Crocs Names New CEO Amid Struggling Sales

Crocs Inc. today produced another round of soft financial results that didn’t meet Wall Steet’s expectations. As it forges ahead with its turnaround efforts, the clogmaker said it is looking to streamline its organization — and to that end, it has named a new CEO.

Crocs CEO Gregg Ribatt will step down from his post on June 1, and Andrew Rees, who served as president of Crocs since 2014, will be become both president and CEO. Ribatt will continue to serve on the Niwot, Colo.-based brand’s board. 

During the fourth quarter, the company narrowed its net losses from $73.9 million, to $44.5 million, or 60 cents per diluted share. But analysts expected losses to narrow to 35 cents per diluted share.

Revenues also tumbled 10 percent, to $187.4 million in Q4, falling short of Wall Street’s bets for revenues of $189.4 million.

Ribatt said the company will continue to focus on its turnaround efforts and key operational improvements, including “expanding responsibilities for certain executive team members to better utilize their talents and leadership expertise.” (Specifically: Michelle Poole, SVP of global product and merchandising, is assuming responsibility for marketing. Ann Chan, SVP and GM of Europe, is transitioning to SVP and GM of Americas; David Thompson, SVP of AMEA, is also assuming responsibility for Europe.)

“In order to accelerate improved profitability, we have identified $75 to $85 million of annualized SG&A reductions that we expect will generate an annual $30 [million] to $35 million of improvement in earnings before interest and taxes by 2019,” Ribatt added. “Looking ahead, I am confident that these actions will pave the way for renewed growth and improved shareholder value.”

For the full year, Crocs reported revenues of $1 billion, a 5 percent decline on a constant currency basis. Net loses were $31.7 million, or a loss of 43 cents per share.

For fiscal year 2017, the company expects 2017 revenue to be flat compared to prior year.

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