Caution Ahead After Crocs Reports Loss

LOS ANGELES — Analysts were somewhat puzzled by the optimistic tone Crocs struck after reporting fourth-quarter and full-year losses last week.

“I can’t imagine where they’re coming from,” said Sam Poser, an analyst at Sterne, Agee & Leach. “Clearly, their inventories are still too high — better than they were, but still too high. I’m just not sure what they’re seeing because business doesn’t seem to be getting better.”

Some industry observers also speculated about the brand’s future, given its absence from key trade shows this season, including WSA and Outdoor Retailer.

For its fourth quarter ended Dec. 31, 2008, the company reported a net loss of $33.2 million, or 40 cents per diluted share, compared with a profit of $38.3 million, or 45 cents, for the year-ago quarter. Sales during the quarter dropped 44 percent to $126.1 million from last year.

Looking ahead to the first quarter of 2009, the company said it anticipates a diluted loss per share of 17 cents to 32 cents on sales of $100 million to $135 million.

For his part, President and CEO Ron Snyder said he felt positive about the company’s future prospects.

“We are confident that our global brand equity remains strong and we continue to be optimistic about the long-term potential of our business,” he said in a statement. For the full year, the company reported a net loss of $183.6 million, or $2.22 a share, compared with a profit of $168.2 million, or $2, in 2007.

Crocs also said it reduced its inventory to $143.2 million from $248.4 million at the end of 2007. Most of that inventory reduction was the result of markdowns during the third quarter.

On Feb. 13, the company amended its revolving credit facility with Union Bank of California for the ninth time. Under the new agreement, the company agreed to make $1 million payments on set dates prior to March 27, 2009. In December, the company amended its credit agreement to limit its credit line to $22.4 million.

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