Although the company topped fourth-quarter sales forecasts, shares for Crocs Inc. are taking a beating today after it offered up a full-year outlook that was weaker than investors had expected.
As of 10:45 a.m. ET, the stock remained down more than 13 percent to $12.23.
Despite recent unevenness, the lightweight-clog maker posted a fourth-quarter sales gain of 6.2 percent to $199.1 million, besting analysts’ forecasts for sales of $195 million. It also narrowed its net losses to $28.3 million, or 41 cents per diluted share, from a loss of $44.5 million, or 60 cents per diluted share, in the same period last year. Still, it was greater than market watchers’ forecast for a diluted loss per share of 33 cents.
After announcing plans to close nearly 160 stores last year amid dimming momentum, investors have been eager to see whether the brand’s turnaround initiatives would stick and ultimately spur long-term growth. However, Crocs today predicted that its sales for fiscal year 2018 would be relatively flat to the prior year and negatively impacted by $60 million stemming from business model changes and store closures. It also called for Q1 revenues to land between $265 and $275 million, compared with $267.9 million in the first quarter of 2017.
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Nevertheless, Crocs president and CEO Andrew Rees was upbeat on a call with investors this morning — noting that he sees potential in the brand’s strategy and that developments throughout 2017 evidence its progress.
“Throughout 2017, our ongoing initiatives resulted in improved product, more impactful marketing and a stronger brand,” Rees said, characterizing the year as “highly productive.”
He added, “We centralized our focus around three strategic objectives: Firstly, simplifying our business to reduce costs; secondly, improving the quality of our revenues; and thirdly, positioning ourselves to drive sustainable profitable growth.”
Crocs’ chief also announced that the brand recently entered into a new agreement with Swire Resources, a subsidiary of Swire Pacific in Hong Kong, which will take over its wholesale and retail businesses in the region.