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Crocs Shares Fall On Weak 2nd-quarter Outlook

The Associated Press

NEW YORK (AP) — Shares of Crocs Inc. dropped on Friday, after the plastic-shoe maker said it expects second-quarter results below analyst expectations.

Shares fell $1.06, or 30.4 percent, to $2.42 during midday trading. The stock has traded between 79 cents and $12.50 during the past 52 weeks.

Crocs late Thursday said its first-quarter loss totaled 27 cents per share, matching analyst expectations. Revenue fell 32 percent to $134.9 million, but that was above the $114.4 million analysts polled by Thomson Reuters expected.

However, the company forecast a second-quarter loss of 15 cents to 31 cents per share, while analysts expect a loss of 17 cents per share.

Crocs has struggled to regain profitability as it faces falling sales on declining demand and fewer orders from retailers. It has cut jobs and production plants and hired a new chief executive, John Duerden, who began in March.

Crocs said in 2008 it took steps to better align its expense structure with lower sales volume and strengthen its balance sheet.

"Our intention in 2009 is to preserve the strength of the Crocs brand while endeavoring to strike a balance between lowering our fixed cost base and responsibly reducing our inventory," said Duerden, in a statement.

Wedbush Morgan analyst Jeff Mintz wrote in a note to investors that the company still needs to cut costs significantly to achieve profitability.

He lowered his 2009 earnings estimate to a loss of 78 cents per share from a loss of 75 cents per share and raised his 2010 estimate to 6 cents per share from a loss of 31 cents per share. Analysts expect a loss of 72 cents per share and 33 cents per share, respectively.

"Although we are raising our 2010 estimates in line with the company's expectation that that it will be profitable next year, we note that sales must stabilize and the company must continue its aggressive cost cutting to achieve our expectations," wrote Mintz, who rates the company "Hold." ''Over the next 12 months, we do not see significant potential for shares of Crocs, although short-term swings could continue to be significant."