Crocs Q4 Loss Widens on Costs, But Beats Forecast

In What's New, Industry News by Jeff Prine

crocsNiwot, CO—Crocs Inc. today reported its fourth quarter loss widened thanks to one-time charges, but the loss and its sales still managed to beat estimates.

For the quarter ended Dec. 31, the footwear makers posted a loss of $66.9 million, or 76 cents a share, compared with $3.6 million, or 4 cents a share a year ago. Results included a $49.2 million non-recurring, unusual and infrequent charges. Excluding those one-time charges, adjusted net loss was $17.7 million or 20 cents a share which remained below the 22 cents a share loss analysts had expected.

Blackstone Investment a Plus

Net sales were up 1.6% to $228.7 million (up 4.1% on constant currency basis), surpassing the $221.24 million analysts had predicted. Gross margin narrowed to 45% from 46.5% a year ago.

“We delivered balanced performance in the fourth quarter despite the challenging retail environment in North America,” said John McCarvel, outgoing president/ceo. “On a constant currency basis, 2013 revenue grew by 4% for the quarter and 9% for the full year. The full-year revenue growth was driven by a solid 7% increase in wholesale revenue, with particular strength in Europe, as well as our global retail expansion.”

McCarvel, who intends to retire as president, chief executive and board member by April 30, also pointed out that the recent $200 million investment by Blackstone Group “is a vote of vote of confidence in our company and our brand, and we believe Crocs will benefit from Blackstone’s financial, consumer, retail and brand-building experience.”

Looking ahead, Crocs forecast first quarter revenue between $305 million and $315 million. Analysts estimate revenues of $322.37 million.

“As we look forward, 2014 will be a significant transition period for the company,” added Thomas Smach, Crocs chairman. “We will recruit a new CEO who will work with the reconstituted board to refine the company’s short-term and long-term strategic plans, which will include prioritizing earnings over top-line growth. We will focus on improving financial performance, particularly in the Americas and Japan, as well as enhancing our global retail execution.”


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