Crocs, Inc. 10-Q filed Oct 29, 2026

Modified · Known or Anticipated Trends

•We continue to operate in an environment where consumers are feeling the effects of elevated interest rates, inflation, and future expected price increases, among other things, and as a result, there is more pressure on discretionary spending. Given this, our wholesale partners are also acting cautiously. In addition, geopolitical tensions have remained elevated across the globe and are having an adverse impact on the global economy. Most recently, the conflict in the Middle East has caused, and may continue to cause, a reduction in our revenues for several of our distributor markets and an increase in the costs of raw materials and transportation associated with elevated oil prices. Furthermore, as of JuneSeptember 30, 2026, the United States (“U.S.”) has imposed tariffs on foreign imports from multiple countries, including, most relevant ranging from 10% to us12.5%, a 10% tariff on all imports from including countries most relevant to us such as Vietnam, China, Indonesia, India, and Cambodia, respectively. On February 20, 2026, the United States Supreme Court ruled the President did not have the requisite authority to impose tariffs under the International Emergency Economic Powers Act (“IEEPA”). On March 4, 2026, the Court of International Trade ordered U.S. Customs and Border Protection to begin the refund process for all importers who were subject to IEEPA duties. While the timing remains uncertain, we currently estimate that we are eligible to receive a total of approximately $7075 million to $80 million in refunds related to these tariffs, including interest. As of JuneSeptember 30, 2026, no refunds were realized or considered realizable; accordinglywe received approximately $67 million of IEEPA tariff refunds, no benefit has been recognized under the gain contingency model. Subsequent to June 30, 2026, we receivedincluding interest. Of this amount, approximately $64 million of benefit is recorded within ‘Cost of sales’ and approximately $203 million of IEEPA tariff refunds. The corresponding benefit is expected to be recognized recorded within ‘Cost of salesInterest income’ in the condensed consolidated statements of operations during the third quarter of 2026. Additionallythree months ended September 30, in July 2026, the aforementioned 10%2026. These refunds are non-recurring. The tariffs expired and were replaced with new tariffs ranging from 10% to 12.5%that remain in effect continue to increase our product costs. At this time, it remains unclear what additional actions, if any, will be taken by the U.S. or other governments with respect to international trade agreements, the imposition of additional tariffs on goods imported into the U.S., tax policy related to international commerce, increased export control, sanctions and investment restrictions, trade matters, war, or foreign policy in general. We are continuing to monitor developments with respect to these policy changes and proposals.