Niwot, CO—Stung by currency impact in Japan and Russia, a later Easter and a shift in product mix, Crocs Inc. reported Tuesday afternoon that its first quarter profit fell 68% though sales edged up.
For the quarter ended March 31, the footwear company reported net income of 6.4 million, or 6 cents a hare, down from $28.9 million, or 33 cents a share, a year ago. Excluding certain one-time charges, adjusted earnings were 14 cents a share. Analysts’ average estimate expected 17 cents a share.
Net revenue edged up to $312.43 million compared to $311.66 million last year and beating analysts’ estimate for $311.01 million in sales.
“Revenues for our business globally in the quarter were in line with our expectations,” said outgoing CEO/President John McCarvel. “From a segment perspective, our Asia segment continued to deliver solid quarterly revenue growth across all channels and our Europe segment remained on the positive trajectory, which started late last year. We saw continued momentum in our non-clog portfolio during the quarter, as new collections like our Stretch Sole, with its patent-pending Fit2U Technology, and our Busy Day collection helped us further expand our brand into a casual footwear leader.”
Factors affected the company’s first quarter, however, included “the shift of the Easter holiday from March into April, negative currency impacts in Japan and Russia, and the change in product mix,” said Jeff Lasher, Crocs chief financial officer.
Also, Russia, which comprises 15% of European sales had a weakening of the ruble in mid-January, he noted.
The company, which recently received an investment fromm Blackstone Group, is in a period of transition, Lasher said. For instance, sales of its iconic clog styles are moving downward (42% of sales vs. 47% in first quarter last year.)
Looking ahead, Crocs projected second quarter sales between $370 million to $374 million. Analysts’ estimate calls for $377.37 million.
In related news, McCarvel retired on Wednesday and the board of directors is in the process of a search for his replacement. In the meantime, Thomas Smach, chairman of the board, will serve as interim chief executive officer.
“It has been an honor to be part of the Crocs global team for the past decade and to lead it since 2010,” McCarvel said. “We’ve made tremendous progress as a company over these past 10 years–from a one-season, one-shoe, and one-country brand to a diversified, four-season global footwear leader that is on solid financial footing.