Updated from 4/14/08
(CROX - Get Report)
, the Niwot, Colo., sandals maker, slashed its estimates for the first quarter and 2008, citing a slowdown in consumer spending.
Additionally, Crocs said it will close its Canadian manufacturing operations in order to consolidate its production at lower-cost company-owned and third-party facilities.
For the first quarter, Crocs expects revenue of $195 million to $200 million. Previously, it was looking for sales of $225 million. Crocs also no longer expects the profit of 46 cents a share it had predicted. Now, it says it will post a bottom line between break-even and a loss of 5 cents.
Excluding a charge related to shutting the Canadian business, Crocs is anticipating first-quarter earnings of 8 cents to 13 cents. The revenue forecast represents an increase of approximately 37% to 41% over the prior year, with domestic sales expected to rise 13%, European sales by roughly 90%, and Asia sales up about 75%.
Looking to the second quarter, revenue will likely climb 10% to 15% from the same period in the prior year, with earnings of 42 cents to 47 cents. Taking out continuing costs for the shutdown in Canada, profits should be 45 cents to 50 cents.
As for the full year, Crocs believes it will earn $1.70 to $1.80 a share, excluding the effects of the charge, with revenue up 15% to 20% over 2007. On average, analysts surveyed by Thomson Financial are looking for earnings of 45 cents in the first quarter, 79 cents in the second quarter and $2.63 for the year.
"The retail environment in the U.S. has become increasingly challenging as consumer spending and traffic levels have slowed," said Ron Snyder, president and CEO of Crocs, in a prepared statement Monday. "Despite general weakness across the industry, we continue to witness solid sell-through of our Crocs-branded footwear and still expect domestic sales to still grow roughly 13% during the quarter. However, retailers in general are planning more cautiously, and therefore, we did not experience the level of at once business we originally expected. In addition, because of our current expense structure, a shortfall in sales versus our expectations disproportionately impacts our earnings results."
Crocs also said its board authorized a stock buyback covering up to an additional 5 million shares.
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