US: Crocs shares slashed after profit downgrade
Shares in plastic clog manufacturer Crocs lost nearly half their value after the company admitted it might not make a profit in fiscal 2008.
The Colorado-based company is poised to suffer its first year of falling sales in 2008 since going public, hit by declining sales in the US and lower than predicted growth rates in international markets.
Crocs now expects second quarter revenues in the range of US$218-223m, well down on the previous projection of $247-258m. Diluted EPS is forecast at $0.03-0.07, compared to the previous forecast range of $0.42-0.47.
"For fiscal 2008, revenues are now expected to be down modestly compared to 2007 levels, with diluted earnings per share of approximately break-even," said the company.
It is also predicting third quarter revenues of $195-205m, and diluted EPS of $0.01-0.05.
"The domestic marketplace proved to be more challenging during the second quarter than we had originally anticipated," said Ron Snyder, Crocs president and CEO.
"While we did experience solid sell-through with many of our major accounts, retailers across the board were extremely cautious with their level of reorders, choosing to operate with leaner inventories versus a year ago."
He added that international markets were continuing to out-perform the US, with Asia up about 65% and Europe up about 13%, but admitted that this fell below the company's original predictions.
Earlier this week, Crocs launched a new campaign to promote safety on escalators and moving walkways, following publicity linking the company's distinctive plastic clogs to a number of entrapment incidents in the US and Japan.
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