Crocs Earnings Top Estimates, but Coronavirus Weighs on Stock
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Shares for Crocs Inc. are tumbling in Thursday premarket trading after the clog maker issued a full-year outlook weakened by the coronavirus.
As of 9:00 a.m. ET, the firm’s stock was down more than 10% to $30.30. For the first quarter, Crocs expects between $305 and $325 million in revenues, including a negative impact of roughly $20 to $30 million as a result of disruptions to its business in Asia. Looking at all of 2020, it anticipates a sales loss of $40 to $60 million, leading to total revenues of $1.23 billion.
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“Although we begin the new year with great momentum and exciting plans in place to build on our recent growth, our immediate focus is with everyone affected by the coronavirus and ensuring that our employees in China, along with our partners, safely navigate the risks associated with this global health epidemic,” president and CEO Andrew Rees said in a statement. “Despite this difficult situation, we continue to be very optimistic about our long-term growth prospects in China and our Asia region.”
Crocs added that many of its partner stores in China are temporarily closed, while those that remain open are operating at reduced hours and experiencing lower-than-usual foot traffic. It joins a growing list of retailers that have raised concerns over the illness’ ability to significantly hurt business.
The guidance was included in the Niwot, Colo.-based company’s fourth-quarter financial report, which noted adjusted earnings per share of 12 cents on profits of $19.9 million, versus a loss of $118.7 million last year. Wall Street had predicted EPS of 7 cents. Revenues also bested analysts’ estimates of $260.08 million, jumping 21.8% to $263 million.
“Focusing on our core clog and sandal categories and further igniting brand heat through impactful marketing campaigns and collaborations are fueling strong revenue growth,” Rees said. “Equally important, the work we’ve done reducing our expense structure is allowing us to translate our top-line success into even stronger earnings growth as we continue to make important investments in the business.”
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