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Crocs' First Quarter Results Lack Bite


Earnings fall just shy of analysts' expectations.


Trendy shoemaker Crocs (CROX) released its first quarter numbers Wednesday after the closing bell. According to Bloomberg:

Revenue came in at $198.5 million. The company posted a loss of $4.5 million or 5 cents per share, well below the $24.9 million or 31 cents per share it earned in the comparable period a year ago. Backing out special expenses (related to the closure of a Canadian production facility) it posted a profit of 9 cents per share.

These results shouldn't come as all that much of a surprise. After all, in mid-April, it offered up comprehensive guidance: A first quarter loss between five cents a share and break even on revenue of $195 to $200 million, and full year revenue growth between 15% and 20% over and above 2007 with earnings between $1.54 and $1.64 a share.

To its credit, its first quarter 2008 numbers were essentially in line with last month's forecast. However, it's important to note that the sell-side was forecasting that the company would earn a dime per share (not counting special charges) on revenue of about $196.7 million. To that end the figures were a little bit uninspiring.

The other tidbit of good news was that management again backed its full year forecast of between $1.54 and $1.64 a share on 15% to 20% revenue growth. The fact that it reiterated this number, one might argue, is a decent sign. Furthermore, the fact that the company was willing to come out and offer annual guidance so early in the year, in spite of obvious economic uncertainty, is also a positive.

At the same time, this remains a fluid situation. Given that Crocs already lowered estimates earlier this year, it probably makes sense to leave the cork in the champagne bottle for at least another couple of quarters.

The shares were up a point and change in after-hours trading on Wednesday, most likely because the situation at Crocs didn't appear to get any worse. Keep in mind that the competitive environment and weak consumer spending means it has a long hard slog ahead of it for the remainder of the year.

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