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Crocs revenues drop 10.5 percent in Q4 and 4.7 percent in FY16

By Prachi Singh

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Business

Crocs said its revenues were in line with guidance at 187.4 million dollars for the fourth quarter compared to 208.7 million dollars for the same period last year. On a constant currency basis, revenues decreased 10.5 percent. For the full year, revenues were 1,036.3 million dollars. On a constant currency basis, revenues decreased 4.7 percent compared to the prior year period. Crocs also announced that Andrew Rees, who joined the company in June 2014 as President, will be promoted to the position of President and CEO effective June 1, 2017.

Commenting on the company’s results, Gregg Ribatt, Chief Executive Officer, said in a press release, “Our fourth quarter revenues were in line with our expectations while our adjusted gross margin rate improved by approximately 550 basis points versus prior year. In order to accelerate improved profitability, we have identified 75 to 85 million dollars of annualized SG&A reductions that we expect will generate an annual 30 to 35 million dollars of improvement in earnings before interest and taxes by 2019.”

Fourth quarter and FY16 operating result highlights

In the fourth quarter, the company reported a GAAP net loss attributable to common stockholders was 44.5 million dollars or 0.60 dollar per basic and diluted share, compared to 73.9 million dollars or 1.01 dollars per basic and diluted share, in the same quarter of the prior year. Excluding certain charges not related to our core business, the company reported a non-GAAP adjusted net loss attributable to common stockholders of 43.1 million dollars or a 9 percent improvement compared to the same period last year.

For the full year, the company reported a GAAP net loss attributable to common stockholders of 31.7 million dollars or 0.43 dollars per basic and diluted share, compared to 98 million dollars or 1.30 dollars per basic and diluted share in 2015. Excluding certain charges not related to its core business, the company reported a non-GAAP adjusted net loss attributable to common stockholders of 26.9 million dollars or a 22 percent improvement compared to last year.

Expects FY17 revenues to remain flat

The company expects 2017 revenue to be relatively flat compared to prior year reflecting the impact of store closings, the reduction of discount channel business and the disposition of its South Africa and Taiwan businesses during 2016. The company expects gross margin for 2017 to be approximately 50 percent.

For the first quarter, the company expects revenue to be between 255 and 265 million dollars and gross margin for the quarter to be approximately 200 basis points higher than first quarter 2016.

After Rees assumes his role as CEO on June 1, 2017, Gregg Ribatt, the company’s current CEO, will remain on the company’s Board of Directors. In addition, effective immediately, Michelle Poole, SVP of Global Product and Merchandising is assuming responsibility for marketing. Ann Chan, SVP and GM of Europe, is transitioning to SVP and General Manager of Americas and David Thompson, SVP of AMEA is also assuming responsibility for Europe. The company has also established a new Global Ecommerce function, which is being headed by Adam Michael, who has been promoted to SVP of Global Ecommerce.

Picture:Facebook/Crocs

Crocs