Crocs, Inc. (NASDAQ:CROX) shares plunged almost 25% after the shoemaker issued weak guidance for the third quarter.
The company said it expects revenue to be down 9% to 11% year-over-year, attributed to continued uncertainty regarding global trade policy and its related pressure on consumers.
It guided an adjusted operating margin of 18% to 19%, including a negative impact of 170 basis points from announced and pending tariffs.
This overshadowed an earnings beat for Q2, with EPS of $4.23 ahead of estimates of $4.01.
Revenue of $1.15, up 3.4% from the year-ago quarter, beat estimates of $1.14 billion.
Crocs brand revenue was up 5% at $960 million while HEYDUDE revenue was down 3.9% at $190 million.
Crocs CEO Andrew Rees said that while the company is pleased by its performance, he described the current operating environment as uncertain and challenging to predict.
“Against this, we have chosen to focus on managing expenses, including the $50 million in cost savings we have already implemented, reducing our inventory receipts, and pulling back on promotional activity to protect brand health in the marketplace,” Rees said.
“Although these actions will impact the topline of our business in the short term, they will position our business to win, drive margin dollars, and support continued cash flow generation longer term.”
Shares of Crocs traded down 24.4% at about $80 in early trade on Thursday.