NIWOT, Colo.—Crocs Inc. said Wednesday it swung to a third-quarter loss of nearly $148 million as sales of the company’s colorful plastic clogs plunged by nearly one-third amid a deteriorating U.S. economy and retail environment.
The loss included one-time charges of $104 million reflecting the declining value of the shoe maker’s business, and Crocs issued a fourth-quarter financial forecast far below Wall Street expectations.
Crocs reported a net loss of nearly $148 million, or $1.79 per share, for the three months ended Sept. 30, compared with net income of $56.5 million, or 66 cents per share, a year ago.
Revenue dropped 32 percent to $174.2 million from $256.3 million. The latest quarter’s revenue fell far short of the forecast of analysts surveyed by Thomson Reuters, who had expected $201.7 million, on average.
Crocs recorded a $70 million charge in the latest quarter from writing down the value of inventory and expected losses on inventory purchase commitments. The Niwot, Colo.-based company took an asset impairment charge of $36.1 million that included a write-off of excess equipment and tooling. Crocs recorded a $2.5 million restructuring charge from the closure of Canadian manufacturing and distribution operations.
The company also reported a loss of about $14.6 million from unfavorable currency exchange rates, and increased its provision for returns and allowances by $19.5 million from a year earlier.
“Our performance was below expectations and continued to be impacted by the extremely challenging retail environments in the U.S. and Europe during the third quarter,” said Ron Snyder, president and chief executive. “Based on current trends we have lowered our projected sales volumes and made the strategic decision to further right-size our operations to better align with our lower volumes and revenues.”
Citing the weak economy, Snyder said Crocs plans to reduce capital expenditures by about 50 percent next year compared with 2008.
Crocs reported quarterly results after its shares fell 25 cents, or nearly 12 percent, to $1.90 during the regular session. Its shares are down sharply from a 52-week high of $46.80 reached in December.
