Crocs Inc. reported strong earnings for the first quarter earlier this week, easily beating expectations on strong sales growth in Asia and the Americas.
Its reward? Investors promptly sliced 10 percent off the value of the stock Thursday and Friday, after management said sales growth in the second quarter would likely slow to 11 percent from the 20 percent pace seen in the first three months.
“I can’t tell you what investor thinking is,” said John McCarvel, the Niwot shoemaker’s president and CEO, in an interview Friday. “In conversations with major investors, everyone who understands the Crocs story is happy with the business.”
The company remains on track to meet its first half of the year targets even with that slowing pace, some of which is a result of a stronger U.S. dollar.
McCarvel acknowledges that Crocs still has work to do to restore investor confidence after its shares plunged from the $70 range in mid 2007 to just above $1 in 2008. Until then, it will remain vulnerable to rapid price moves.
“I want to run a good business, something that is predictable and stable,” he said. “That is what we are trying to do.”
Economic woes in Europe are putting a damper on sales there, especially in the south. The company’s business in northern Europe remains solid, and Crocs two years ago began taking back distribution rights in the United Kingdom, France and Germany so it could open its own stores.
Crocs expects to open up 25 to 35 retail outlets in those three markets, something less expensive to do because of the slowdown.
“Adding the stores is key and becoming a good retailer is key,” McCarvel said. “It takes time. This will be the right year for us to do it.”
Sales overseas account for 62 percent of the company’s business, and the company is making huge strides in Asia, where sales rose 40 percent in the first quarter.
That has translated into additional hiring at its Boulder County headquarters, a trend the company expects to continue, McCarvel said.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com and
