What: Shares of Crocs (NASDAQ:CROX) fell as much as 17.4% Tuesday morning, then partially recovered to trade down around 10% as of 12:00 p.m. EST after the casual footwear company released disappointing fourth-quarter 2015 results.
So what: Quarterly revenue grew 1% year over year (up 7% on a constant-currency basis) to $208.7 million. Based on generally accepted accounting principles (GAAP), that translated to a net loss of $73.9 million, or $1.01 per share, compared to a net loss of $56.9 million, or $0.70 per share in the same year-ago period. On an adjusted (non-GAAP) basis -- which means excluding items not related to Crocs' core business like reorganization charges and inventory writedowns -- Crocs' net loss came in at $52.9 million, or roughly $0.73 per share.
Analysts, on average, were expecting a narrower adjusted net loss of $0.33 per share on lower revenue of $201.6 million.
Noting Crocs' overall results were held back by their decision to increase promotions during the quarter, Crocs CEO Gregg Ribatt insisted, "We continue to make meaningful progress positioning our business for long-term sustainable success despite some near-term challenges. Revenue on a constant currency basis, excluding store closures and discontinued product lines, grew at 12.2% in the quarter compared with a year ago."
Now what: For the current quarter, Crocs anticipates revenue of $260 million to $270 million, compared to $262.2 million in last year's first quarter. But analysts' consensus estimates predicted first-quarter revenue slightly above the high end of that range at $270.9 million.
In any case, it's hard to blame Crocs for opportunistically biting the bullet by increasing promotions during the busy holiday season, which should leave the company better positioned from an inventory standpoint in the new year. But given its bottom-line miss and light guidance -- and keeping in mind I'm personally content continuing to watch Crocs' progress from the sidelines during its ongoing turnaround -- it's no surprise to see shares trading lower today.