Welcome to the 97th edition of our Newsletter EdGenie's 📜 Sunday Scroll...

Every Sunday I send out actionable tips, tricks and real-world application insights from my 15 year experience coaching students to achieve As and A*s in their Economics A Levels via EdGenie.

Hey Genies, 👋

Huge congratulations to every single one of you who received your A level results on Thursday. (remember to reply to this email - letting me know how you got on)

I want you to know this clearly: whatever grade you received, it is a success.

If you beat your grades – well done.

If you met your grades – well done.

And even if you missed your grades or your uni offer – this is your chance to pivot, reset, and redirect.

The truth is this: every outcome is positive, if you choose to see it that way.

Do that, and the next stage of your journey becomes much easier.

Now, if you’re resitting Economics or Maths or going into Year 13 (yes – EdGenie Maths is live now too), I’ve spoken to over 100 students and parents in the past couple of days who are gearing up for a fresh start.

The hunger, the desire, the determination to get it right this time?

It’s incredible.

And here’s the good news - you’re not on your own.
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 EdGenie has helped students achieve a 64% A/A* success rate two years running now (remember we're not a school/college), and you’ll be in exactly the right place if you want:

✅ A/A* guidance every step of the way

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So whatever your result – celebrate it, learn from it, and then set yourself up for the next win.

If you’re resitting or heading into Year 13 and you’re serious about top grades, just reply to this email or message us directly on Whatsapp 👉 .

Your next chapter starts now.

Let’s make it count.

Best Regards

Emre

📉 Share Price Slump – Crocs’ shares fell nearly 30%, the steepest drop since 2011, after issuing weaker-than-expected sales guidance.

🛍️ Cautious Consumers – US shoppers are cutting back on discretionary spending, particularly lower-income customers, reducing footfall in stores.

📊 Revenue Forecast – Q3 revenue is expected to fall by 9–11% year-on-year, surprising analysts who anticipated growth.

💸 Tariff Trouble – US tariffs are set to cost Crocs $40m in the second half of 2025, and $90m annually, raising production costs.

🔄 Changing Trends – The “ugly shoe” fashion craze may be fading, with athletic shoes gaining popularity ahead of the 2026 World Cup and 2028 Olympics.

🏬 Wholesale & Outlets Hit – These segments, popular with price-sensitive customers, are expected to feel the brunt of reduced spending.

🌎 International Resilience – International sales growth helped offset North American declines, keeping total Q2 revenue up 3.4% to $1.1bn.

💔 Net Loss – Crocs posted a $492.3m loss in Q2 due to $700m in writedowns linked to its $2.5bn purchase of HEYDUDE.
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Q. Explain how a fall in discretionary consumer spending could affect Crocs’ total revenue.
A. A fall in discretionary spending means consumers allocate less income to non-essential goods such as branded casual footwear. Since Crocs’ products are not necessities, the demand curve for its shoes is likely to shift leftwards, lowering equilibrium price and quantity. With reduced quantity sold, total revenue (P × Q) will fall, especially if demand is price elastic. This effect is amplified in Crocs’ wholesale and outlet segments, where lower-income customers dominate and are more sensitive to economic uncertainty. As aggregate demand in the economy falls, Crocs may also face reduced economies of scale, further pressuring profitability.

Q. Explain why Crocs’ footwear might be considered to have a high income elasticity of demand (YED).
A. Income elasticity of demand measures the responsiveness of quantity demanded to changes in consumer income. Crocs’ footwear is likely a normal good, possibly bordering on a luxury good for some lower-income consumers, meaning YED > 1. This is supported by evidence that sales are falling most sharply among poorer customers when economic conditions weaken. As disposable incomes decline, consumers prioritise essentials over branded clogs, causing a proportionately larger fall in demand. Conversely, in periods of income growth, Crocs’ sales might rise faster than income, showing high income sensitivity.

Q. Using a cost and revenue diagram, explain how tariffs on imported footwear could affect Crocs’ profitability.
A. Tariffs increase the cost of imported inputs or finished goods, shifting Crocs’ cost curves upward. In a standard cost–revenue diagram, this would be shown by the average cost (AC) and marginal cost (MC) curves shifting upward, reducing the vertical gap between average revenue (AR) and AC at the profit-maximising output (where MC = MR). The article notes a $40mn tariff cost in H2 2025, which raises unit costs and squeezes profit margins unless Crocs increases prices. However, given the price sensitivity of some customers, passing on full costs may reduce quantity demanded and further lower total profits.

Q. Discuss whether changes in non-price factors, such as major sporting events boosting athletic shoe demand, are more important than price factors in determining Crocs’ long-term sales.
A. Changes in non-price factors, such as fashion trends and major sporting events, can significantly affect Crocs’ long-term sales by shifting the entire demand curve. For example, the fading “ugly shoe” trend reduces desirability at all price points, while events like the 2026 World Cup and 2028 Olympics are likely to boost demand for athletic footwear, benefiting rivals like Nike and Adidas. Such shifts can be more lasting than price changes because they influence consumer preferences, brand image, and perceived product relevance. However, price factors also matter — especially for Crocs’ lower-income customer base, which is more price sensitive (high PED) and affected by inflation or tariffs that raise retail prices. In the short run, discounting or competitive pricing can temporarily boost sales volumes, but if the product falls out of fashion, the long-run effect of non-price factors may dominate. Therefore, while price can influence short-term revenue, persistent changes in tastes and consumer priorities are likely to have a greater long-term impact on Crocs’ demand.

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