Niwot, CO—Citing weaker-than-expected wholesale and direct-to-consumer sales, Crocs Inc. said Tuesday it would lower its third quarter forecast from previous forecasts that were below analysts’ expectations.
While the footwear company said its margins are in line with last year, orders in its wholesale division in the Americas as well as sales to consumers were below prior expectations.
Crocs now expects third quarter earnings between 15 cents to 18 cents a share, down its previous estimate for 20 cents to 23 cents a share. Sales are now expected at $285 million to $295 million, down from its previous $300 million to $310 million.
Analysts’ average estimate expects Crocs to earn 23 cents a share on sales of $305.08 million.
Crocs Steps into Fashion with ‘Curatorial Footwear’
“While revenue for the third quarter of 2013 is coming in below our prior forecasted outlook because of lower than expected revenue in the Americas region, we are very satisfied to date with our Asia Pacific and Europe retail sales performance in the quarter,” said John McCarvel, president/ceo.
In July, Crocs reported a second quarter profit nearly half that of 2012 due to higher expenses and lower gross margins cause by increased discounting in the Americas and Europe.
Net income for the second quarter was $35.36 million, or 40 cents a share, down from $61.52 million, or 68 cents a share in the prior-year quarter. Net revenue grew 10%, or 12.5 percent in constant currency, to $363.83 million.
The company also plans to use $80 million to $100 million of its capital allocation to finance stock buybacks or strategic investments.
Crocs is also looking to expand its footwear offerings beyond the iconic Croslite clogs and casual styles into more fashion forward offerings.
The company partnered with Soldier, a branding agency, to create the “Curatorial Footwear” collection, for “women that love modern art expression and fashion that comes from it.”
Designed by Stefano Furiani from Italy, this Curatorial Footwear combines “elegance, comfort, and style to make a bold shoe for the ambitious and creative enthusiast.” Styles, which retail between $80 to $120, are made with the brand’s TPU-made uppers and Croslite footbeds but in fashion styles such as high heels, wedges, ballet slippers etc.
The Curatorial shoes look so different in fact, they won’t be marketed through Crocs stores or online. Instead, they will be offered through more traditional fashion footwear retailers such as Zappos etc.