Niche footwear company Crocs saw its second quarter profits slashed amid tumbling domestic sales of its distinctive rubber clogs.

Revenues for the period ended 30 June edged down 0.7% to US$222.8m, with international sales growth of 20% cancelling out a similar decline in domestic revenues.

Gross profit fell to $90.3m from $131.9m a year ago, and net profit plummeted to $2.1m from $48.5m in 2007.

Crocs president and CEO Ron Snyder admitted that the second quarter had been "challenging", thanks to the difficult macroeconomic environment and lower than expected demand in certain markets.

"Over the near term, we are focused on further reducing our expenses in order to exit this year with a leaner infrastructure while at the same time strategically increasing the retail presence and consumer awareness of our more recent product introductions," he said.

"Longer term, we are developing more comprehensive lines of footwear under specific category segments and implementing a more disciplined distribution strategy in order to reinvigorate our top line."

Crocs maintained its full-year guidance of a slight drop in annual revenues, and approximately break-even earnings per share, including a charge of $20m associated with the closure of the company's Canadian manufacturing operations.

It expects third quarter revenues of $195-205m and diluted EPS of $0.01-0.05.