Crocs, Inc. is revising its revenue and earnings guidance downward for the third quarter ended September 30, 2011. The company now expects revenue to be in the range of $273.0 to $275.0 million for the third quarter, an increase of approximately 27 percent over the $215.6 million of revenue reported in the third quarter last year. This compares to the company’s previous guidance for third quarter 2011 revenue of $280.0 million. For the third quarter 2011, the company now expects diluted earnings per share to be between 31 cents and 33 cents compared to its previous guidance of diluted earnings per share of 40 cents.
Company President and CEO John McCarvel stated: “Our business in Asia has continued to perform very well on the strength of our new product introductions. After a very positive response to our spring / summer 2011 product line in the Americas, we experienced some softness in our consumer direct channel in kiosk and outlet locations. Gross margins on a consolidated basis were slightly lower in the quarter than our initial expectations driven in part by lower direct sales as a percentage of total revenue.
“While we are disappointed with this guidance revision, we are very pleased with our year-to-date performance and believe that the Crocs brand has never been stronger,” continued Mr. McCarvel. “We remain focused on further penetrating new footwear categories and committed to building our market presence during the fall and holiday seasons. Looking ahead, based on current trends, we believe that fourth quarter revenue will grow in the low teen range on a percentage basis over the same period a year ago.”
The company also announced that its backlog at September 30, 2011 was approximately $297 million an increase of about 30 percent compared to the same period a year ago.
Mr. McCarvel concluded, “We are very pleased with the 30 percent increase in our wholesale backlog at the end of the third quarter which comes on top of a 37 percent increase a year ago. Building on recent product successes, we are expanding our translucent, Crocs chameleon, and sneaker collections as we head into Spring 2012. Impacted by macro economic headwinds in Europe, growth in our European business has slowed in Q3 and Q4 and is also evident in our spring/summer backlog for 2012. The solid backlog growth rate in Americas and Asia, provides key long-term building blocks to benefit from our increasing product breadth. In addition, our balance sheet remains healthy with record levels of cash and quarter end inventory levels that are projected to be down slightly on a sequential basis.”
