Crocs said that first-quarter revenues would be between $195 million and $200m against a prior guidance of $225m. However it pointed out that this represented an increase of between 37% and 41% on last year, and said that domestic sales were expected to grow 13% and European sales would grow 90% this year.
Crocs blamed the soft economy for falling sales in its domestic market and said that cooler than average weather had impacted on sandal sales. Crocs also suffered higher operating expenses and lower margins during the quarter.
The company said it would also close its Canadian manufacturing operation to improve its cost structure.
Crocs share price crashed by 43% yesterday following the news and several analysts downgraded the company.
Jeff Mintz, analyst at Wedbush Morgan Securities, changed his rating fro a "strong buy" to a "hold" and said: "The significant reduction in expected door count growth suggests a reduction in retailer demand for the company's product."
However Ron Snyder, president and chief executive of Crocs, was reported to have been in positive mood following the announcement yesterday. He said: "On the international front , we remained very encouraged about our business, evidenced by a strong first quarter. We believe we are under penetrated in most markets and expect to grow at a 30%-plus rate outside the US this year. We remain pleased with selling and sell-through of new products, which highlights the diversification of our business over the past year."
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