The shares of Crocs Inc. took a hit in early-morning trading — down over 17 percent as of 9:55 a.m. ET — after the lightweight-clog maker posted Q2 results that missed market watchers’ expectations.
Crocs said its Q2 net income rose 21.1 percent, to $11.7 million, or 13 cents per diluted share, from $9.7 million, or 11 cents per diluted share in last year’s comparable period. But those results missed analysts’ expectations for diluted earnings per share of 18 cents.
Meanwhile, second-quarter revenues fell 6.3 percent year-over-year, to $323.8 million, missing market watchers’ estimates for revenues of $348.5 million. On a constant-currency basis, revenue slid 6.2 percent.
“Despite a decline in our revenue, I am encouraged by our strategic progress, which has enabled us to help mitigate the top-line pressure on profitability by delivering better-than-expected gross margins and managing expenses while reducing inventories,” Crocs CEO Gregg Ribatt said in a release.
“The global retail environment became more challenging as the second quarter progressed. This impacted our wholesale reorder opportunities and contributed to our sales shortfall relative to expectations.”
Those headwinds, the CEO noted, were partially offset by a 2.9 percent increase in the brand’s global direct-to-consumer comparable-store sales, “which is a positive indication that consumers are responding favorably to our new product line and enhanced marketing efforts.”
Looking ahead to Q3, Crocs predicts revenues in the $245 million-to-$255 million range, compared with $274.1 million in third quarter 2015. For the full year, the company expects revenue to be down by low single digits, reflecting a more “cautious retail environment and the slower turnaround in China.”
“We remain confident that we have successfully repositioned the business and built the platform to provide sustained growth and profitability over the long term,” Ribatt said.