Crocs cuts Asian sales expectations on Coronavirus’ economic effects
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NIWOT — Crocs Inc. (Nasdaq: CROX) said it was optimistic it would continue to see long-term sales growth in Asia despite the overall pessimism in the country’s economy due to the ongoing Coronavirus outbreak.
The Niwot clog maker posted $263 million in revenue for the previous quarter, a year-over-year gain of 21.8 percent over the same period in 2018 and a beat on Wall Street consensus estimates by $1.48 million.
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It also posted earnings of 12 cents per share, beating consensus estimates by 5 cents, according to data compiled by Seeking Alpha.
In a conference call Thursday morning, CEO Andrew Rees said he expects to start growing more rapidly in the Chinese market over the long term, despite most of the about 350 stores in the country that sell Crocs being closed or on shorter hours due to the ongoing Coronavirus outbreak. The company said China accounted for about 5 percent of its overall revenue in 2018.
The Coronavirus, which originated in the central city of Wuhan, has infected 78,000 and killed 2,718 in China, according to the most recent statistics from the World Health Organization.
“With a much stronger foundation in place in China, we’re starting to ramp-up our efforts to accelerate growth. In the near-term, however, our priority is to ensure that our employees in China along with our partners and suppliers safely navigate the health risks associated with the coronavirus,” he said.
Only about 10 percent of finished Crocs products are made in China while about 70 percent come from Vietnam.
However, Chief Financial Officer Anne Mehlman said the company cut its sales projections in Asia for the first quarter of 2020 from $50 million to $30 million as retail traffic fell in markets outside of China.
Crocs stock fell 16 percent Thursday to $28.45.
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