The purveyor of colorful clogs reported a net loss of $30.3 million, or $0.36 per share, versus a profit of $2.1 million, or $0.03 per share this time last year. The quarterly results included a litany of charges; without them, Crocs reported a net loss of $5 million, or $0.06 per share.
Revenue fell 11.3% to $197.7 million. However, Crocs was able to reduce its inventories, in part by donating some shoes to charity. That's a kind gesture, but it begs for a "giving these things away" joke. The company also improved its balance sheet by paying off the $17.3 million it owed on its credit facility, which had been due on Sept. 30. These are glimmers of good news, but this torpid reptile's not out of the jaws of disaster just yet.
The company further disclosed that it may still require additional financing to fund its operations as the economic downturn wears on. Personally, I wouldn't want to bet on its ability to secure financing or repay debts over the long term, if its business continues to suffer.
Blaming Crocs' ills on the economy seems naive, especially since the trend that initially lifted the company has clearly faded. Even with no help from the economy, this stock has the same hovering air of gloom as fellow footwear fad Heelys
I guess people will always fall in love with the compelling stories of stocks like Crocs or Sirius XM
For those who scooped up Crocs shares when they were scraping the bottom of the barrel, well, I suggest you pat yourself on the back for being darn lucky, take your gains, and invest in something with better odds of paying off. At this point, even a lottery scratch-off ticket might fare better than Crocs' stock.
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Alyce Lomax does not own shares of any of the companies mentioned, nor is she shorting any of them. Nope, not even Crocs. Try any of our Foolish newsletters free for 30 days. The Fool's disclosure policy manages to remain comfortable without being full of holes.