Crocs (CROX) risk factors, FY2024 10-K

Risks Related to Our Products

1. 01Our success depends substantially on the value of our brands; failure to strengthen and preserve this value, either through our actions or those of our business partners, could have a negative impact on our financial results
2. 02We face significant competition
3. 03Introducing new products may be difficult and expensive. If we are unable to do so successfully, our brands may be adversely affected, and we may not be able to maintain or grow our current revenue and profit levels
4. 04Failure to adequately protect our trademarks and other intellectual property rights and counterfeiting of our brands could divert sales, damage our brands’ image, and adversely affect our business
5. 05Failure to continue to obtain or maintain high-quality endorsers of our products and social media influencers could harm our business
6. 06We rely on technical innovation to compete in the market for our products

Risks Related to the Economy

1. 07Changes in global economic conditions, including, but not limited to, those driven by inflation, may adversely affect consumer spending and the financial health of our customers and others with whom we do business, which may adversely affect our financial condition, results of operations, and cash resources
2. 08Ongoing wars could cause further disruptions in the global economy as well as a negative impact on our business, financial condition, and results of operations
3. 09A pandemic, epidemic, or other public health emergency has had an adverse impact, and may have a future material adverse impact, on our business, operations, liquidity, financial condition, and results of operations

Risks Related to Our Supply Chain

1. 10Supply chain disruptions could interrupt product manufacturing and global logistics and increase product costs
2. 11We depend solely on third-party manufacturers located outside of the U.S
3. 12Our business could suffer if we need to replace either our third-party manufacturers or our distribution centers
4. 13Our operations are dependent on the global supply chain and impacts of supply chain constraints and inflationary pressure could adversely impact our operating results
5. 14If we do not accurately forecast consumer demand, we may have excess inventory to liquidate or have greater difficulty filling our customers’ orders, either of which could adversely affect our business
6. 15Our third-party manufacturing operations must comply with labor, trade, and other laws. Failure to do so may adversely affect us
7. 16We depend on a number of suppliers for key production materials, and any disruption in the supply of such materials could interrupt product manufacturing and increase product costs

Risks Related to International Operations

1. 17Changes in foreign exchange rates, most significantly but not limited to the Euro, South Korean Won, and Chinese Yuan or other global currencies could have a material adverse effect on our business and financial results
2. 18Government actions and regulations, such as export restrictions, tariffs, and other trade protection measures could adversely affect our business
3. 19We conduct significant business activity outside the U.S., which exposes us to risks of international commerce
4. 20We may be unable to successfully execute our long-term growth strategy, maintain or grow our current revenue and profit levels, or accurately forecast demand and supply for our products
5. 21Successfully executing our long-term growth and profitability strategy will depend on many factors, including our ability to
6. 22Our ability to realize the benefits from the Acquisition is substantially dependent on our ability to grow HEYDUDE
7. 23Moreover, HEYDUDE depends on a limited number of third-party manufacturers that are concentrated in China to produce its
8. 24Artificial intelligence presents risks and challenges that can impact our business including by posing security risks to our confidential information, proprietary information, and personal data
9. 25If our online e-commerce sites, or those of our customers, do not function effectively, our business and financial results could be materially adversely affected
10. 26Our financial success depends in part on the strength of our relationships with, and the success of, our wholesale and distributor customers
11. 27Operating company-operated retail stores incurs substantial fixed costs. If we are unable to generate sales, operate our retail stores profitably, or otherwise fail to meet expectations, we may be unable to reduce such fixed costs and avoid losses or negative cash flows
12. 28Our financial results may be adversely affected if substantial investments in businesses and operations fail to produce expected returns
13. 29We depend on employees across the globe, the loss of whom would harm our business
14. 30We are subject to periodic litigation, which could result in unexpected expenditures of time and resources
15. 31Global climate change, including extreme weather conditions, natural disasters, public health issues, or other events outside of our control, as well as related regulations, could negatively impact our operating results and financial condition
16. 32Our restated certificate of incorporation, amended and restated bylaws, and Delaware law contain provisions that could discourage a third-party from acquiring us and consequently decrease the market value of an investment in our stock
17. 33Increasing scrutiny from investors, regulators, and other key stakeholders with respect to our environmental, social, and governance practices may impose additional costs on us or expose us to new or additional risks
18. 34Despite our current level of indebtedness, we may be able to incur substantially more debt, which could increase the risks to our financial condition described above

Financial and Accounting Risks

1. 35We may be required to record impairments of long-lived assets or incur other charges relating to our company-operated retail operations
2. 36We may incur impairments of the carrying value of our goodwill and other intangible assets, which could have a material adverse effect on our business and financial results
3. 37Our quarterly revenues and operating results are subject to fluctuation as a result of a variety of factors, which could increase the volatility of the price of our common stock
4. 38The risks of maintaining significant cash abroad could adversely affect our cash flows in the U.S., our business, and financial results
5. 39Changes in tax laws and unanticipated tax liabilities and adverse outcomes from tax audits or tax litigation could adversely affect our effective income tax rate and profitability
6. 40We may fail to meet analyst and investor expectations, which could cause the price of our stock to decline