Shares of Crocs, Inc. (NASDAQ:CROX), a designer and developer of casual lifestyle footwear and accessories for men and women, declined 16% on Thursday.
Revenue during the first quarter dropped to $281.2 million, down from the prior year's $295.9 million mark and below analysts' estimates calling for $296 million. The disappointing sales figure trickled down to the bottom line, with adjusted earnings per share checking in at $0.22, below the prior year's $0.33 per share and also below analysts' estimates of $0.31 per share. A small silver lining for investors: E-commerce revenues increased nearly 16% from the prior year's first quarter, suggesting some consumers aren't totally abandoning discretionary purchases.
"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. Despite this recent softness, Crocs remains a strong, vibrant brand that is very well positioned." said Andrew Rees, president and chief executive officer, in a press release.
The most pressing question for companies right now is in regard to liquidity. Crocs management emphasized there are no liquidity concerns and the company should remain "strongly" cash flow positive throughout 2020. Despite having solid liquidity to weather the storm, the company's revenue will take an even larger hit during the second quarter since many retail stores could remain closed throughout the period. Management did, however, offer a glimmer of hope that it saw some recovery in foot traffic in its China and Korea stores.