What Happened?
Shares of footwear company Crocs (NASDAQ: CROX) fell 1.9% in the afternoon session after the company's third-quarter report showed declining sales and a weak forecast, which overshadowed a profit beat. Although earnings of $2.92 per share beat analyst estimates, investors focused on the negative details. Total sales fell 6.2% to $996 million. The core Crocs brand saw sales dip 2.5%, but the HEYDUDE brand's revenue dropped by a much sharper 21.6%. Adding to the concerns, the company projected that its fourth-quarter revenue would decline by approximately 8% compared to the previous year. Chief Executive Officer Andrew Rees commented that a large portion of consumers were “nervous” and “super cautious about their spending.” Following the report, Citigroup downgraded the stock to a “negative” rating, while other analysts also lowered their price targets.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Crocs? Access our full analysis report here.
What Is The Market Telling Us
Crocs’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock gained 4.9% on the news that optimism surged over a potential trade truce between the U.S. and China. This sector, which includes companies that sell non-essential goods like apparel and entertainment, is particularly sensitive to international trade relations. Many of these businesses rely on China for manufacturing and as a significant consumer market. A favorable trade agreement could lead to lower tariffs, reducing production costs and potentially boosting sales in the region. The easing of trade tensions often improves overall economic sentiment, which can encourage consumers to spend more freely on discretionary items, directly benefiting these companies' revenues and profitability.
Crocs is down 26.5% since the beginning of the year, and at $80.92 per share, it is trading 32.7% below its 52-week high of $120.26 from May 2025. Investors who bought $1,000 worth of Crocs’s shares 5 years ago would now be looking at an investment worth $1,504.
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