Crocs, Inc. reported revenues for the third quarter of 2011 increased 27.5 percent to $274.9 million compared to revenue of $215.6 million in the third quarter of 2010. In line with a warning given on Oct. 17, net income increased 20.8 percent to $30.2 million, or 33 cents per share compared to $25.0 million, or 28 cents, in the third quarter 2010.

The year-ago period included a one-time tax benefit of $3.0 million, or $0.03 per diluted share.

On Oct. 17, Crocs indicated that it was revising its revenue and earnings guidance downward for the third quarter ended September 30, 2011. The company said it expected revenue to be in the range of $273.0 to $275.0 million for the third quarter. This compares to the company's previous guidance for third quarter 2011 revenue of $280.0 million. It expected EPS to be between 31 cents and 33 cents compared to its previous guidance of diluted earnings per share of 40 cents.

John McCarvel, President and Chief Executive Officer, said in a statement, “We continued to experience strong global demand versus the prior year period, particularly in Asia. The performance of our spring / summer 2011 product line and the composition of our backlog at September 30, 2011 underscores the progress we have made diversifying Crocs beyond its clog origins. We still remain confident that our long-term brand and growing selection of sneakers, casual shoes, and boots have the ability to penetrate the cold weather selling season in each of our geographic regions. While these are competitive categories with established leaders, we believe we can continue to capture market share and further reduce the seasonality of our business over the long-term.”

Year-over year third quarter changes in the company’s channel revenue streams were as follows:

  • Wholesale sales increased 24.3% to $154.0 million;
  • Retail sales increased 31.4% to $95.3 million; and
  • Internet sales increased 33.7% to $25.6 million.

Year-over year third quarter changes in the company’s regional revenue streams were as follows:

  • Asia increased 40.6% to $111.2 million;
  • Americas increased 18.0% to $122.7 million; and
  • Europe increased 25.9% to $41.0 million.

Gross profit for the third quarter of 2011 increased 23.9 percent to $147.2 million, or 53.5 percent as a percentage of sales, from $118.8 million, or 55.1 percent of sales in same period last year. Selling, General, & Administrative expenses increased 21.0% to $111.6 million versus $92.2 million a year ago. As a percentage of sales, SG&A decreased to 40.6 percent from 42.8 percent in the third quarter of 2010.

Balance Sheet

Cash and cash equivalents at September 30, 2011 increased 54.1% to $220.4 million compared to $143.1 million at September 30, 2010. Inventories at September 30, 2011 were $151.1 million, up from $142.5 million at September 30, 2010.

Backlog

Backlog at September 30, 2011 increased 30.3 percent to $296.8 million compared to backlog of $227.8 million at September 30, 2010.

Guidance

For the fourth quarter of 2011, the company expects revenue to be in the range of $200 to $205 million and diluted earnings per share to be between 3 cents and 5 cents.

McCarvel concluded, “Our fourth quarter guidance reflects recent softness in our European business due to the current macroeconomic conditions. While we expect Europe to remain challenging as we move into 2012, we are pleased with the strength of our spring 2012 backlog in Asia and the Americas. We believe strong 33 percent growth in our consolidated spring backlog sets us up for continued growth into next year. The response from retailers to our new product introductions has been very positive in Asia and the Americas and we believe it will provide us with good momentum to start the New Year.”