Crocs Inc. slashed its loss in the third quarter, although the latest period again includes restructuring charges. Sales in the quarter were down 11.6 percent and are expected to slide between 7 percent and 11 percent in the fourth quarter.

Third Quarter Highlights
Revenues were in line with guidance at $245.9 million for the three months ended September 30, 2016. On a constant currency basis, revenues decreased 11.6 percent, compared to the three months ended September 30, 2015. Revenues were at the low end of guidance calling for sales in the range of $245 million to $255 million. Improved inventory management resulted in a $21.4 million, or 11.2 percent, decrease in inventory as of September 30, 2016 compared to September 30, 2015.

Gregg Ribatt, CEO, said: “We continue to manage our business tightly in what remains a challenging consumer environment. Revenues were in line with our expectations, while gross margin exceeded our guidance by approximately 200 basis points as we further limited off-price selling and promotional activities. At the same time, we reduced our inventories 11 percent compared with last year. Looking ahead, we continue to plan conservatively given the current top-line headwinds. We are working hard to drive quality growth through our product, marketing and distribution strategies and we remain confident that the steps we’ve taken to build a better business model will result in increased profitability and greater shareholder value.”

Third Quarter Operating Results
In the third quarter of 2016, the company reported GAAP net loss attributable to common stockholders of $5.4 million, or 7 cents per basic and diluted share, compared to a net loss attributable to common stockholders of $27.8 million, or 37 cents per basic and diluted share, in the same quarter of the prior year.

As outlined in detail in the GAAP to non-GAAP reconciliations set forth in its press release, the company recorded net charges of $3.3 million unrelated to its core business in the three months ended September 30, 2016, compared to $8.6 million in the three months ended September 30, 2015. Excluding these items, the company reported, on a comparable basis, non-GAAP adjusted net loss attributable to common shareholders of $2 million in the three months ended September 30, 2016, versus non-GAAP adjusted net loss attributable to common shareholders of $19.2 million in the three months ended September 30, 2015.

Balance Sheet
Cash and cash equivalents as of September 30, 2016 were $150.2 million compared to $143.3 million as of December 31, 2015. Inventory was $169.4 million as of September 30, 2016 compared to $190.8 million as of September 30, 2015.

The company did not repurchase any shares during the three or nine months ended September 30, 2016.

Financial Outlook
The company expects fourth quarter 2016 revenues in the $185 million to $195 million range compared to $208.7 million in the fourth quarter of 2015. For the year ended December 31, 2016, the company expects revenues to be $1.034 billion to $1.044 billion.

Photo courtesy Crocs