Shares in Crocs, Inc. fell 16% on Thursday after the Niwot, Colorado-based footwear maker reported declines in first-quarter sales and earnings due to the impact of the ongoing COVID-19 pandemic.
For the first quarter ended March 31, the company’s revenues totaled $281.2 million, down 5.0% from the prior-year period, or 3.3% in constant currencies.
Revenues in Crocs’ wholesale segment declined 5.6%, while total retail revenues fell 15.0% as a result of the temporary store closures implemented in reaction to the coronavirus crisis. These decreases were partially offset by a growth of 15.8% in the company’s e-commerce revenues.
Crocs’ quarterly net income was $11.1 million, or $0.16 per diluted share, falling from $24.7 million, or $0.33 per diluted share, in the same period in the previous year. Adjusted EPS was $0.22, down from $0.36.
Analysts had expected the company to achieve adjusted EPS of $0.31 on revenues of $296 million.
“Amidst unprecedented market conditions globally, our total revenue held up well with exceptional performance in our Americas and e-commerce businesses that was overshadowed by Covid-19 related store closures,” said Crocs president and CEO Andrew Rees in a release.
“Despite this recent softness, Crocs remains a strong, vibrant brand that is very well positioned,” he added. “In the near-term, we have no liquidity concerns and have taken quick action to ensure we will be strongly cash flow positive for the remainder of the year.”
Over the last few weeks, the footwear maker has implemented a number of measures to protect its business during the Covid-19 pandemic, including furloughing store employees, reducing executive pay, and cutting operating expenses and capital expenditures, as well as suspending its share repurchase program.
The company has also increased its revolving credit facility from $450 million to $500 million.
Crocs’ global distribution centers remain operational to provide healthcare workers with essential products, but have implemented a range of measures to protect employees, including temperature checks, strict social distancing and the provision of hand sanitizer.
In light of the continued uncertainty relating to Covid-19, Crocs has not provided outlook for either the second quarter or the full fiscal year 2020.
Nonetheless, despite signs of recovery in China and Korea, where Crocs stores are now reopening, the company did highlight that it expects to see larger sales declines in the second quarter, as the majority of its owned and partner stores could be closed for the whole period.