Crocs Inc. reported sales slumped 6.3 percent in the second quarter to $323.8 million compared to the three months ended June 30, 2015. On a constant currency basis, revenue decreased 6.2 percent.

Sales came in short of guidance calling for sales in the range of $340 million to $350 million.

Net income attributable to common stockholders on a GAAP basis increased 21.1 percent to $11.7 million, or $0.13 per diluted share, compared to the three months ended June 30, 2015.

Gregg Ribatt, CEO, said, “Despite a decline in our revenue, I am encouraged by our strategic progress, which has enabled us to help mitigate the top-line pressure on profitability by delivering better than expected gross margins and managing expenses while reducing inventories. The global retail environment became more challenging as the second quarter progressed. This impacted our wholesale reorder opportunities and contributed to our sales shortfall relative to expectations. These headwinds were partially offset by a 2.9 percent increase in global direct-to-consumer comparable store sales, which is a positive indication that consumers are responding favorably to our new product line and enhanced marketing efforts. We remain confident that we have successfully re-positioned the business and built the platform to provide sustained growth and profitability over the long term.”

Second Quarter Operating Results

In the second quarter of 2016, the company reported GAAP net income attributable to common stockholders of $11.7 million or $0.13 per diluted share, compared with net income attributable to common stockholders of $9.7 million or $0.11 per diluted share in the same quarter of the prior year.

As outlined in detail in the non-GAAP reconciliations, the company recorded net charges of $0.3 million unrelated to core business in the three months ended June 30, 2016, compared with $17.6 million in the three months ended June 30, 2015. Excluding these items, the company reported, on a comparable basis, non-GAAP adjusted net income attributable to common shareholders of $12.0 million in the three months ended June 30, 2016, versus non-GAAP adjusted net income attributable to common shareholders of $27.3 million in the three months ended June 30, 2015.

For the three months ended June 30, 2016, the company had 73.4 million weighted average common shares outstanding and 74.2 million diluted shares outstanding. The company did not repurchase any shares during the three months ended June 30, 2016.

Balance Sheet

Cash and cash equivalents as of June 30, 2016 were $146.7 million compared with $143.3 million as of December 31, 2015. Inventory was $169.9 million as of June 30, 2016 compared to $168.2 million as of December 31, 2015.

Financial Outlook

The company expects third quarter 2016 revenue in the $245.0 million to $255.0 million range, compared to $274.1 million in the third quarter 2015. For the full year, the company expects revenue to be down low single digits compared to the year ended December 31, 2015. This guidance reflects the more cautious retail environment and the slower turnaround in China.