Crocs shoes have been struggling for some time, but it’s staying afloat, thanks to its second quarter sales expectations and its new CEO.
Crocs Inc.’s revenue and income fell in its Q2 or second-quarter results. Crocs reported a net income per diluted share of $9.7 million, or 11 cents per share, on its revenue of $345.7 million, as previously reported via the Denver Post business section. According to the company’s new CEO, Gregg Ribatt, the sales revenue expectations met with analysts’ predictions, which is good news for the struggling business.
Crocs had to completely restructure its business by closing 44 stores, laying off its workers, and reducing some of its product line. Ribatt explained the restructuring process via a written statement.
“The company continues to make meaningful progress in implementing our strategy including: strengthening our brand; elevating our product stories; evolving our international business to focus on our six core markets; strengthening our relationships with key wholesale partners; improving our direct to consumer capabilities; simplifying our business model; and, building a best in class team. We are confident that these moves are laying the foundation to position the company for sustained growth in the future.”
This is good news for Crocs, which is has been struggling for the past several quarters. The brand launched in the early 2000s with sales over $1.2 million in 2003, and raised that to almost $850 million by 2007. In 2013, Crocs reported revenue of $1.2 billion; Ribatt sees a clear future ahead for his shoe company.
“We are confident that the strategic shift to focus the organization on a narrower range of businesses, fewer retail stores and reduced geographic footprint will lead to improved results in the future. We invested an incremental $15 million in marketing in Q2 2015 compared to 2014 to build brand awareness. We increased reserves for doubtful accounts by $5 million on our balance sheet at the end of the second quarter while reducing inventory and global accounts receivables compared to last year at June 30th.”
Crocs anticipates its third-quarter revenue to range between $280 million and $290 million. These predictions are less that the analyst predictions of $293.3 million.
Ribatt is not a stranger to the shoe business. Before the Crocs’ board hired Ribatt, he was an executive vice president and COO of Bennett Footwear. He also helped former shoe brands like Franco Sarto, Etienne Aigner, and Via Spiga get their companies off the ground until they were sold to Brown Shoes for $205 million in 2005, according to Forbes.
The shoe business is Ribatt’s family business. His grandfather sold and made inner soles for handcrafted shoes. Ribatt’s mother and father met while working at a shoe company. He told the business magazine, “I grew up in and around the business.”
He’s also aware that not everyone thinks that Crocs are fashionable enough to wear. He’s hoping to change that. Now that Crocs has partnered up with designer John McCarvel, they released ballet flats, fur-lined boots, and leather shoes.
“When Crocs make product styled right, priced right and delivered on time, it performs really well.”
[Image: Cate Gillon/Getty Images]