What To Expect When Crocs Reports Q2

Prince George Shoes Crocs
Crocs' kids' Crocbands shoes.
Courtesy of brand.

As lightweight clog maker Crocs Inc. continues its turnaround efforts, analysts are keeping a close eye on the brand’s momentum.

Maintaining a buy rating on the stock, CL King & Associates analyst Steve Marotta said he believes the brand’s turnaround initiatives are gaining traction, though the current retail climate “could be better.”

“While domestic retail-traffic problems created some headwinds in the second quarter, we do not believe it was out of bounds with the sole guidance provided,” Marotta wrote on July 18. “ … Bottom line, 1H16 [as a whole] was largely tracking with previous expectations.”

Market watchers expect Crocs — which will report second-quarter earnings on Wednesday — to see earnings per share shed 13 cents year-over-year, to 18 cents. Revenues are forecast to gain just under 1 percent year-over-year, to $348.46 million.

When Crocs reported earnings in May, the brand demonstrated that management’s efforts to rejuvenate slowing momentum were beginning to bear fruit.

While Crocs had posted a net loss of $2.4 million, or 8 cents per diluted share, for Q1 of the prior year, in Q1 2016, the firm’s net income soared to $10.1 million, or 7 cents per diluted share. Revenues also climbed 6.5 percent, to $279.1 million. Both results topped market watchers’ estimates.

“Given improved product, marketing and, critically, on-time deliveries, we believe Q2 results will be reported in line with expectations,” Marotta wrote. “We are expecting each of the three geographic regions to generate positive low-single-digit comps, with comprehensive Q2 revenue estimated at $346 million, flat with last year … our Q2 EPS estimate is 19 cents.”