Can Crocs Navigate Tariff Risks and Protect Margins in 2026?

Crocs, Inc. CROX continues to face meaningful tariff-related pressures, as reflected in its latest quarterly performance. However, the company has also demonstrated multiple levers to help offset margin headwinds. In the third quarter of fiscal 2025, Crocs reported an adjusted gross margin of 58.5%, representing a 110-basis point (bps) decline year over year. This contraction was mainly due to a higher-than-anticipated tariff impact, which alone weighed on margins by 230 bps.Despite these challenges, Crocs has already realized tangible benefits from cost-saving initiatives. The company implemented $50 million in gross cost savings in fiscal 2025, providing partial relief against external cost pressures. Building on this momentum, management has identified an additional $100 million in incremental gross cost savings expected to benefit fiscal 2026. These initiatives are focused on simplifying the organizational structure, deliberately reducing spending in non-critical areas, and further optimizing the supply chain.Crocs is maintaining a disciplined approach to managing its adjusted SG&A base to drive operating leverage in fiscal 2026 while enhancing flexibility across the profit and loss statement. Management emphasized that several strategic and tactical actions have already been executed to support brand momentum, alongside efforts to create a more adaptable and resilient cost structure. Together, these actions underscore a clear focus on sustaining consistent and profitable long-term growth.In addition, Crocs is benefiting from supply chain efficiencies stemming from years of investment and the deeper integration of the HEYDUDE and Crocs supply chains. These efforts have delivered meaningful operational improvements and cost advantages. While the company has not yet provided formal guidance for fiscal 2026, its proactive cost management and supply chain initiatives position Crocs to better navigate tariff pressures and protect profitability.The Zacks Rundown for CROXCrocs’ shares have lost 20.3% in the past six months compared with the industry’s decline of 9.9%. CROX presently carries a Zacks Rank #3 (Hold). Image Source: Zacks Investment ResearchFrom a valuation standpoint, CROX trades at a forward price-to-earnings ratio of 7.05X, lower than the industry’s average 17.76X.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for CROX’s current year earnings estimates implies a year-over-year decline of 7.9%, and the next year earnings estimates indicate year-over-year growth of 3.9%. CROX delivered a trailing four-quarter earnings surprise of 14.3% on average.Image Source: Zacks Investment ResearchStocks to ConsiderSome better-ranked stocks have been discussed below:Vince Holding Corp. VNCE provides luxury apparel and accessories in the United States and internationally. It operates through Vince Wholesale and Vince Direct-to-Consumer segments. At present, the company flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for VNCE’s current fiscal-year sales and earnings implies growth of 2% and 26.3%, respectively, from the year-ago figures. VNCE has delivered a trailing four-quarter earnings surprise of 229.6%, on average.Kontoor Brands, Inc. KTB, a lifestyle apparel company, designs, produces, procures, markets, distributes, and licenses denim, apparel, footwear, and accessories, primarily under the Wrangler and Lee brands. At present, Kontoor Brands holds a Zacks Rank of 2 (Buy).The consensus estimate for Kontoor Brands’ current fiscal-year sales and earnings implies growth of 19.4% and 12.5%, respectively, from the year-ago figures. KTB has delivered a trailing four-quarter earnings surprise of 14 %, on average.Guess?, Inc. GES designs, markets, distributes, and licenses lifestyle collections of apparel and accessories for men, women, and children. At present, the company holds a Zacks Rank of 2.The Zacks Consensus Estimate for GES’s current fiscal-year sales implies growth of 8%, and the same for current fiscal-year earnings implies a decline of 13.8% from the year-ago figures. GES has delivered a trailing four-quarter earnings surprise of 45%, on average.Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Guess?, Inc. (GES): Free Stock Analysis Report Crocs, Inc. (CROX): Free Stock Analysis Report Vince Holding Corp. (VNCE): Free Stock Analysis Report Kontoor Brands, Inc. (KTB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks