Earnings Preview: Crocs

Crocs (CROX) is expected to report Q2 earnings after market close Thursday, August 7, with a conference call scheduled for 4:45 p.m. ET.

Guidance

Analysts are looking for a profit of 5c on revenue of $219.73M. The consensus range is 4c to 8c for EPS, and revenue of $214.2M to $222.64M, according to First Call. Crocs lowered its guidance in July due to the "challenging" domestic marketplace. The company now expects Q2 EPS 3c to 7c vs. prior guidance of 42c to 47c and sales of $218M to $223M vs. previous guidance of $247M to $258M. Crocs also forecast Q3 EPS 1c to 5c vs. First Call consensus of 3c and revenues of $195M to $205M vs. First Call consensus of $282.29M.

The company expects 2008 revenues to be down modestly from 2007 levels with EPS approximately break-even vs. First Call consensus of 15c. Crocs CEO Ron Snyder said that the adjustment was due to retailers reordering less than expected. While Crocs said its international markets performed better than its domestic business, those markets also performed below the company's expectations.

Analyst Views

Piper responded to the news by downgrading Crocs to Neutral from Buy, while Baird, which said that the company's "meteoric rise" has been followed by an equally dramatic fall, dropped the company to Neutral from Outperform.

Crocs executives have said that their new products are selling well, but the company is being diligent about managing inventories in the weakening U.S. economy, where customers are less likely to spend on non-essential items.

Comments

[John Pseudonym:]

The Crocs Island at the local high $$$ mall has closed...that's all I need to know about this company.

2008 Aug 06 03:49 PM

[DM226:]

Who bought those god awful shoes to begin with?

2008 Aug 06 04:44 PM

[Wez:]

I'm confused, is this article making a case for or against the purchase of CROX? Does anybody think this company will survive still? Excuse me, I need to go buy more puts on this turd....

2008 Aug 07 12:31 AM

[jbde:]

Alll you need to do is watch the change in the short position to be reported in 2 weeks. If the shorts covered, then they think they got all they could out of it. Risk to the shorts is, that despite the core products, the new products in shoes and apparel are selling. The features of support, comfort and odor resistance are compelling still. Watch for Crox to license its Croslite to other shoe manufacturers - a whole new game. It can also be woven as fabric - into armpits of clothing for example.

2008 Aug 07 08:22 AM

[Dennis Trig...:]

Who buys Crocs? I did and many other in Las Vegas. I got mine at Birkenstock and Whole Foods has prominent displays.

A very stylish lady was wearing them yesterday at the Las Vegas Athletic Club.

Crocs has a loyal following like wearers of SAS shoes.

Adidas, Nike, Brown Shoe, Kenneth Cole and private equity firms are likely buyers of the company.

2008 Aug 07 09:08 AM

[wilber:]

I don't know why anybody who cares about their appearance would wear Croc's outside the house. Horrible, skanky, looking shoes.

2008 Aug 07 11:37 AM

[anopenmind:]

Most analysts and investors seem fixated with the colored things with holes, which could well-be fading in favor. How about Croc's future? What is of top value? Innovation. Mgt is not the best at speaking to the public, but my oh my, have we ever seen a company that justs keeping banging away with innovative products? A smaller, but innovative company, profitable company? Sounds like a good investment.

2008 Aug 07 12:02 PM

[He who walk...:]

Check out these links on USITC and there decision on crocs infringment claims!!!
Crocs is over... Thess documents will tell you that. Crocs is nothing more then a copy of a already known shoemodel. There is nothing unique about it. Not even the strap...

Summary:
www.usitc.gov/secretar...

Details:
edisweb.usitc.gov/edis...

2008 Aug 07 12:22 PM

[Richard Shi...:]

Crocs are kids shoes. Kids love them. My 1 year old son got a pair today, my 3 year old daughter absolutely loves hers. They wash off very easily, parents love them for that reason. Any sales to adults are a bonus. Crocs gets bought and becomes a "line" for Nike.

2008 Aug 08 12:01 AM