Crocs Inc. reported a loss of $53.1 million, or 70 cents a share, in the fourth quarter. Revenues declined 9.7 percent to $206.5 million, in line with expectations.
GAAP net loss attributable to common stockholders was $56.9 million or $0.70 per diluted share, compared with a net loss of $66.9 million or $0.76 per diluted share in the same quarter of the prior year.
The company recorded $26.8 million in non-recurring and special charges, including $15.3 million of non-cash charges, in the fourth quarter of 2014; compared with $49.2 million in non-recurring and special charges (of which $46.5 million were non-cash charges) in the fourth quarter of 2013.
Excluding these items, the company reported a non-GAAP adjusted net loss attributable to common stockholders of $30.0 million in the quarter or compared with a non-GAAP adjusted net loss of $17.7 million in the fourth quarter of 2013.
Full year 2014 operating results
The company generated net loss attributable to common stockholders of $19.0 million or $0.22 per diluted share for the full year ended 2014, compared with net income of $10.4 million or $0.12 per diluted share in 2013.
The company recorded $69 million in non-recurring and special charges, including $27.7 million in non-cash charges, for the year ended 2014; compared with $62.4 million in non-recurring and special charges (of which $49.3 million were non-cash charges) for the full year 2013.
Excluding these items, the company generated non-GAAP adjusted net income attributable to common stockholders of $50.0 million for the year ended 2014 compared with non-GAAP adjusted net income of $72.8 million during 2013.
Cash and cash equivalents at Dec. 31, 2014, amounted to $267.5 million. Inventory was $171.0 million at the end of 2014 compared with $162.3 million on December 31, 2013.
“We delivered fourth quarter sales in line with expectations,” said CEO Gregg Ribatt. “Our business was essentially flat to last year, on a constant currency basis across all regions including the Americas, Europe, Japan and Asia with the exception of Latin America and China.”
Ribatt said the company has made meaningful progress on implementing a strategy it outlined last July that calls for:
- strengthening the brand;
- elevating product stories while eliminating non-core categories;
- evolving international business to focus on six core markets while building best-in-class partnerships in the rest of the world;
- strengthening relationships with key wholesale partners;
- improving direct-to-consumer capabilities;
- simplifying Crocs business model; and,
- building a best in class team.
In the second half of 2014, for instance, Crocs eliminated non-core product categories, closed more than 100 stores, reduced headcount, and simplified its international operations.
“We are confident these moves will enable us to streamline our business model, focus on our biggest and most meaningful opportunities, and position the company for growth in the future,” Ribatt said.
Ribatt said 2015 will be a transition period for the company.
“Our business continues to stabilize across all of our regions while we address the continuing challenges of the stronger US dollar and our China business,” he said. “We expect Q1 revenues to be down on a constant currency basis by 10 percent to 12 percent, to a range of $260 to $265 million, driven primarily by declines in our China business. We expect the declines to moderate substantially in Q2 and growth to return in the second half of 2015 as many of the strategic changes we implemented in late 2014 positively impact the business.”
The company repurchased 10.6 million shares of common stock in 2014 of which 4.5 million shares were repurchased in the fourth quarter of 2014 at an average price of $12.38. The company ended the year at 78.5 million common shares outstanding and fourth quarter weighted average shares outstanding was 80.9 million.