Crocs, Inc. Revises Second Quarter and Full Year 2008 Sales and Earnings Per Share Guidance
July 24 2008 - 4:01PM
Business Wire
Crocs, Inc. (NASDAQ: CROX) today announced that, based upon
preliminary performance results through June 30, 2008, it expects
its second quarter 2008 revenue to be in the approximate range of
$218 million to $223 million and expects diluted earnings per share
in the range of $0.03 to $0.07, including a portion of the
previously announced pre-tax charge associated with the shutdown of
the Company�s Canadian manufacturing operations equaling
approximately $1.4 million, or $0.01 per diluted share. These
revised estimates compare to its previous guidance of revenues of
approximately $247 million to $258 million and expected diluted
earnings per share between $0.42 and $0.47, which included the
charge associated with the shutdown of the Canadian manufacturing
operations. Despite lower revenue expectations for the second
quarter, the Company still anticipates inventories as of June 30,
2008 to decrease approximately 10% to 15% from $266 million in the
first quarter, and receivable days sales outstanding to improve
approximately 20%-25% as compared to March 31, 2008. Ron Snyder,
President and Chief Executive Officer of Crocs, Inc. commented,
�The domestic marketplace proved to be more challenging during the
second quarter than we had originally anticipated. While we did
experience solid sell-through with many of our major accounts,
retailers across the board were extremely cautious with their level
of reorders, choosing to operate with leaner inventories versus a
year ago. Our international markets continued to perform better
than the U.S., with Asia up roughly 65% and Europe up approximately
13%, however this was below our initial projections. Although we
made important progress reducing costs in our manufacturing and
distribution platform, primarily shutting down our Canadian
facility and lowering our headcount, it was not enough to offset
the lower than projected sales volumes. At the same time, we
continue with our global brand building initiatives and while the
increase in marketing, retail and advertising spend negatively
impacted our near-term profitability we believe this is a key
component to our long-term success.� Crocs also revised its outlook
for the fiscal year ending December 31, 2008. For fiscal 2008,
revenues are now expected be down modestly compared to 2007 levels
with diluted earnings per share of approximately break-even,
including the total pre-tax charge of approximately $20 million, or
$0.16 per diluted share associated with the shutdown of the
Company�s Canadian manufacturing operations. For the third quarter
ending September 30, 2008, the Company expects revenues to be in
the range of $195 million to $205 million and diluted earnings per
share of approximately $0.01 to $0.05. Mr. Snyder concluded, �We
are obviously disappointed with the economic situation in the U.S.
and parts of Europe, however, we remain confident about the
long-term prospects of this business. We are currently in the
process of sizing our business to be profitable on lower projected
sales volumes and these cost actions will continue through the end
of the year. Operationally, we are implementing several strategic
programs aimed at enhancing our supply chain, further reducing
costs and improving working capital. We believe that many of our
markets are underpenetrated and should provide meaningful growth
opportunities for our products well into the future. While in the
U.S. we are focused on expanding consumer awareness, shelf space
and distribution for our new collections of footwear. Our entire
organization is committed to executing our business plan and
returning greater value to our shareholders.� Crocs will host a
conference call to discuss its revised outlook tomorrow, July 25,
2008 at 8:30 am ET. A live broadcast will be available by clicking
the �Investor Relations� link under the Company section at
www.crocs.com and at www.earnings.com. An audio replay of the
webcast will be archived on the Crocs website for two weeks. Please
logon to either website at least fifteen minutes prior to the
webcast in order to download the necessary software. Crocs expects
to report actual fiscal 2008 second quarter results on or about
August 7, 2008. About Crocs, Inc: Crocs, Inc. is a rapidly growing
designer, manufacturer and retailer of footwear for men, women and
children under the Crocs� brand. All Crocs� brand shoes feature
Crocs� proprietary closed-cell resin, Croslite�, which represents a
substantial innovation in footwear. The Croslite� material enables
us to produce soft, comfortable, lightweight, superior-gripping,
non-marking and odor-resistant shoes. These unique elements make
Crocs� footwear ideal for casual wear, as well as for professional
and recreational uses such as boating, hiking, hospitality and
gardening. The versatile use of the material has enabled us to
successfully market our products to a broad range of consumers. In
2006, the company acquired Jibbitz LLC, a unique accessory brand
with colorful snap-on products specifically suited for Crocs shoes.
Today, more than 1,600 Jibbitz designs are available to consumers
for personalizing and customizing their Crocs� footwear. Please
visit www.crocs.com for additional information. Forward Looking
Statements The matters regarding the future discussed in this news
release include forward-looking statements as defined in the
Private Securities Litigation Reform Act of 1995, including
statements related to our preliminary results, future prospects,
inventory and strategic advances and our expectations regarding our
growth, international expansion, bookings, worldwide popularity and
product development. These statements involve known and unknown
risks, uncertainties and other factors which may cause our actual
results, performance or achievements to be materially different
from any future results, performances or achievements expressed or
implied by the forward-looking statements. These risks and
uncertainties include, but are not limited to, the following: our
limited operating history; our significant recent expansion;
changing fashion trends; our reliance on market acceptance of the
small number of products we sell; our ability to develop and sell
new products; our limited manufacturing capacity and distribution
channels; our reliance on third party manufacturing and logistics
providers for the production and distribution of our products; our
reliance on a single-source supply for certain raw materials; our
management and information systems infrastructure; our ability to
obtain and protect intellectual property rights; the effect of
competition in our industry; the effects of seasonality on our
sales; our ability to attract, assimilate and retain management
talent; and other factors described in our annual report on Form
10-K under the heading �Risk Factors,� and our subsequent filings
with the Securities and Exchange Commission. Readers are encouraged
to review that section and all other disclosures appearing in our
filings with the Securities and Exchange Commission. The final
results for the second quarter of 2008 may differ from the
preliminary results discussed above. We do not undertake any
obligation to update publicly any forward looking statement,
including, without limitation, any estimate regarding revenues or
earnings, whether as a result of the receipt of new information,
future events, or otherwise.
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