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Investing.com - Barclays (LON:BARC) downgraded Crocs (NASDAQ:CROX) from Overweight to Equalweight on Thursday, slashing its price target to $81.00 from $119.00 amid ongoing macro uncertainty and shifting consumer preferences. According to InvestingPro data, the stock currently trades at a P/E ratio of 4.6x with impressive gross margins of 59.25%.
The downgrade comes as Crocs faces multiple headwinds, including a depressed forward order book, a consumer shift toward athletic footwear in the U.S. market, and worsening performance from its HEYDUDE brand that requires continued investment.
Barclays also cited incremental tariff pressure with limited pricing power to offset costs, along with a negative inflection in sales-to-inventory spread suggesting further margin pressure into the fourth quarter of 2025 and early 2026.
The firm acknowledged some offsetting factors, including Crocs’ strong cash flow, share repurchase program, and current forward P/E multiple of approximately 6.0x that could provide downside protection.
Crocs shares plunged 28.6% by 3:30 p.m. ET on Thursday following the company’s second-quarter 2025 results and lower third-quarter guidance, significantly underperforming the S&P 500’s 0.2% decline.
In other recent news, Crocs Inc. reported strong financial results for the second quarter of 2025. The company achieved adjusted diluted earnings per share of $4.23, surpassing the anticipated $4.02. Revenue also exceeded expectations, totaling $1.15 billion compared to the projected $1.14 billion. These results highlight Crocs’ ability to outperform analyst estimates. However, despite the positive earnings and revenue figures, concerns remain among investors regarding future guidance and market challenges. The company’s stock performance reflected these concerns, although specific stock price movements are not detailed here. Analysts and investors will likely continue to monitor Crocs’ strategic responses to these challenges in upcoming quarters.
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