Crocs falls into red in Q1

Crocs has experienced a difficult quarter. At constant exchange rates, the American footwear brand saw its sales down by 8% during the first three months of 2015 compared to the same period last year. Its turnover was 262 million dollars, a decline of over 16%.

The company said that the decline in its business was due to its ongoing reorganization in China, where it’s looking for a new partner in Wuhan, the closure of 30 stores as compared to 3 openings globally, the dockworker strikes in ports on the US West Coast and, inevitably, the impact of the strength of the dollar.

Geographically, the group saw its sales decline by 8% in the Americas to less than 106 million dollars, a decrease of 9.7% at constant exchange rates. The Asia-Pacific saw an 18.5% decline (-23.8% after currency) to less than 100 million. Europe is the only region to have shown an increase, at +12.1%, but the conversion into dollars dragged the number down to -12%, at $ 56 million.

During the quarter, Crocs saw its operating profit sink into the red to -2.4 million dollars as compared to 16.8 million last year during the same period. Management said in a statement that, excluding certain non-recurring events, its operating income was 8.3 million as compared to 24.9 million last year.

The company explained, however, that it was focusing its efforts on six markets: the United States, Japan, China, Korea, Germany and Britain, which together make up about 70% of its business. It also announced that it had dismissed its chief operating officer and its president of global supply chain.

For its second quarter, Crocs expects sales to be down at between 340 and 350 million dollars. For its entire fiscal year, it intends to close a total of 65 stores and to bring to an end its less profitable product lines.

Crocs falls into red in Q1

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