LOS ANGELES – Shares of Crocs Inc lost about half of their value Thursday after the shoemaker slashed second-quarter and 2008 profit and revenue forecasts on an unexpected slowdown in business and weak reorders.
Shares in the maker of brightly colored casual shoes, which had topped $75 in October, dropped to $4.75 in extended trade from a Nasdaq close of $8.95.
Crocs shares have been volatile this year as investors worried about its high inventory levels, which are liability in an economic downturn. Chief Executive Ron Snyder said in a statement that retailers across the board were “extremely cautious” with reorders and that overseas performance was weaker than expected.
“The domestic marketplace proved to be more challenging during the second quarter than we had originally anticipated,” Snyder said.
For the second quarter, Crocs now sees revenue of $218 million to $223 million and diluted earnings per share of 3 cents to 7 cents, including a 1 cent-per-share charge related to the shutdown of its Canadian manufacturing operations.
In May, the company had forecast second-quarter revenue of $247 million to $258 million and diluted earnings per share of 42 cents to 47 cents, which included the charge associated with the shutdown of the Canadian manufacturing operations.
Despite lower revenue expectations for the second quarter, Crocs said it still expected inventories as of June 30 to decrease 10 percent to 15 percent from $266 million in the first quarter.
The company also said receivable days sales outstanding were expected to improve 20 percent to 25 percent compared with March 31. Crocs now expects 2008 revenue to be down modestly from last year's level. It also sees earnings per share at break even, including a total pretax charge of 16 cents per diluted share associated with the Canadian manufacturing shutdown.
In May, its 2008 forecast called for revenue growth of 15 percent to 20 percent and earnings per share of $1.54 to $1.64, including charges related to closing the Canadian operations.
The company Thursday also forecast revenue of $195 million to $205 million and diluted earnings per share of 1 cent to 5 cents.
(Reporting by Lisa Baertlein; Editing by Gary Hill, Braden Reddall, Leslie Gevirtz)
