Crocs suffers dramatic Q3 lossMonday, 17 November 2008
After swinging to a third quarter loss of $148 million, plastic clog maker Crocs Inc is to close its manufacturing facility in Brazil. The company also announced it will cut back its capital spending in 2009 by 50 percent, in an attempt to "right-size" its business.
Earlier this year, the company shut down a factory in Canada.
The company has lowered its sales and earnings outlook amid "the extremely challenging retail environments in the US and Europe."
The changes come as Crocs slumped to a net loss of $148 million for the three months to 30 September, down from a profit of $56.5 million a year earlier.
Sales fell 32 percent and were $174.4 million, which also was far lower than expected by either analysts or the company itself. Crocs also saw their profit margin decline to only 1.4 percent compared to a healthy 60.6 percent they had last year.
Ron Snyder, chief executive officer and president of Crocs, stated: "Our performance was below expectations. 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."