Crocs Inc. is the latest victim of the sluggish retail environment in North America.
The Niwot, Colo.-based firm posted a net loss of $66.9 million, or 76 cents a diluted share, in the fourth quarter, including $49.2 million in nonrecurring, unusual and infrequent charges. This compares with the prior year’s net loss of $3.6 million, or four cents.
Excluding one-off items, the company’s adjusted net loss was $17.7 million, or 20 cents a share, slightly better than Wall Street’s consensus forecast for a loss of 22 cents.
For the fourth quarter, revenue rose 1.6 percent to $228.7 million, beating analysts’ consensus forecasts of $221.2 million. On a constant currency basis, revenue gained 4.1 percent.
Despite the weak earnings result, shares of the former market darling rose more than 5 percent in morning trading on Thursday due to a positive outlook for 2014 and an update on the firm’s search for a new CEO.
“It wasn’t totally a surprise that earnings came in a little bit soft. And since the company is undergoing a CEO change, the fact that the backlog is up 7 percent is an indicator that they should be able to grow their wholesale business in 2014,” said BB&T Capital Markets analyst Scott Krasik.
Crocs Chairman Thomas Smach said in a release that the company is on the prowl for a new leader — current president and CEO John McCarvel is expected to depart in April — as part of its efforts to spur earnings growth in the Americas and Japan.
McCarvel said the challenged retail environment in the U.S. impacted sales in the fourth quarter. But he noted the recent $200 million lifeline from private equity heavyweight Blackstone Group LP should benefit Crocs over the long term as the company adjusts its strategy.
“The recent investment in Crocs by Blackstone is a vote of confidence in our company and our brand, and we believe Crocs will benefit from Blackstone’s financial, consumer, retail and brand-building experience,” McCarvel said in the statement.
For the full year, Crocs generated earnings of $10.4 million, or 12 cents a diluted share, compared with income of $131.3 million, or $1.44, in 2012.
The company forecast revenues of between $305 million and $315 million in the first quarter of fiscal 2014.
Additionally, Crocs said it will begin to buy back stock in the first quarter, citing its previously announced $350 million stock repurchase program.