This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Crocs Offers Ugly Forecast

Updated from 4/14/08



Crocs (CROX), 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.

Why Crocs Got Skinned

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.

Know What You Own: CROX operates in the apparel and footwear industry, and some of the other stocks in its field include Deckers Outdoor (DECK), Nike (NKE) and Timberland (TBL). These stocks were recently trading at $109.14, -2.06%, $65.94, -0.18% and $13.12, -1.58% respectively. For more on the value of knowing what you own, visit TheStreet.com's Investing A-to-Z section.

This article was written by a staff member of TheStreet.com.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,805.41 +127.51 0.76%
S&P 500 1,964.58 +13.76 0.71%
NASDAQ 4,483.7150 +30.9230 0.69%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs