By RTT News, September 10, 2013, 09:24:00 AM EDT
(RTTNews.com) - Footwear and apparel maker Crocs, Inc. ( CROX ) on Tuesday lowered its financial outlook for the third quarter, citing weakness in its Americas region where orders in the wholesale channel and performance in the direct to consumer channel were both below its prior outlook. The company's shares are down more than 7 percent in pre-market trades following the announcement.
For the third quarter, Niwot, Colorado-based Crocs now forecasts earnings in a range of $0.15 to $0.18 per share and revenues of $285 million to $295 million. Earlier, the company forecast earnings in a range of $0.20 to $0.23 per share on revenues of $300 million to $310 million.
On average, analysts polled by Thomson Reuters expect the company to report earnings of $0.23 per share on revenues of $305.08 million. Analysts' estimates typically exclude one-time items.
According to Crocs, both the present and the previous outlook include ERP implementation expense of $0.02 per share and adverse foreign currency translation of $0.04 per share.
However, the company expects gross margins for the third quarter to be generally in-line with prior year performance. The softness in the Americas region in the quarter was somewhat offset by stronger than expected revenue and comparable store performance in the company's Asia Pacific and Europe regions.
John McCarvel, President and Chief Executive of Crocs said, "While revenue for the third quarter of 2013 is coming in below our prior forecasted outlook because of lower than expected revenue in the Americas region, we are very satisfied to date with our Asia Pacific and Europe retail sales performance in the quarter."
McCarvel added, "We are pleased with the early indications of strong demand from our wholesale customers for spring/summer 2014 product, as pre-books for these products are presently running ten percent ahead of last year. We believe our brand is well positioned to take advantage of our customers demand for colorful and fun footwear in 2014."
Further, Crocs said it is working to adjust its capital allocation strategy by the end of fourth quarter 2013. The company noted that the strategy would allow it to maximize returns through opportunistically deploying from $80 million to $100 million of domestic cash to fund potential stock repurchases or other strategic investments in the future.
Crocs added that it will participate in the Goldman Sachs 20th Annual Global Retailing Conference in New York City on September 10, 2013 and CL King 11th Annual Best Ideas Conference 2013, also in New York City, on September 11, 2013.
In late July, Crocs reported a profit for the second quarter that nearly halved from last year, reflecting higher expenses and lower gross margins amid increased discounting in the Americas and Europe.
The company's net income for the second quarter was $35.36 million or $0.40 per share, down from $61.52 million or $0.68 per share in the prior-year quarter. Revenues for the quarter grew 10 percent, or 12.5 percent in constant currency, to $363.83 million from $330.94 million in the same quarter last year.
CROX closed Monday's trading at $13.61. In Tuesday's pre-market, the stock is down $1.09 or 8.01 percent to $12.52.
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