Inside a Crocs store at Queens Center in New York.
Ryan Baker | CNBC
Casual shoe company Crocs plans to reduce orders for the second half in the middle of what its CEO called a “concerning” environment for the consumer.
“We see the American consumer behaving with caution around discretionary expenses. They are faced with increases in current and implicit future prices, which, in our view, has the potential to make an additional element on an already full consumer. In this file, our retail partners act more carefully and reducing their results of the company open to this week,” said CEO Rees.
“The current environment in the second half is worrying, and we see this clearly reflected in retail books. We firmly believe that it is time to make daring decisions for the future to support and advance a mode of sustainable cash flow,” added Rees.
Crocs’ shares lost almost 30% on Thursday after the company issued the warnings struck and published a lower forecast than expected for the current quarter.
Thursday’s losses have undergone the worst stock day since October 2011.
Crocs imports most of its country products such as Vietnam, China, Indonesia and Cambodia which are now subject to steep import rates.
Rees said that the company was taking measures to protect profitability, in particular by withdrawing promotional activity between retailers and taking up part of its older inventory, in particular for its Heydude Shoe brand, in order to “reset” retail partners with new stocks.
“This will create other winds contrary to the volume of sales in the coming quarters,” said Rees when calling on the results.
Rees said in a profits statement that Crocs had previously implemented $ 50 million in cost savings.
“Although these actions will have an impact on the head line of our short-term company, they will position our business to win, generate margins and support the continuous generation of cash flows,” he said in the press release.
The company provides for the third quarter income well below the estimates of Wall Street. Crocs expects the current quarter income to decrease between 9% and 11% from one year to the next. The analysts interviewed by LSEG expected that the income was slightly higher than the previous year.
Crocs also provides for an operating margin adjusted in the third quarter of around 18% to 19%, against 25.4% in the third quarter a year earlier.
The company refused to issue annual orientations.
For the second quarter, Crocs declared a net loss of $ 492.3 million, or $ 8.82 per share, against a net profit of $ 228.9 million, or $ 3.77 per share, during the same period a year earlier. This loss was driven by non-Cash disabilities of $ 737 million linked to its Heydude brand.
According to LSEG, with the exception of these costs and counting other occasional items, the company has displayed an adjusted profit of $ 4.23, exceeding the wait for Wall Street for $ 4.01 per share.
Income reached $ 1.15 billion, an increase of 3.4% compared to the previous year and in accordance with the LSEG estimate of $ 1.14 billion.
– Melissa Repko from CNBC and Sara Salinas contributed to this report.