Shares of Crocs (NASDAQ: CROX) fell 10% on Thursday despite stronger-than-expected fourth-quarter 2018 results from the casual footwear specialist. Rather, it seems slightly soft forward guidance left the market underwhelmed.
More specifically, Crocs' quarterly revenue climbed 8.5% year over year (or 11.3% at constant currencies) to $216 million, translating to an adjusted (non-GAAP) net loss of $7.7 million, or $0.10 per diluted share. Analysts, on average, were anticipating a wider adjusted net loss of $0.24 per share on lower revenue of $213.2 million.
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To be clear, Crocs' revenue was held back by a combination of store closures and business model changes which reduced sales by $7 million. So though its retail sales rose a modest 1.3% to $69.9 million, retail comparable-store sales grew 13.4%. Meanwhile, Crocs' wholesale segment increased sales 9.7% to $102.1 million, and e-commerce revenue grew 18.9% to $43.9 million.
Crocs CEO Andrew Rees added:
Our fourth-quarter results contributed to what was a very successful year. We had record revenue in many key markets, with the U.S. market leading the way. We have hit multi-year highs in revenue and gross margin, while at the same time significantly reducing our [sales, general, and administrative expenses] run rate. Global demand for our brand remains strong, and as a result, we anticipate delivering revenue growth of 5% to 7% in 2019.
More specifically, that 5% to 7% growth rate equates to a 2019 revenue range of roughly $1.14 billion to $1.16 billion -- approximately in line with consensus estimates -- even after assuming $20 million in lost sales related to store closures and $20 million in foreign currency headwinds.
That said, Crocs also told investors to expect first-quarter 2019 revenue of between $280 million and $290 million. Analysts, on average, were modeling Q1 revenue near the high end of that range.
What's more, we should keep in mind Crocs stock more than doubled in 2018 as the company notched impressive progress in its ongoing turnaround, inevitably leaving some traders itching to take profits at the first sign of perceived weakness. Given Crocs' propensity for under-promising and over-delivering in recent quarters, however, I'm unconvinced this quarter's likely conservative guidance represents such a sign. If Crocs continues to take steps in the right direction, I suspect its stock won't stay down for long.
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