Crocs, Inc. (NASDAQ:CROX) made its own fashion statement, of sorts, besting expectations for the first quarter as customers stocked up for spring and summer, while the company continued to close its branded stores. Shares are up more than 6% this morning in pre-market trading.
Revenue was $267.9 million, which, on a constant currency basis, were down 4.4%, compared to the first quarter of 2016, according to a company statement. Net income was $7.2 million, or 8 cent a share. Analysts had forecast sales to reach $257 million in the quarter, with earnings per share of 3 cents, according to Zacks Investment Research.
Niwot, CO.-based Crocs designs and manufactures shoes made of closed-cell resin material, whose fans range from hospital workers to fashionistas.
“During the first quarter of 2017, we continued to execute against our strategic plan to strengthen the Company and brand. Customers responded favorably to our Spring/Summer 2017 product, enabling us to achieve revenues that exceeded our guidance, while simultaneously driving gross margin improvements” said CEO Gregg Ribatt.
Ribatt will step down as CEO on June 1, while Andrew Rees will become the president and CEO. Rees has been in the company since becoming president in 2014.
Gross margin was 49.9% compared to 46.3% in Q1 2016, a 350 basis point improvement. CROX said higher quality sales, a shift to a higher percentage of molded product and lower input costs contributed to this improvement.
CROX closed a net 16 company-operated stores during Q1 and signed agreements to transfer 24 company stores to distributors during before June 30. In March, the company said it would close around 160 Crocs stores, amounting to about 28% of all locations.
Crox expects Q2 2017 revenues to be between $305 million and $315 million, with gross margin to be approximately 150 basis points higher than Q2 2016.
CROX stock was trading near a 52-week low as of yesterday’s close.
