Shares of Crocs on Tuesday slid 88 cents, or 9.1 percent, to $8.76 on Tuesday after the company reported that third-quarter earnings exceeded Wall Street’s targets but provided weak guidance.

Due in part to improved margins, the comfy footwear maker reduced its loss to 3 cents a share, better than Wall Street’s consensus estimate of 5 cents. But its fourth-quarter sales guidance came in slightly below Wall Street’s targets and management indicated that revenue growth in FY18 was likely to be flat,

Andrew Rees, president and chief executive officer, said, “The third quarter was another strong quarter for us, both in terms of our financial performance and the progress made against our strategic initiatives. Consistent with the first half of this year, we again met or exceeded our guidance metrics. Furthermore, the perception of the brand continued to rise, with results from our latest annual brand survey showing double digit increases in brand desirability, relevance and consideration compared to last year. Looking ahead, we are confident that further operational improvements and a disciplined approach to expense management will facilitate a return to double digit EBIT margins.”

Third Quarter 2017 Operating Results:

Revenues were $243.3 million, above the top end of its revenue guidance, and decreased 1.1 percent compared to the third quarter of 2016. On a constant currency basis, revenues decreased 1.6 percent compared to the third quarter of 2016.

Third quarter gross margin was 50.8 percent, an increase of 100 basis points over last year’s third quarter. Crocs’ focus on core molded product and its continued focus on inventory management resulted in higher quality revenue that delivered stronger gross margins.

Selling, general and administrative expenses (SG&A) were $120.8 million compared to $123.6 million in the third quarter of 2016, a decrease of 2.3 percent. As a percent of revenues, SG&A improved 70 basis points. The third quarter 2017 SG&A includes $3.6 million of charges relating to its SG&A reduction plan.

Income from operations improved by $3.9 million, coming in at $2.7 million compared to last year’s third quarter loss of $1.2 million.

Net loss attributable to common stockholders was $2.3 million, or 3 cents a share. This amount includes $3.6 million related to its SG&A reduction plan. For the quarter ended September 30, 2017, Crocs had 71.9 million weighted average diluted common shares outstanding. In the year-ago year-ago quarter, Crocs lost $5.4 million, or 7 cents a share.

Balance Sheet and Cash Flow Highlights:

Cash and cash equivalents as of September 30, 2017 were $178.2 million, compared to $150.2 million as of September 30, 2016.

Inventory was $140.3 million as of September 30, 2017, compared to $169.4 million as of September 30, 2016. This 17.2 percent decline reflects its ongoing efforts to carefully manage inventory levels and improve the quality of goods on hand.

Cash provided by operating activities was $80.4 million during the first nine months of 2017, compared to $29.4 million during the first nine months of 2016.

Capital expenditures totaled $2.0 million during the third quarter of 2017, compared to $5.4 million during the third quarter of 2016.

Cash flows from financing activities during the third quarter of 2017 include $15.6 million used to repurchase 1.9 million shares of its common stock.

At September 30, 2017, there were no borrowings outstanding on its credit facility, and in October 2017, Crocs increased the borrowing capacity of the facility to $100 million from $80 million.

Financial Outlook:

Fourth Quarter 2017:

The company expects fourth quarter 2017 revenues to be between $180 and $190 million. Wall Street’s consensus target had been $192 million.

The company expects the gross margin for the fourth quarter to be approximately 43 percent, or 100 basis points above last year’s 42 percent gross margin.

The company expects SG&A of approximately $115 million, including approximately $2 million of charges associated with its SG&A reduction plan. This represents a $3 million reduction to last year’s $118.5 million of SG&A in the fourth quarter.

Full Year 2017:

The company continues to expect 2017 revenues to be down low single digits compared to 2016.

The company continues to expect gross margin for 2017 to be approximately 50 percent.

The company continues to expect SG&A for 2017 to be between $490 and $495 million. Included in the range is approximately $10 million of charges associated with its SG&A reduction plan.