Crocs warns staff that tariffs will impact expenses, incentive targets

Crocs Inc. employees were urged to closely manage their expenses as the company grapples with supply chain “volatility” caused by President Donald Trump’s trade war, according to the contents of a memo seen by Bloomberg.

The note, which was said to have been sent Thursday by Chief Executive Officer Andrew Rees, said staff should “remain prudent for the remainder of the year” and be thoughtful about travel and which initiatives to prioritize. The memo also said that the board’s compensation committee “has agreed to establish more realistic targets for our internal incentives plan” as a result of the economic environment.

Crocs, known for its clogs, is one of several retailers that have started to sound alarms over the impact of Trump’s policies, including on-again, off-again tariffs against countries that are key production hubs for the industry. Some companies are withdrawing financial guidance, while others have added tariff-related surcharges or frozen hiring.

Broomfield, Colorado-based Crocs produces about half of its name-brand shoes in Vietnam, which got a 90-day reprieve this week from 46% tariffs. The company also has third-party manufacturers in China, where US levies have been hiked to 145%.

“Given the state of the escalating and uncertain tariff environment, we are focused on managing our business prudently to maximize shareholder value over the medium to long-term,” a Crocs spokesperson said in an emailed statement.