Crocs Inc. reported mixed results for it’s second quarter, hitting revenue expectations but missing on profit.
It’s been a big uphill fight for Crocs over the past several quarters. The company, which had steadily lost market share in the U.S., announced a new strategic plan to turnaround the business and get back on the path for growth last year. Despite rallying briefly in pre-market trading, share prices fell 4.5 percent before the market opened.
Net Income: For the quarter ending June 30, net income was $13.4 million. It was a sharp decline compared to the year ago period when net income was $23.3 million.
EPS: Earnings per diluted share were 11 cents, compared to 19 cents in the year ago period.
Revenue: For the quarter, Crocs reported revenue of $345.7 million. It was an 8. 2 percent decline compared to the year ago period when Crocs reported revenue of $376,920. On a currency neutral basis, it was a 1.1 percent decline.
Hit, Miss or Beat: Crocs’s revenue results hit expectations for analysts polled by Yahoo Finance, but the company missed on analyst EPS predictions. Market watchers had said the company would report EPS of 26 cents.
Executive Insights: ” Our business continues to stabilize around the globe and we believe the strategy the company outlined last July is positioning Crocs for sustained success in the future. We were particularly pleased to see global e-commerce revenue increase nearly 30% on a constant currency basis. The company continues to make meaningful progress in implementing our strategy including: strengthening our brand; elevating our product stories; evolving our international business to focus on our six core markets; strengthening our relationships with key wholesale partners; improving our direct to consumer capabilities; simplifying our business model; and, building a best in class team. We are confident that these moves are laying the foundation to position the company for sustained growth in the future.” Gregg Ribatt, CEO, said in a statement.
Ribatt continued: “We are confident that the strategic shift to focus the organization on a narrower range of businesses, fewer retail stores and reduced geographic footprint will lead to improved results in the future. We invested an incremental $15 million in marketing in Q2 2015 compared to 2014 to build brand awareness. We increased reserves for doubtful accounts by $5 million on our balance sheet at the end of the second quarter while reducing inventory and global accounts receivables compared to last year at June 30th.”
Looking Ahead: For Q3 the company expects revenue to range $280 to $290 million, compared to the year ago quarter when the firm reported $302 million. The revised revenue expectations are less than analyst predictions of $293.9 million.