Crocs up in late trading after news
By Joyzelle Davis, Rocky Mountain News (Contact)
Published May 7, 2008 at 8 p.m.
Crocs on Wednesday affirmed its second-quarter and full-year guidance, sending the shoemaker's shares up 15 percent in after- hours trading.
Niwot-based Crocs, which fell in regular trading, forecast a profit of 45 cents to 50 cents a share, excluding charges, on revenue growth of 10 percent to 15 percent for the quarter ended June 30. For the full year, Crocs said it might earn as much as $1.80 a share, above the $1.69 estimate of analysts surveyed by Bloomberg.
Crocs' upbeat outlook indicated to investors that the worst could be over, after it announced last month that it might post a first-quarter loss because of sluggish consumer spending. Crocs on Wednesday did just that - swinging to a net loss of $4.5 million, or 5 cents a share, compared with a profit of $24.9 million, or 31 cents, a year earlier.
To cut costs, Crocs recently closed a plant in Quebec and laid off 27 workers in Colorado.
"At the current level, we feel that we're well-positioned with our staffing level," Crocs CEO Ron Snyder said in an interview after the company's earnings call.
Snyder said Crocs is seeing strong demand for some of its new styles, particularly its strappy 4-inch platform Cyprus sandal. The company also continues to ramp up its international sales, debuting in Russia later this year and expanding in China.
The company is scaling back its venture into apparel that includes its proprietary Croslite material, once considered an area of potential growth.
While Crocs will continue to offer the apparel at some department stores and company-owned stores, "we're refocusing on our footwear," Snyder said.
The company also plans to sharpen its message about escalator safety. Japan's Health Ministry last month called on Crocs to consider changing the design of its footwear after complaints that children wearing the soft-soled clogs have had their feet injured. Snyder said that improper maintenance and use of the escalator caused the accidents, not the shoes, but the company wants to make that clearer.
"We're looking at ways to improve consumer awareness and be proactive," he said.
Crocs Inc.
CROX: Nasdaq
$9.96
DOWN 6 cents
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