth expectations and warned of sales declines for its casual HeyDude brand.
Crocs’ sales growth in the third quarter, which includes the crucial back-to-school shopping period, remained flat. The company said it expects 2024 sales growth of 3 percent, the low end of its prior guidance of 3 percent to 5 percent. Dragging revenues was Crocs’ casual sneaker and loafer brand, HeyDude. The brand’s full year sales are expected to fall 14.5 percent compared to a year ago, lower than its previous guidance of down 8 percent to 10 percent.
“HeyDude’s recent performance and the current operating environment are signalling it will take longer than we had initially planned for the brand to turn a corner,” said chief executive officer Andrew Rees in a press release.
After a decade-long fallow period during the 2010s, Crocs regained relevance following a strategic move to target teens with endorsements from celebrities like Justin Bieber and Post Malone. Annual sales more than tripled over the last four years.
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The shoemaker has run into trouble among schools across the US that are banning Crocs due to safety concerns and distractions. The company has said the school restrictions are “baffling.”
Crocs shares were up 47 percent for the year through Monday’s close, while the S&P 500 index has risen 22 percent.
By Julia Fanzeres
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