Aug 6, 2009
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Crocs beats revenue view, shares rise

Aug 6, 2009

SAN FRANCISCO, Aug 6 (Reuters) - Crocs Inc (CROX.O) said it is on track to return to a profit next year after handily beating Wall Street estimates for the second quarter, and shares of the shoe company rose 28 percent.


Chief Executive John Duerden said on Thursday 6 August that "tangible business improvements" helped results, as did positive reactions by consumers to new product in its retail stores and market-share gains in Asia.

The company now expects to reduce its operating losses through the rest of 2009.

Crocs also said it had repaid in full $17.3 million borrowed under a credit facility and signed a term sheet with a well-known lender for a new, asset-backed revolving credit facility by the end of the third quarter.

Crocs's resin shoes were rage midway through the decade. But the company found its operations out of whack with reduced sales volume due to the economic downturn and shoppers' waning interest in the novelty of the brand.

The company then resorted to cost reductions, such as staff cuts and factory closures, and tried to cope with an inventory overhang.

On Thursday 6 August, Crocs said it had cut its inventory by nearly a quarter since the end of December, adding that net capital expenditures fell 54 percent in the second quarter.

The net loss in Croc's second quarter -- its fourth consecutive quarterly loss -- came to $30.3 million or 36 cents per share, compared with a year-ago net profit of $2.1 million or 3 cents per share.

Excluding impairment and restructuring charges, compensation expense and charitable donations, its loss was $5 million, or 6 cents per share, the company said.

But including the negative effect of foreign currency exchange rates, Crocs posted a loss of 13 cents per share, better than the loss of 21 cents per share expected, on average, by analysts, according to Reuters Estimates.

Revenue fell 11 percent to $197.7 million, the company said. It had been expecting $135 million to $160 million.

Crocs said it expects third-quarter revenue of between $150 million to $160 million, with an adjusted loss per share ranging between 6 cents to 14 cents.

Wall Street, on average, had been expecting revenue of $140.8 million.

Crocs's shares rose 28 percent to $5.48 after closing at $4.27, up 5 percent, on the Nasdaq. (Reporting by Alexandria Sage; editing by Edwin Chan and Carol Bishopric)

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