Crocs Back in Black

Now that Crocs Inc. has returned to full-year profitability, the firm is looking forward to hit $1 billion in annual sales by 2012.
And as it does so, the Niwot, Colo.-based maker of colorful resin clogs will move away from being known as just that.
“2010 was all about changing the consumer’s mindset away from one ugly clog. The main focus from a technology standpoint was really points of differentiation. Today we have so many great products in different forms and shapes and we have opportunities to expand the range further in 2011,” Crocs President and CEO John McCarvel told FN on Friday.
Crocs’ new products made up 31 percent of the firm’s sales in the fourth quarter, while core products represented 18 percent and classics comprised just 9 percent.
As at Dec. 31, 2010, backlog is up 57 percent, while accounts receivable rose 27 percent. And revenue for the first quarter of 2011 is up more than 25 percent on the fourth quarter of 2010, said McCarvel, while profit has increase 90 percent.

“If products sell well this year, [we could see] more than 25 percent [revenue] growth year-on-year, from about $789 million to about $986 million. Internally, we’re very upbeat on the new models, so I hope by 2012 [we can reach $1 billion],” McCarvel added.

Jim Duffy, analyst at Stifel Nicolaus, wrote in a research note that he expects Crocs’ full-year revenue to be $947 million in 2011 and $1.05 billion in 2012.
In 2011, Crocs plans to grow its brand within its existing network of sporting goods chains, specialty retailers, department stores and family footwear shops. It also is taking the brand to some new accounts this year, mostly smaller independents, the firm said. In addition, it is rolling out new collections, such as translucent sneakers, toning and winter boots, and planning to add 45 to 65 doors globally.

For the fourth quarter and fiscal year ended Dec. 31, Crocs saw strong increases in both the top and bottom lines, putting it back in the black for the first time since 2007.
For the quarter, net income was $4.7 million, or 5 cents a share, compared with a loss of $11.4 million, or 13 cents, in the same quarter a year ago.  Revenue increased 32 percent to $179.2 million, from $136 million.
Analysts were looking for earnings per share of 2 cents on revenue of $166 million, as polled by Yahoo Finance.
All regions posted strong increases in sales, with Europe leading the charge, surging 37 percent to $22.7 million. The Americas increased 36 percent to $94.1 million, while Asia advanced 24 percent to $62.4 million.
Sales also saw strong double-digit gains across the wholesale, retail and e-commerce segments. Gross profit margin strengthened to 48.2 percent, from 44.3 percent in the same quarter last year.
For the full year, net income was $67.7 million, or 76 cents a share, a reversal from a loss of $42.1 million, or 49 cents, in fiscal 2009. Total revenue increased 22 percent to $789.7 million.
Crocs’ liquidity also improved, as it ended the year with cash and cash equivalents of $145.6 million, nearly double last year’s $77.3 million.

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