According to Crocs, as the U.S. continues to threaten to expand current tariffs to cover footwear imports from China, the Company remains confident its business will suffer little or no material impact due to its 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 US$5 million”, said Crocs. “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”.
The footwear manufacturer expects the amount of U.S. product sourced from China to be below 10% for 2020 and said it is evaluating various mitigation initiatives that are to be implemented to “lessen the impact on Crocs of any tariffs ultimately put into effect”.