Shares of Crocs (CROX 4.64%) slumped on Wednesday after the footwear company reported mixed fourth-quarter results. While revenue exceeded analyst estimates and margins improved, the bottom line came in below expectations, and guidance for 2018 called for flat revenue. Shares of Crocs had previously surged when the company increased its guidance in January. As of 11:20 a.m. EST, the stock was down about 13.5%.
Crocs reported fourth-quarter revenue of $199.1 million, up 6.2% year over year and about $4.1 million above the average analyst estimate. Adjusted for currency, revenue grew by 3.8%. Total wholesale revenue grew by 15.5%, while e-commerce revenue jumped 11.6%. Retail revenue was down 6.3% due to fewer stores, but comparable sales were up 3.7% globally.
Crocs' gross margin rose 340 basis points year over year to 45.5%. A focus on high-margin molded products, improved promotion management, and a tailwind from currency all played a role in the increase. Selling, general, and administrative costs were up slightly, but declined as a percentage of revenue by 260 basis points to 60.6%.
Earnings per share came in at a loss of $0.41, which compares favorably to a loss of $0.60 in the prior-year period but was $0.08 below analyst expectations. The fourth quarter is seasonally weak for Crocs, so a loss isn't out of the ordinary.
Crocs expects to generate between $265 million and $275 million of revenue during the first quarter, up from $267.9 million in the first quarter of 2017. For the full year, revenue is expected to be flat, negatively impacted by business model changes and store closures. Full-year gross margin is expected to improve by 70 to 100 basis points, while selling, general, and administrative costs are expected to decline by $24.9 million to $475 million.
Revenue was down slightly in 2017, and it looks like 2018 won't be much better on that front. Margins are moving in the right direction, but with revenue growth proving elusive, the turnaround is still a work in progress.