Crocs, Inc., a world leader in innovative casual footwear for men, women, and children, today provided details about the potential impact of proposed footwear tariffs on product imported into the United States from China.
Potential Impact of U.S. Imposed Tariffs:
The United States government continues to threaten to expand current tariffs to cover footwear imports from China.
We do not anticipate that the tariffs, if put into effect, will have a material adverse impact on our business for the following reasons:
- Crocs has a globally diversified sourcing base.
- We currently import approximately 30% of our U.S. product from China. Assuming a 25% tariff takes effect on August 1, 2019, we estimate the 2019 impact at approximately $5 million.
- Our current sourcing mix reflects our need to balance ramping up incremental supply to meet the growing demand for our product and continuing our multi-year effort to reduce our sourcing from China.
- Based on what we know today, we expect the amount of U.S. product sourced from China will be below 10% for 2020.
- We are evaluating various mitigation initiatives which will be implemented to lessen the impact on Crocs of any tariffs ultimately put into effect.
The Stifel 2019 Cross Sector Insight Conference. A live broadcast of the Company’s presentation will be available by clicking the ‘Investor Relations’ link under the Company section on www.crocs.com. An audio replay of the webcast will be available on the Crocs website after the presentation.