How bad is this economic slowdown? Well I am sure all of you have seen or heard of Crocs. Its the trendiest clog in town and everyone wants a pair. Crocs shareprice tripled in 2006 as it became a must have shoe for every man, women, and child.
The Crocs story continued in 2007 as revenue continued to soar. Sales estimates were expected to stay hot as revenue growth for the 1st quarter of 2008 was expected to be 37%.
So how did they do for the quarter? Here are the results from Bloomberg:
"Crocs Inc., the maker of the namesake colorful clogs, said it will fire its 600 Canadian plant workers after lowering annual earnings and sales forecasts as consumer spending slowed.
Crocs, based in Niwot, Colorado, tumbled 28 percent after the close of Nasdaq trading.
The shoemaker will close its Quebec City factory to reduce expenses, said spokeswoman Tia Mattson.
The shutdown of the Canadian plant will contribute to a first-quarter loss of as much as 5 cents a share, Crocs said. Revenue will be as low as $195 million for the quarter. The company previously forecast profit of 46 cents a share on revenue of $225 million."
I can hear the temper tantrums now as parents explain to their kids that they cannot afford to buy them the new Crocs styles this summer. Anyone put those things on BTW? Man they are comfortable.
Obviously -.05 cent loss versus a .45 cent gain is a huge miss and revenues came in more then 10% light. The stock plunged 28% in after hours trading.
Its always a surprise when a company like Crocs misses because its not a huge ticket item and their brand is extremely hot. Take notice when a company likes this misses. It tells you that the retail environment is horrific out there.
Earnings season should be interesting to say the least. We get Citigroup later this week and most of the investment banks next week. Expect more confessionals and additional write downs. Wachovia lowered their dividend after saying they had no intentions of doing this during their previous conference calls.