Crocs’ Q1 Earnings Soar

Analysts are bullish on Crocs Inc.’s ability to accelerate backlogs going into the back half.

Sam Poser of Sterne Agee said “60 percent of first quarter orders shipped in late March, so the true selling season is just commencing, as weather is finally beginning to cooperate.”

He also expects new offerings for both spring and fall to “gain traction at retail and command a higher average selling price, which should help to lift margins and more than offset rising product costs.”

“With the 30 percent year-over-year increase in second half backlog, we have growing confidence in the company’s ability to sustain 20 percent or better growth into the back half,” said Stifel Nicolaus analyst Jim Duffy.

According to Crocs’ president and CEO John McCarvel, the firm’s momentum in sales is thanks to “consumers moving so far past the ugly clog and they’re voting on new styles. We continue to focus really on designing and building, really state of the art fun lifestyle products that go to the essence of color and comfort. And that’s where the main focus is.”

McCarvel told FN that as part of the move to be “a much larger lifestyle brand,” the firm is considering signing licensing agreements for more accessories beyond its current assortment of tchotchkes — and even apparel.

“It’s in the exploratory stage, and the earliest we would start to see something happen would be for the spring-summer 2012 season,” McCarvel said.

Crocs first quarter profit more than tripled, thanks to strong consumer demand and the company’s new four-season business model.

For the period ended March 31, the Niwot, Colo.-based firm earned a net income of $21.5 million, or 24 cents a share, more than three times its net income of $5.7 million, or 7 cents, in the first quarter of 2010.

Total revenue grew 36 percent to $226.7 million, from $166.9 million, on the back of broad-based increases in wholesale, retail and Internet sales, which all rose by a third.

The bottom line benefited from a 620 basis-point drop in expenses to 40.1 percent, as well as fewer asset impairments and no restructuring charges. Gross profit margin inched up 60 basis points to 52.6 percent from the previous year.

Crocs also doubled its cash balance, ending the quarter with $115.5 million in cash and cash equivalents. The firm expects second-quarter earnings per share to be 16 percent higher, at 43 cents, and revenue to rise 23 percent to $280 million.

Crocs also announced Thursday the appointment of Jeff Lasher as CFO, effective immediately.

A Colorado resident for more than 10 years, Lasher has served as Crocs’ principal accounting officer and interim principal financial officer since January 2011, and as its corporate controller since June 2009.

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