Crocs swung to a first-quarter profit of $5.7 million, or $0.07 per share. Last year this time, it reported a harrowing net loss of $22.4 million, or $0.27 per share. Revenue surged 23.7% to $166.9 million, but that's an easy comparison to last year's malaise, when first-quarter revenue dropped 32%.
Crocs distributes through many retailers across the board; it discussed its relationship with DSW
The company did reveal international strength; Asia led the way, with sales there jumping 40.3% to $54.7 million. Of the 39 stores the company plans to open in the second quarter, two-thirds will reside in Asia.
On the balance sheet, Crocs' accounts receivable line grew by 60.8%, exceeding revenue growth. This means the company has not yet been paid for some of the sales recorded during the quarter, a caveat worth noting. (In fairness, this is nothing compared to the midst of Crocs' most troubling times, when both its inventories and its accounts receivable burgeoned big time.)
Still, kudos to Crocs for paying down the debt that made such a risky stock during the financial crisis and credit crunch. In the conference call, newly minted CEO John McCarvel gave a shout-out to the company's crocodile-like survival skills, mentioning the "relentless will to survive, to thrive, even when conditions weren't exactly ideal."
Any company that relies on fickle fashion will always face ongoing risk, though. Crocs has survived one travail, but it still faces stiff competition from the likes of Nike
Crocs appears to be off the endangered list, but I still think long-term investors would find firmer footing in far more stable stocks.
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