The first quarter of fiscal 2015 proved to be a disappointing one for shoe brand Crocs Inc.
Global e-commerce sales for Crocs, No. 240 in the Internet Retailer 2015 Top 500 Guide, fell to $17.3 million, down 11.7% from $19.6 million during the same period in fiscal 2014, with two of the three regions (the Americas and Europe) posting online sales declines.
Online sales in the Americas declined 4.0% year over year during the quarter, falling to $9.98 million from $10.40 million the year prior. The steepest decline online took place in Europe, where sales fell to $3.36 million, down 40.3% from $5.63 million during the same period last year. A bright spot for Crocs was Asia Pacific, with year-over-year e-commerce gains during the quarter of 8.3% to $3.9 million from $3.6 million during the same period last year.
“We saw exceptionally strong growth in e-commerce volume in China as that volume doubled over the prior year,” chief financial officer Jeff Lasher told analysts on Crocs’ Q1 earnings call, according to a transcript of the call obtained from Seeking Alpha. “However, the shift to e-commerce in the market impacted same-store sales in China and low visitor traffic to Hong Kong pressured same-store sales in that market.”
Crocs’ online performance proved to be a bright spot in an otherwise down quarter for the brand, with the $2.3 million decline in e-commerce sales year over year representing only 4.7% of the overall drop in revenue of $50.2 million for the company. Crocs reported total revenue during the quarter of $262.2 million, down 16.1% from $312.4 million during the first quarter of fiscal 2014. During the quarter, Crocs closed 30 retail locations while opening three, bringing its store count to 558, down from 585 at the start of the quarter.
Gregg Ribatt, who took over as CEO in January, told analysts he views the company’s current state as a work in progress, a statement echoed by other Crocs executives who used the word “transformation” a combined nine times on the call.
“We are nine months into an 18-month to 24-month process and our transformation is progressing well, it’s on track, and it will set us up from long-term sustained success,” Ribatt said.
On the call, Ribatt also announced a series of executive leadership changes. Ribatt told analysts that chief operating officer Scott Crutchfield and Chap Kistler, senior vice president of global supply chain, are leaving the company. Replacing them will be Dennis Sheldon, promoted from senior vice president of global enterprise systems to senior vice president of global distribution and logistics, and retail industry veteran Phil Blake, who joins Crocs as senior vice president of global sourcing. Blake had been vice president of sourcing at Clarks Americas. Clarks Americas’ parent company, Clarks, is No. 201 in the Internet Retailer 2014 Europe 500 Guide.
For the first quarter ending March 31, Crocs reports:
- Retail sales in the Americas of $34.6 million, down 5.5% from $36.6 million during the same period last year.
- Total retail revenue of $66.4 million, down 12.2% from $75.6 million during the same period last year.
- Net loss of $2.43 million compared with net income of $9.12 million during the same period last year.