Crocs Cuts Guidance, Stock Down 35% After Hours

Oct 17, 2011
J. Webster
Comments Off on Crocs Cuts Guidance, Stock Down 35% After Hours

Traders didn’t like what they heard from Crocs after hours, as they’ve taken the stock (CROX) down 35%, from nearly $27 a share to $17. Ouch. Crocs doesn’t report this quarters earnings until October 27th, I guess they didn’t want to wait until then to drop the bad news.

Why did they cut guidance? Headwinds in Europe and a decrease in sales at mall kiosks and outlets. However, they will have those new Crocs for kids, the ones that change color in the sun. I guess this is a hit with the kids. Still, this ain’t going to save them.

Crocs, Inc. announced that for third quarter of 2011, it expects revenue to be in the range of $273.0 to $275.0 million, an increase of approximately 27% over the $215.6 million of revenue reported in the third quarter last year. This compares to the Company’s previous guidance for third quarter 2011 revenue of $280.0 million.

For the third quarter 2011, the Company now expects diluted earnings per share (EPS) to be between $0.31 and $0.33 compared to its previous guidance of diluted earnings per share of $0.40. For fourth quarter of 2011, it expects revenue to grow in the low teen range on a percentage basis over the same period a year ago. The Company reported revenue of $179.19 million in fourth quarter of 2010. According to I/B/E/S Estimates, analysts are expecting the Company to report revenue of $280 million and EPS of $0.40 for third quarter of 2011; revenue of $221 million for fourth quarter of 2011. (Reuters)

John McCarvel, President and Chief Executive Officer of Crocs Inc had this to say:

“Our business in Asia has continued to perform very well on the strength of our new product introductions. After a very positive response to our spring / summer 2011 product line in the Americas, we experienced some softness in our consumer direct channel in kiosk and outlet locations. Gross margins on a consolidated basis were slightly lower in the quarter than our initial expectations driven in part by lower direct sales as a percentage of total revenue.

“While we are disappointed with this guidance revision, we are very pleased with our year-to-date performance and believe that the Crocs brand has never been stronger,” continued Mr. McCarvel. “We remain focused on further penetrating new footwear categories and committed to building our market presence during the fall and holiday seasons. Looking ahead, based on current trends, we believe that fourth quarter revenue will grow in the low teen range on a percentage basis over the same period a year ago.”

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