Will increased tariffs on China crush Crocs?

NIWOT — If the United States follows through on threats to impose additional tariffs on imported Chinese goods, Crocs Inc. (Nasdaq: CROX), the Niwot-based maker of casual footwear, does not anticipate the move will have a “material adverse impact” on business, according to a company disclosure released Tuesday.

Assuming a 25 percent tariff is applied in August, the anticipated 2019 financial hit is $5 million. Crocs’ net income for the first quarter of fiscal year 2019 was $24.71 million, up from $16.45 million in the same period last fiscal year.

Crocs has “a globally diversified sourcing base” and is working to reduce sourcing from China, according to the disclosure filed with the U.S. Securities and Exchange Comission.

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Currently, about 30 percent of the company’s U.S. product is imported from China. Crocs plans to reduce its Chinese imported product to about 10 percent by 2020.

“We are evaluating various mitigation initiatives which will be implemented to lessen the impact on Crocs of any tariffs ultimately put into effect,” the company said in the disclosure.