Crocs Inc. reported earnings slumped 71.1 percent in the third quarter, to $13.0 million or 15 cents per share, compared with net income of $45.1 million, or 49 cents, in the prior year period. Revenue slid 2.4 percent to $288.5
million compared with revenue of $295.6 million. On a constant currency basis revenue increased 0.9 percent for the third quarter of 2013.
Third Quarter 2013 Highlights:
- Revenue of $288.5 million
- Gross Margin of 53.2 percent
- Net income of $13.0 million
- Earnings per diluted share of $0.15
- Non-GAAP adjusted net income1 per diluted share of $0.18
- Global cash balance increased by $43.1 million in the quarter
“During the third quarter we saw strong performance in our Asia Pacific region and marked improvement in all channels of our European business,” said John McCarvel, president and CEO. “This positive performance was counterbalanced by weakness in the Americas and Japan where all sales channels performed below our expectations. The underperformance was especially acute in the Americas where we were impacted by wholesale accounts trimming at once orders to remain lean on inventory coupled with weak consumer confidence affecting our consumer-direct performance.”
Share Repurchase Authorization
On October 29, 2013, the company's board of directors approved the repurchase of up to an additional 15.0 million shares under the company's existing stock repurchase authorization. This brings the total shares available for repurchase by the company under the existing authorization to approximately 17.8 million shares, or approximately 20 percent of the common outstanding shares at September 30, 2013. The number, price and timing of repurchases will be at the company's sole discretion and will be evaluated depending on market conditions, liquidity needs or other factors. The company's board of directors may suspend, modify or terminate the program at any time without prior notice.
Third Quarter Results
Revenue for the third quarter of 2013 was $288.5 million compared with revenue of $295.6 million reported in the third quarter of 2012. On a constant currency basis revenue increased 0.9 percent for the third quarter of 2013.
For third quarter of 2013, the company had net income of $13.0 million or $0.15 per diluted share, compared with net income of $45.1 million or $0.49 per diluted share in the prior year period.
Adjusting for the impact of the $3.1 million relating to the implementation of a new ERP system including non-cash accelerated depreciation and cash expenses for program management, training and other non-capitalized costs, the company had Non-GAAP adjusted net income of $16.1 million in the quarter or $0.18 per diluted share.
Margins
Gross profit for the third quarter of 2013 was $153.6 million, or 53.2% as a percentage of sales, compared with $160.7 million, or 54.4% as a percentage of sales in the prior year period. The year- over-year decrease in gross profit as a percentage of sales was primarily related to lower wholesale and internet revenue in the Americas and Japan. Selling, General & Administrative (“SG&A”) expenses increased 12.4% to $135.7 million compared with $120.7 million a year ago, due primarily to increases in retail store space, marketing expenses, and the company's ERP project. As a percentage of sales, SG&A increased to 47.0% compared with 40.8% in the third quarter of 2012.
|
(1) |
Non-GAAP adjusted net |
Revenue Results Channel and Regional
The following tables detail the company's three and nine months 2013 and 2012 revenues:
|
Three Months Ended September 30, |
Change |
Constant Currency Change(1) |
||||||||||||||||
|
($ thousands) |
2013 |
2012 |
$ |
% |
$ |
% |
||||||||||||
|
Channel revenues: |
||||||||||||||||||
|
Wholesale: |
||||||||||||||||||
|
Americas |
$ |
45,134 |
$ |
56,445 |
$ |
(11,311) |
(20.0) |
% |
$ |
(10,504) |
(18.6) |
% |
||||||
|
Asia Pacific |
43,268 |
42,291 |
977 |
2.3 |
1,352 |
3.2 |
||||||||||||
|
Japan |
24,536 |
34,685 |
(10,149) |
(29.3) |
(3,807) |
(11.0) |
||||||||||||
|
Europe |
27,414 |
22,667 |
4,747 |
20.9 |
3,463 |
15.3 |
||||||||||||
|
Other businesses |
37 |
161 |
(124) |
(77.0) |
(118) |
(73.3) |
||||||||||||
|
Total Wholesale |
140,389 |
156,249 |
(15,860) |
(10.2) |
(9,614) |
(6.2) |
||||||||||||
|
Consumer-direct: |
||||||||||||||||||
|
Retail: |
||||||||||||||||||
|
Americas |
59,839 |
58,798 |
1,041 |
1.8 |
1,369 |
2.3 |
||||||||||||
|
Asia Pacific |
33,469 |
28,549 |
4,920 |
17.2 |
5,013 |
17.6 |
||||||||||||
|
Japan |
12,397 |
13,277 |
(880) |
(6.6) |
2,285 |
17.2 |
||||||||||||
|
Europe |
18,995 |
11,550 |
7,445 |
64.5 |
6,985 |
60.5 |
||||||||||||
|
Total Retail |
124,700 |
112,174 |
12,526 |
11.2 |
15,652 |
14.0 |
||||||||||||
|
Internet: |
||||||||||||||||||
|
Americas |
11,221 |
16,705 |
(5,484) |
(32.8) |
(5,414) |
(32.4) |
||||||||||||
|
Asia Pacific |
2,669 |
2,124 |
545 |
25.7 |
573 |
|||||||||||||
