Crocs Expands Dealers to Triple Sales and Profits…

Crocs Inc. hosted its first official conference call as a public company with triple-digit growth in sales and earnings. During a conference call with analysts and the media, some analysts were cheering as they congratulated the management team. The company grew its door count by 900 since the last quarter to a total of 7300 doors.

Roughly 55% of these doors were from existing customers while the remainder were new accounts in the action sports channel, department stores, children’s footwear shops, and maternity shops. The company has avoided the mass and discount channel to date, but management said that some of their new styles are designed to address this distribution. In addition, some new styles are designed to cater to the up-market retailer exclusively.

Margins slipped during the quarter due to air-freighted inventory that was received during Q4 and shipped to retailers during the first quarter. Some of this inventory will also impact margins in Q2, but should be gone by the beginning of the back half. Margins were also negatively impacted by additional packaging requirements from larger accounts that were opened up during the quarter like Nordstrom and Dillard’s. Crocs is currently operating production facilities in North America, Mexico, and Europe with a capacity of 2.0 to 2.2 million pairs.

Crocs anticipates 2006 revenues to be in the range of $200 million to $205 million and net income per diluted common share for fiscal 2006 to range from 77 cents to 79 cents. For the second quarter revenues should be in the range of $53 to $55 million while net income per diluted common share to range from 21 cents to 22 cents.

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