Crocs’ revenue fall leads to share sell-off

Billy Bambrough
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Crocs has blamed its poor performance on a difficult trading environment and a slow turnaround in China (Source: Getty)

Crocs – the US maker of lightweight clogs – left investors wrong-footed yesterday after reporting a slide in sales and a disappointing outlook.

Revenue fell six per cent to $324m (£243m) from $345m a year ago, below the consensus estimate of $348m. Net income came in at $15.5m, or 13 cents a share, slightly higher than $13.4m a year earlier.

The company lowered its revenue forecasts to between $245m and $255m range, compared with $274.1m in the third quarter of 2015.

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For the full year, the company expects revenue to be down by low single digits, blamed on an increasingly “cautious retail environment” and slower turn around in China.

“Despite a decline in our revenue, I am encouraged by our strategic progress, which has enabled us to help mitigate the top-line pressure on profitability by delivering better-than-expected gross margins and managing expenses while reducing inventories,” said Crocs chief executive Gregg Ribatt.

“The global retail environment became more challenging as the second quarter progressed.”

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Headwinds were somewhat offset by a 2.9 per cent increase in the brand’s global direct-to-consumer comparable-store sales.