Crocs reported its revenues for the second quarter decreased to $222.8 million in the three months ended June 30, 2008, from $224.3 million in the three months ended June 30, 2007. The period over period decline is attributable to a significant decrease in revenues in the North American market, offset by increases in revenues in certain other regions. Crocs attributes this decline to economic conditions in the United States; namely reduced consumer spending and decreased foot traffic at shopping malls. Additionally, Crocs cites challenges it faces in merchandising its expanded product lines in existing wholesale channels as well as the maturity of core products in the consumer market and lessening demand for such product.


The majority of revenues during the three months ended June 30, 2008 were attributable to non-classic footwear models, while sales of classic models, Beach and Cayman, represented 26.4% of total revenues compared to 35.0% in three months ended June 30, 2007. Sales of new 2008 footwear product lines represented approximately 20.9% of overall revenues for the three months ending June 30, 2008. Crocs says it intends to continue to diversify its product offering in order to expand the brand.


Company-owned retail locations, including retail stores, kiosks and outlets, increased to 249 locations at June 30, 2008, which is up from 157 at June 30, 2007. Total revenue from company-owned retail locations was $36.8 million in the three months ended June 30, 2008, compared to $18.6 million in the three months ended June 30, 2007. Crocs expects revenues from its company-owned retail stores to increase in the future as it continues to increase the number of its retail locations.


North American revenues decreased 24.2%, or $32.8 million, to $102.8 million in the three months ended June 30, 2008 compared to $135.6 million in the three months ended June 30, 2007. Again, Crocs believes the decline reflects economic conditions in the United States; namely reduced consumer spending and decreased foot traffic at shopping malls. Crocs also experienced an increase in sales returns and allowances of $4.5 million, or 145%, to $7.7 million in the three months ended June 30, 2008 from $3.2 million in the three months ended June 30, 2007.


Crocs increased the number of company-owned retail locations in North America, including retail stores, kiosks and outlets, to 147 locations at June 30, 2008, which is up from 116 at June 30, 2007. Revenue from company-owned retail locations was $17.4 million in the three months ended June 30, 2008, compared to $13.1 million in the three months ended June 30, 2007. Crocs plans to open additional retail locations in North America in 2008.