Crocs forecasts lower profits
24/07/2008
Shares in Crocs plunged by almost half on the Nasdaq exchange in New York on July 24 after the company forecast earnings lower than its previous prediction, raising concerns that it may not be able to keep selling its coloured foam clogs profitably.
Crocs may post its first drop in sales since it sold shares to the public in 2006 as retailers cut back on orders. Yesterday's decline contrasts with the sevenfold increase in the 20 months after the initial share sale, when investors bought on the hopes that forays into apparel and celebrity endorsements would sustain the company's revenue growth, Bloomberg said.
Crocs fell $3.99, or 45 percent, to $4.96 after the close of trading, down 93% from the stock's record high of $74.75 on October 31 last year. The company's German-listed shares have also fallen. The footwear brand said retailers were cutting back on clog orders as US consumers were spending less.
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