As lightweight clog maker Crocs Inc. continues its turnaround efforts, analysts are keeping a close eye on the brand’s momentum.
Maintaining a buy rating on the stock, CL King & Associates analyst Steve Marotta said he believes the brand’s turnaround initiatives are gaining traction, though the current retail climate “could be better.”
“While domestic retail-traffic problems created some headwinds in the second quarter, we do not believe it was out of bounds with the sole guidance provided,” Marotta wrote on July 18. “ … Bottom line, 1H16 [as a whole] was largely tracking with previous expectations.”
Market watchers expect Crocs — which will report second-quarter earnings on Wednesday — to see earnings per share shed 13 cents year-over-year, to 18 cents. Revenues are forecast to gain just under 1 percent year-over-year, to $348.46 million.
When Crocs reported earnings in May, the brand demonstrated that management’s efforts to rejuvenate slowing momentum were beginning to bear fruit.
While Crocs had posted a net loss of $2.4 million, or 8 cents per diluted share, for Q1 of the prior year, in Q1 2016, the firm’s net income soared to $10.1 million, or 7 cents per diluted share. Revenues also climbed 6.5 percent, to $279.1 million. Both results topped market watchers’ estimates.
“Given improved product, marketing and, critically, on-time deliveries, we believe Q2 results will be reported in line with expectations,” Marotta wrote. “We are expecting each of the three geographic regions to generate positive low-single-digit comps, with comprehensive Q2 revenue estimated at $346 million, flat with last year … our Q2 EPS estimate is 19 cents.”