Crocs shares fall after 'difficult' holiday season

Crocs says holiday season was difficult; expects backlog growth at lower end of outlook

Associated Press

NEW YORK (AP) -- Shares of Crocs fell more than 6 percent Wednesday as the footwear company announced its holiday season was difficult. It also expects that backlog growth for the first half of 2013 will be at the lower end of its previous guidance.

THE SPARK: Crocs, known for its colorful plastic shoes, said in a regulatory filing that it experienced a "difficult holiday retail sales environment similar to other brands/retailers." The Niwot, Colo., company did not provide further details about holiday sales.

The holiday period from November through December is critical for many retailers because they can make up to 40 percent of their annual revenue then.

The company said backlog for 2013's first half is estimated to be up 15 percent. Its prior forecast was for a 15 percent to 18 percent increase.

Crocs Inc. also maintained its fourth-quarter revenue forecast of $220 million. Analysts surveyed by FactSet expect $219.5 million in revenue.

Crocs is meeting with analysts and investors at the ICR Exchange Conference in Florida on Wednesday.

THE ANALYSIS: Jim Duffy of Stifel Nicolaus said Crocs didn't provide an update to its fourth-quarter earnings outlook, which calls for breakeven results. The analyst said in a client note that is similar to what the company did last year before the ICR Exchange conference, and it was viewed as a mixed signal. But Duffy said when Crocs did report quarterly earnings for the prior-year period, they were above previous guidance.

The analyst expects Crocs to report fourth-quarter financial results in mid-to-late February.

Duffy said he was encouraged by Crocs reaffirming its quarterly revenue outlook, "as the retail environment was mixed during the quarter and we believe investor expectations have been tentative into the quarterly results."

The analyst views the stock as undervalued and kept a "Buy" rating and $20 price target on it.

SHARE ACTION: Croc's stock dropped $1.04, or 6.6 percent, to $14.67 in midday trading. The stock has traded between $12 and $22.59 over the past 52 weeks.

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